- #ISPECTRUM MAGAZINE CITING HOW TO#
- #ISPECTRUM MAGAZINE CITING UPGRADE#
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In contrast, fixed telecommunications have often been characterised by the presence of a dominant, formerly state-owned incumbent, a limited degree of network overbuild and a relatively more mature technology. On the other hand, governments have regulated the sector with the goal of favouring the development of modern mobile networks with state-of-the-art technology, relying on competitive auctions to allocate radio spectrum and imposing stringent conditions on concessions and licences in terms of duration, technology and roll-out requirements.
#ISPECTRUM MAGAZINE CITING UPGRADE#
The initial development of 2G networks and the later upgrade to 3G and 4G technologies has attracted numerous foreign investors, requiring risky up-front investments in tangible and intangible assets. The marked concentration of disputes in the mobile sector is not surprising. Most of the disputes involved mobile telecoms networks (46 out of 64), while the others concerned fixed broadband and cable (15) and satellite terrestrial networks (3).
#ISPECTRUM MAGAZINE CITING FULL#
In most telecoms-related disputes, investors claim that the host state has deliberately taken unreasonable measures to deprive them of the investment’s value, resulting in direct or indirect expropriation without full and proper compensation, or in a breach of the host state’s obligation to fair and equitable treatment. Overall, we have identified at least 64 telecoms-related disputes between private investors and host states arising under bilateral investment treaties over the period 1996–2021, 13 of which were initiated only in the past two years.
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We then discuss specific issues that emerge when valuing telecommunications assets in the context of treaty arbitrations, including how to account for regulatory, country and business risk and how to value spectrum under an alternative market approach. We then analyse instances in which damages were awarded and discuss the relevance and use of the discounted cash flows (DCF) method in these cases. In this chapter, we first review the investment treaty arbitrations initiated by telecoms operators since the 1990s, which we have identified through the ICSID database and the United Nations Conference on Trade and Development (UNCTAD) Investment Dispute Settlement Navigator. It is therefore not surprising that the number of investment treaty arbitrations in the telecoms sector has continued to rise in recent years, leading several practitioners to view spectrum – the scarce resource necessary to provide wireless telecoms services – as ‘the new oil’ and to foresee a further increase in disputes for the next several years. Furthermore, wireless spectrum and many telecoms networks have witnessed large and unexpected revenue growth, which has increased the incentives for states to seek to extract more value from these assets. Investors often must obtain several layers of authorisations and licences to operate a network, and regulators have sometimes imposed additional restrictions on ownership and control by foreign investors. At the same time, the development of telecoms networks is a matter of strategic national interest, similar to energy, prompting heavy regulation of these markets. Telecoms investments have attracted significant amounts of foreign capital over the past decades. Telecoms networks routinely require large investments for development and upgrades, with investors expecting to earn future profits through many years of operation. There are several industry characteristics that expose the telecoms sector to investor-state disputes.