CONNECT | from the New Zealand Herald
by Peter Griffin
Mobile phone operators are set to claim a larger share of the broadband market in the next couple of years, but one factor may hold these services back – a lack of radio spectrum to deliver them over the air.
Swedish telecoms equipment maker Ericsson estimates the current European mobile operators will have run out of radio spectrum by 2010. That makes the looming auctions of 2.5GHZ (gigahertz) spectrum across Europe highly contentious to mobile operators who just six years ago shelled out billions for licences in the first wave of “3G” spectrum auctions.
The mobile industry sees the radio spectrum as crucial to maintaining the flat-rate charging model that has emerged in Europe for mobile data services.
“In Europe we have 3.6 [megabits per second] service, no data cap, and I mean no cap, for 20 euros a month,” said Mikael Halen, Ericsson’s director for government and industry.
Halen met with Government officials this week, urging them to ensure December’s state auction for 2.5Ghz (gigahertz) radio spectrum be structured to make it attractive for mobile operators to obtain spectrum.
“It’s an extremely important band for providing mobile services and it’s critical for the introduction of Long Term Evolution (LTE) technology which will come to market in 2009,” he said.
By 2009, Ericsson claims that LTE, an evolution of the system currently used by Vodafone and other many other operators, will offer download speeds of up to 100Mbps. That is sufficient for most voice and data services, bar high-definition TV which is better delivered via satellite, ground broadcast or fixed-line connections.
Communications minister David Cunliffe last week revealed a December auction would see two blocks of spectrum put up for sale, in the 2.3Ghz and 2.5GHz bands.
“The new auction can allow for up to six nationwide users and a generous managed park of at least 30 MHz and potentially up to or exceeding 50 MHz. This will ensure plenty of space for smaller and regional providers, including those with a focus on delivering services to Maori,” Cunliffe said.
Both bands are suitable for the provision of wireless broadband services based on the WiMax service and operators CallPlus and Woosh have expressed interest in obtaining spectrum to develop national networks.
But Halen believes CallPlus and Woosh are unlikely to ever offer mass-market services based on WiMax.
“They have an uphill struggle. They’re smaller and they have spectrum in the higher bands which makes it more difficult to penetrate buildings and build coverage.”
But the biggest problem they face, says Halen is also inherent in the CDMA technology
Telecom is now about to replace – a lack of global scale.
That means higher technology development costs, less choice in handsets and an inability to match the mobile operators on pricing plans.
“Generally mobile operators aren’t at all interested in WiMax,” said Halen.
“Their enthusiasm has diminished considerably in the last half year.”
While Halen believes WiMaz services can be delivered using the 2.3GHz spectrum, bidding for the 2.5Ghz block between established mobile operators and fledgling WiMax start-ups is likely to be fierce.
Ironically Ericsson, which built Telecom’s now-decommissioned 025 mobile network, may be left out of local mobile developments for some time to come.
As the Herald reported last week, Telecom is understood to be finalizing a $300 – $400 million deal with its existing outsourcing partner Alcatel Lucent to build a new network based on the same GSM/UMTS standards commonly used around the world.
Ericsson had begun building TelstraClear’s Tauranga-based “Unplugged” network before the project was last month canceled and the network dismantled.
Aspiring new entrant, New Zealand Communications is using Chinese vendor Huawei to build its mobile network and Nokia is well entrenched in the Vodafone camp.
But Halen’s message seems relatively non-partisan and advocates mobile operators in general having the first bite at 2.5GHz spectrum.
“Our suggestion is that when you do the [radio frequency] band allocation, make sure they have access to technologies that are available with huge scale advantage,” said Halen.
The Government will release a discussion paper by August which will outline the technicalities of how it expects to carve up spectrum in the auction. Ultimately, said Halen, broadband was being viewed as essential infrastructure in most countries, hence the growing interest in partial or full government funding of broadband networks.
“It’s like electricity or water. It’s essential everyone in the country gets access to it,” he said.
“That’s the way it will go around the world, including New Zealand.”
RUNNING OUT OF SPECTRUM
– Mobile operators are running out of radio spectrum making the 2.5GHz (gigahertz) spectrum auctions happening around the world crucial to expanding their services.
– The Government will auction two lots of spectrum in December, which will likely see mobile operators and new WiMax players competing for licences.
– Mobile broadband is increasingly seen as an alternative to fixed line services as its reliable data speeds incr