ITU Approves Globally-Harmonized New Spectrum for Mobile Communications

The International Telecommunications Union World Radiocommunications Conference has approved a globally harmonized 200 MHz portion of the C-band (3.4 GHz to 3.6GHz) for mobile communications.

That band is expected to provide capacity in urban areas.

The WRC-15 meeting also created a globally harmonized portion of the L-band (1427 MHz to 1518 MHz), for mobile communications, as well.

WRC-15 also expanded the 700 MHz band (694 MHz to 790 MHz) from a regionally harmonized band in the Americas and Asia Pacific to a global band to support mobile communications.

GSMA officials also applauded the use of sub-700 MHz frequencies, especially 610 MHz to 698 MHz for mobile broadband, in markets covering more than half the population of the Americas.

India is expected to use that band as well.

GSMA expects additional work at WRC-19 to  identify high-frequency bands above 24 GHz for 5G mobile services.

LTE-Advanced Will Represent 60% of All LTE Subscriptions by 2020

LTE-Advanced has been commercially deployed on 100 networks worldwide in 49 countries, according to 4G Americas.

LTE-Advanced uses carrier aggregation to increase bandwidth efficiency and boost download speeds.

Signals and Systems Telecom estimates that overall LTE service revenues will account for nearly $170 billion in 2015, growing at a 30-percent compound annual growth rate for five years.

By 2020 nearly 60 percent of all LTE subscriptions will be on LTE-Advanced networks.

More Users, More Smartphones, Bandwidth Intensive Apps Mean More Need for Spectrum in India

India is on track to surpass half a billion mobile subscribers by the end of the year, according to a new GSMA Intelligence study. By 2020, India will account for almost half of all the subscriber growth expected in the Asia Pacific region.

The Mobile Economy: India 2015 notes that 13 percent of the world’s mobile subscribers reside in India. At the  end of 2014, India’s mobile subscriber penetration rate was about 36 percent of the population, compared to a 50 percent global average.

But that is going to change, fast.

The subscriber penetration rate in India is forecast to reach 54 per cent by 2020 as many millions more are connected by mobile.

India had 453 million unique mobile subscribers at the end of 2014, but is forecast to surpass 500 million by the end of 2015 and add a further 250 million subscribers by 2020 to reach 734 million.  

And though network architectures, modulation techniques and radio efficiencies will help, India’s mobile operators will need access to more spectrum to handle the new load, the GSMA argues.

India’s mobile operators still have access to only a fraction of the spectrum that has been identified globally for mobile services, GSMA argues.  

GSMA’s research suggests that, on average, a total of 1600 MHz to 1800 MHz should be identified for mobile services.

“Unlicensed spectrum is not an adequate substitute, as it creates an uneven playing field and can quickly become congested, leading to interference between services,” GSMA argues. That is a predictable mobile industry argument.

The thesis is not without foundation, but also is congruent with the industry’s business model. Others might argue we have not yet explored the degree to which license-exempt spectrum can provide “carrier grade” service, and to what extent.

Still, by 2020, more than half a billion mobile connections in India will be running on mobile broadband networks. The bigger issue, beyond the number of users, is the intensity of capacity demand on networks supporting smartphones.

Video will be key,  according to Cisco. Globally, mobile data traffic will increase 10-fold between 2014 and 2019, for example.  

source: Cisco

Mobile data traffic will grow at a 57 percent compound annual growth rate between 2014 and 2019, Cisco predicts.

Devices also matter. A single smartphone can generate as much traffic as 37 basic-feature phones; a tablet as much traffic as 94 basic-feature phones; and a single laptop can generate as much traffic as 119 basic-feature phones.

source: Cisco

For such reasons--more subscribers, using more bandwidth intensive apps, on faster networks--mobile operators will need additional spectrum, especially in the 2100 MHz band, GSMA argues.

In India, freeing up 700 MHz band for mobile services also is necessary.  This low-frequency spectrum, structured in line with the Asia-Pacific Telecommunity (APT) band plan, can enable cost-effective coverage of large geographic areas, so will play an important role in extending mobile broadband coverage.

Contrary to most markets, in India this band is not occupied by broadcasting and can therefore be made available for mobile usage relatively quickly.

A key constraint for operators is that reserve prices in India have historically been set on the high side, GSMA argues. Lower spectrum prices will mean lower retail prices for Internet access users.

In India, consumer taxes also are 23.3 percent of the total cost of mobile ownership, while mobile-specific taxes account for 10.3 percent of the total cost of mobile ownership. Lower taxes also would improve affordability, GSMA argues.

Reliance Communications Tower Network Sale Raises Question: Where is Value?

Reliance Communications, the fourth-largest Indian mobile services provider, plans to sell its tower network, a move that sheds light on the relative value of mobile access assets. For mobile operators, the scarce asset is the ownership of spectrum rights, not the towers and radios.

That is different from the way fixed network access assets are viewed. There, it is the scarcity of the physical connections that tend to confer value.

It might be subtle, but the difference is that the physical access assets are key to fixed network value. For mobile operators, it is the control of spectrum.

The implications are that an owner of fixed network access facilities might well consider outsourcing many other parts of its operation, but should not generally consider giving up control of its physical access network. In effect, that is why network owner tend to be unhappy with mandatory wholesale agreements, especially those that mandate low wholesale prices.

Mandatory wholesale access reduces scarcity value.

For mobile operators, what is scarce is the right to use spectrum, not the physical means use to commercialize the asset.

To be sure, ownership of tower networks might well have some positive value. But many managers would conclude that the value is less than the value of freeing up capital to acquire more spectrum, for example, or expand scale by buying other mobile service provider firms.

Reliance is not alone in its thinking. Bharti Airtel, India's largest telecom company by market capitalization and revenues, earlier had entered into an infrastructure sharing deal with the telecom arm of Reliance Industries.

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The deal gave Reliance Jio pan-India access to Bharti's nationwide tower and radio infrastructure while giving Bharti access to the optical fiber backhaul capacity created by Jio in the future.

In April of 2013, the two fierce competitors had signed an agreement under which Bharti provided capacity on its i2i submarine cable to Reliance Jio.

The companies said the deal preserves capital and avoids duplication of investment. Bharti will gain lease revenue while Reliance Jio gets to market faster.

Also, Reliance is building a fiber backhaul network at a time when Bharti has only about 10 percent of its tower locations connected by optical fiber.

It has been clear for some time that ownership of mobile cell sites is not necessarily “strategic” for a mobile service provider. Carriers often lease space on towers owned by third parties, sharing those sites with rivals.

In India and some markets in Africa, mobile service providers have agreed to share the cost of tower facilities. Some service providers outsource actual operations of their radio networks as well.

For a very long time, one vital "core competence " for a fixed network telco might have been said to be its right to operate a monopoly access network. By definition, a legal barrier of entry to all other competitors is a rather notable advantage.

But the value of that advantage is challenged under competitive conditions. When there are at least two ubiquitous fixed networks, or two or more broadband networks, plus mobile, fixed wireless and satellite access providers, one might argue the uniqueness of any access network is lessened, and presumably therefore the value of owning any single set of network facilities.

Few competitors would argue that network ownership is an insignificant source of advantage. But contestants might disagree about the extent of value, in a competitive market. And that also speaks to new questions about "core competence," which also relates to strategic business value.

What is a telco's core competence? It is a tougher question that sometimes seems to be the case. A core competence is not just "something we are good at," but a unique attribute that provides significant business advantage.

Some would say the three key attributes include:

1. It is not easy for competitors to imitate.
2. It can be reused widely for many products and markets.
3. It must contribute to the end consumer's experienced benefits and the value of the product/service to its customers.

Spectrum fits the definition. Towers and radios arguably do not.

Mexico AWS (1.7 GHz to 2.1 GHz) 4G LTE Spectrum Auction Commences in January 2016

Mexico’s Federal Telecommunications Institute announced plans for an auction of

1.7 GHz to 2.1 GHz spectrum in the Advanced Wireless Services band. A total of 80 MHz of spectrum will be auctioned, for the purpose of supporting Long Term Evolution 4G networks.

The spectrum will be sold in eight national blocks of 10 MHz each (paired spectrum, 5 MHz down, 5 MHz up). For the upcoming AWS spectrum auction, the IFT plans to sell 5 MHz blocks of paired spectrum. Individual carriers will be allowed to bid for multiple blocks subject to a maximum amount of airwaves it can acquire.

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This portion of the spectrum will be divided into eight national blocks, three in the AWS-1 band (1.710-1.755, 2.110-2.155), three in AWS-3 bands 1755-1770 and 2155-2170 and two in the AWS-3 bands at 1770-1780 and 2170/2180 ranges.

There will be limits on the total amount of spectrum any single bidder can acquire, limiting total spectrum in any local market. That measure seems aimed at AT&T, which already has the most AWS spectrum, by virtue of its ownership of Grupo Iusacell and Nextel de Mexico.

Use of Mobile Internet Access will Grow 10X in Bangladesh, 8X in Pakistan, 5X in India by 2020

Use of mobile Internet access services presently ranges from five percent in Bangladesh and Pakistan to 125 percent in Thailand. By 2020, adoption will be in excess of 100 percent in Thailand, Malaysia and Indonesia, GSMA now estimates.

By 2020, use of mobile Internet access will have reached 50 percent in Bangladesh 39 percent in Pakistan and India.

The point is that no matter how great current challenges might appear, mobile Internet access is becoming widespread across South Asia, even in regions where adoption presently is low.

Though spectrum access, mobile operator investments, awareness of the value of the Internet and cost of handsets and service remain issues, they do not appear to be insurmountable obstacles.

If GSMA is correct, we do not have to worry about "killer apps" or the price of smartphones. Mobile operators will need more spectrum to meet the new demand, and some improvements in price-value relationships will have to continue.

But nowhere, it seems, have any obstacles been able to stop widespread use of mobile Internet apps and services.

By 2020, Mobile Internet Access Exceeds 100% in East Asia, South America, Central and Eastern Europe

By 2020, mobile Internet access will reach 100 percent in East Asia, 106 percent in South America and 131 percent in Central and Eastern Europe.

By 2020, mobile Internet access will have climbed from the 2014 level of 24 percent in the Middle East and North Africa to 71 percent. In Sub-Saharan Africa mobile Internet access will grow from 13 percent to 53 percent.

In South Asia, mobile Internet access will rise from seven percent to 41 percent, growth of nearly 600 percent.

source: GSMA

The growth of mobile Internet access will be propelled, in substantial part, by huge increases in use of smartphones.

source: GSMA

Leading U.S. Mobile Service Providers Earn Almost Nothing From "New Accounts"

The leading four national mobile service providers in the U.S. market now earn nearly all their revenue from existing customers, as much attention is paid to "new accounts" essentially taken from the other providers. 

Federated Wireless Introduces System for Networks Using 3.5 GHz Shared Spectrum

Federated Wireless has introduced its  “CINQ XP” network for planning, configuring and managing networks on shared spectrum, such as the coming 3.5 GHz “Citizen’s Broadband Radio Service” that will allow U.S commercial users to share spectrum licensed to U.S. government agencies.

Federated Wireless has been working on developing the ecosystem and standards for the 3.5 GHz band since the Federal Communications Commission introduced rules for CBRS in April 2015.

Key Benefits of CINQ XP  are said to include:

• Access to a new model of shared spectrum that combines the quality and predictability of licensed spectrum with the low cost and versatility of unlicensed spectrum
• An extension of networks indoors utilizing cloud economics, reducing the high cost of Wi-Fi infrastructure
• The ability to plan and optimize networks in real time in the cloud, reducing the cost and time needed for field engineering
• New market opportunities that will help to facilitate the smart home and mobile enterprise
• On-demand analytics to allow for the dynamic management of networks
• Compatibility that allows for integration with existing tools and services
• Identification of secondary markets

The solution allows customers to

• Access a full list of FCC-certified devices
• License users through Priority or General Access
• Plan an extension of their existing network with spectrum sharing
• Provide and manage access points without field engineering

“Federated Wireless has long been developing technology and intellectual property in conjunction with the Federal Government and other stakeholders of the wireless ecosystem to enable our proprietary technology for the 3.5 GHz band,” said Federated Wireless Chief Executive Officer Iyad Tarazi.

Spectrum Costs and Fees are a Barrier to Faster, More Widespread Internet Access in India

All costs in the telecom value chain ultimately are paid by users. So if the objective is getting all citizens and people connected to the Internet, it makes sense to reduce the prices of all other inputs in the value chain.

That rarely is a popular option, since “costs” for others in the value chain are “revenues” for each participant. Sometimes it is helpful to keep that in mind, as difficult as it might be to make the point.

To make the matter as clear as possible, the best possible outcome for users of the Internet is for spectrum costs to remain low (observers will argue about whether “free” or “low cost” is better, in terms of sustainability), infrastructure costs to remain low, taxes and fees, marketing and operating costs as efficient as possible.

The problem always is that an argument for “lower costs” across the value chain directly implies less revenue for governments, less revenue for infrastructure suppliers, ISPs and employees of most firms in most segments.

The only segments where end users do not pay is the application provider segment, where advertisers and sponsors essentially defray costs on behalf of Internet users.

In India, “total outflow to the government in the form of all fees (spectrum, license, upfront, deferred) is an astounding between 25 percent to 35 percent every year,” says Parag Kar, Qualcomm VP, government affairs, India and South Asia. “This will impact operator’s ability to invest in networks and electronics.”

That provides an example of the dilemma. Assuming everybody wants “Internet access for everyone,” when ability to pay is an issue, the best way to do so is to control all other costs in the ecosystem. All that is revenue for somebody in the ecosystem.

And that will remain an issue to be grappled with.

source: Parag Kar

Zero Rating is Just a Promotion to Encourage Sampling of a Product

Most Internet and technology advocates prize innovation, especially innovation that makes Internet apps and services more affordable, more consumable or more useful. So it is curious that some forms of innovation that do these things get attacked. So powerful is "ideology" that consumer welfare might suffer. 

Consider Internet Basics or zero rating, both efforts to make Internet apps available to people who have never used the Internet, or to encourage use of Internet apps without additional charge. 

You might argue both efforts are praiseworthy and obviously good for consumers. But some oppose such efforts, "even if good for consumers," because they supposedly are violations of network neutrality. 

That remains a matter of fierce debate. Some of us do not believe zero rating is an issue, or a violation of network neutrality principles (best effort only access, access to all lawful apps) at all. 

Of course, we do not all agree on what "network neutrality" means, much less how it should be applied. Some frame the concept in terms of "all bits have to be treated alike." Those familiar with how voice, video or other isochronous forms of media behave would argue that if you want consistent quality, isochronous media have to have some form of predictable delivery. 

Those of you who use various forms of voice over IP or video over IP know what happens when any part of the connection gets congested. There are times, in other words, when some form of predictive packet delivery actually can improve quality of experience. 

But those are "technical" issues. Encouraging people to try the Internet is a "business" issue. And there suppliers must be free to innovate with pricing and packaging. 

In principle, the insistence that promotions are not allowed, or that usage without additional charge is forbidden, goes too far. Those marketing and promotional tactics do not violate anybody's "rights."

Internet Basics is one effort to encourage non-users to sample the Internet. Zero rating does the same. Both will help us connect the unconnected. There always are trade-offs in life. You simply need to make your choices. 

If "connecting the unconnected" is the objective, allowing consumers access without charge is a good thing. 

Spectrum License Terms Affect Investment Behavior

Spectrum license terms affect service provider willingness to invest in networks, it is worth noting. Consider supplier behavior for fixed-term licenses.

In November 2000, Ofcom auctioned 28-GHz spectrum for fixed wireless applications, with 15-year terms.

During the first few years, at least some operators invested heavily. As you might guess, investment tends to weaken as license expiration nears. Rational actors will limit such investment as they are not assured the licenses will be renewed, leading to uncertainty about the return on investment.

In a more recent Ofcom spectrum auction in February 2008, 10 GHz, more 28 GHz, 32 GHz and 40 GHz spectrum access licenses were auctioned on an “indefinite term”.

Following this auction, the majority of 28-GHz licenses auctioned in November 2000 also were revised to “indefinite term.”

That allows service providers to make additional investments with some certainty about continued access to their spectrum.

Why 4G Might Not be Coming In Myanmar, for Some Time

The government of Myanmar says it will release spectrum for 4G networks “as soon as operators are ready to launch,” according to U Thaung Tin, Communication Ministry deputy minister. 

That apparently unremarkable pledge has a context.

End user demand, device costs and business strategies might all be contributing to less than robust immediate pressure to build 4G networks at a time when a few brand-new 3G networks have just been built, nationwide.

Reluctance to build yet another “next generation” network before investments in the present network can be amortized is not an unusual sentiment, especially if the present network has itself only been recently built, as is the case in Myanmar.

So the business implications are clear enough. Mobile operators who have just build brand-new 3G networks will not be in a hurry to invest again in a 4G network that likely would simply cannibalize customers on the 3G networks.

Mobile Spectrum in South America: 3.5 GHz Makes the Difference

This look at mobile spectrum in South America provides a bit of insight on spectrum allocation by country. Some, such as Mexico, have as little as 226 MHz of total spectrum; others, such as Brazil, have 502 MHz. 

Incrementally, 2.5 GHz has added significantly to mobile capacity in all three of the countries with the most spectrum. 

France 700-MHz Spectrum Auction Impact Not Yet Clear

At least in the short term, the recently-concluded French auction of 700-MHz frequencies for mobile communications “is unlikely to have an immediate impact on the competitive dynamics in the market,” according to Fitch Ratings.

On one hand, Illiad, the attacker in the French market, gained as much new spectrum as did Orange, the market leader. If some had hoped Illiad would not gain any new spectrum, Illiad wins.

On the other hand, Illiad still has less lower-frequency spectrum than Orange and the other carriers.

Over the medium-to long-term, operators with higher amounts of spectrum below 1GHz could gain a network cost and flexibility advantage as capacity requirements for LTE data grow, according to Fitch.

That includes Orange, with 31 percent of total sub-1 GHz spectrum, followed by Bouygues Telecom and Numericable-SFR,  each with 28 percent of the below-1 GHz spectrum.

Iliad (Free Mobile) gas 13 percent of the below-1 GHz spectrum.

In the near-term Fitch expects existing competitive trends to persist as challenger Iliad SA continues to gain scale in mobile and strengthen its quad-play proposition.

Orange's stronger spectrum holding will provide the company with greater flexibility in deploying its network and meeting capacity demand for growth, according to Fitch.

Orange and Iliad secured two blocks of 5 MHz duplex each, while Bouygues Telecom and Numericable-SFR secured one block each.

The total cost of the spectrum of EUR2.8 billion is slightly above the reserve price of EUR2.5 billion.

The auction was of particular importance to Iliad due to its lack of holding in the 800MHz band and 2x5MHz holding in the 900MHz band. As Illiad gained as much spectrum as did Orange, the auction arguably helps Illiad more than the other contestants.

Still, argues Fitch Ratings, Orange's substantial network investments secure the incumbent's operational prospects in the medium term, with a clear network advantage versus its competitors.

At the end of 2014, Orange's and Bouygues' networks covered just above 70 percent of the French population, ahead of Numericable-SFR's and Iliad's that only reached 53 percent and 33 percent respectively.

The auction raised a total of €2.796 billion, or an average of €466 million per block, ahead of the minimum price of €416 million per block set by the regulator Arcep.

The amount was similar to the French and European norm for 800 MHz 4G spectrum, auctioned in France in 2011.

The French government will be receiving fees 12 percent above the reserve, though this is far less of a windfall than Germany experienced when it held Europe's first auction in the 700 MHz band, back in August, 2015.

That sale (which also included 900 MHz and 1.8 GHz blocks) raised a total of €5.08 billion, 3.4 times the reserve of €1.5 billion. The three German winners gained equal amounts of 700 MHz spectrum.

Should Telcos Thank Over the Top App Providers?

As much as Internet service providers might lament the hollowing out of their business models often caused by widespread availability of product substitutes, consumer desire to use those apps creates opportunities for ISPs.

IoT MIght Only Drive About 4% Incremental Traffic

Internet of Things, the next big potential wave of mobile service provider revenue sources, will involve billions of devices, but probably only about four percent of bandwidth, according to Robert Pepper of Cisco.

Sprint Launches "LTE Plus" Network Supporitng 100 Mbps Speeds

Sprint has launched its “LTE Plus” network, available today in 77 major markets, using carrier aggregation across multiple bands to provide peak 4G speeds in excess of 100Mbps on capable devices, according to Dr. John Saw, Sprint CTO.

The new service bonds three spectrum bands, 1.9 GHz, 800 MHz and 2.5 GHz.

Sprint also is using beamforming antennas to improve performance at 2.5 GHz.

 

The LTE Plus device portfolio today includes 13 devices, including the iPhone 6s, HTC One A9, and the Samsung Galaxy S6.   

77 Markets with Carrier Aggregation and Beamforming

Sprint’s LTE Plus network delivers large files (5MB+) faster than any other carrier in 20 out of 44 markets, Sprint says.

 

OpenSignal also reports that in the third quarter of 2015 Sprint had the lowest LTE latency, beating out AT&T, Verizon and T-Mobile. This is the second consecutive quarter for Sprint to hold this lowest latency ranking.

In PC Magazine’s recent review of Sprint’s iPhone 6s Sprint received the Editor’s Choice Award in large part due to our “killer speeds.”

In a promotion aimed at grabbing price leadership from T-Mobile US, Sprint also has launched a promotion simply offering service at half of Verizon, AT&T and T-Mobile US rate plans.