Utilization of digital dividenddecisions and experiences

Wladimir BocquetSenior Director

Global Spectrum Policy GSM Association

ITU Regional Initiative for Europe on Digital BroadcastingITU Regional Initiative for Europe on Digital Broadcasting5-7 November 2012, Budapest, Hungary5-7 November 2012, Budapest, Hungary

About GSMA

Representing the interests of the worldwide mobile communications industry. Nearly 800 operator members covering over 200 countries.

More than 200 associate members from the broader mobile ecosystem, including handset makers, software companies, equipment providers, Internet companies, and media and entertainment organization

www.gsma.com

What’s at stake for mobile industry?

Data Explosion: Rapid changes in mobile service provision such as usage trends and number of important social and behavioural changes have led to previously unpredicted patterns of data consumption amongst mobile users. Mobile data traffic is still expected to significantly increase in the coming five years

Spectrum Resource: Spectrum is the lifeblood of the mobile industry. The amount of spectrum made available and the regulatory conditions on which it is made available fundamentally drive the cost, range and availability of mobile services. Spectrum is a scarce resource and public State property

– Vital input to many industries– Radio waves do not stop at national borders– cross border issues have a significant role in spectrum management

Spectrum Policy: Choosing the appropriate spectrum policy licensing framework to facilitate the large investments required in rolling out networks and introducing updated technologies and new services

Agenda

Data Traffic for Mobile Broadband

Importance of the Digital Dividend for Mobile Broadband

Global Benefit of Releasing Harmonised Spectrum for Mobile Broadband

Summary

Agenda

Data Traffic for Mobile Broadband

Importance of the Digital Dividend for Mobile Broadband

Global Benefit of Releasing Harmonised Spectrum for Mobile Broadband

Summary

Mobile global data traffic

The growing adoption of data services has become the major source of traffic since 2010

On the Analysis Masson forecasts , mobile traffic is expected to grow at a CAGR (Compound annual growth rate) of 42% to reach 28 000 PB per year in 2015.

Source: ITU-R M.2243 Report

Estimates data traffic based on multiple sources

Mobile global data traffic

The ITU-R M. 2243 Report concludes

“The current data traffic (in year 2010) is more than 5 times greater than some of the estimates for Report ITU-R M. 2072 (WRC-07). “

“Actual traffic being experienced by some operators today (year 2011) is even greater than some of the 2020 forecasts given in Report ITU-R M.2072.[…].”

Source: ITU-R M. 2243 Report

Comparison of ITU-R M.2072 with Current Data

This Report clearly indicates that the ITU-R should consider this increasing mobile broadband traffic demand.”

Factors impacting traffic forecastDiversity of devices

Tablet generates 500 times as much data traffic as a basic mobile phone

Smartphones generate, on average, around 50 times more data per month than a basic phone

Average modem/dongle use, with laptop users generating as much as 1300 times that of a “standard” 3G phone

0

5,000

10,000

15,000

20,000

25,000

30,000

2008 2009 2010 2011 2012 2013 2014 2015Tr

affic

(Pet

abyt

es p

er y

ear)

Smartphone Voicephone

Tablet, eReader, Gaming console Laptop

M2M ITU-R M.2072 forecast

Mobile traffic (PB per year) by device type

Source: ITU, Analysys Mason

Mobile data usage is heavily device-dependent

Factors impacting traffic forecastNumber of devices

2020

12 Billion Mobile Connected Devices

2011

6 Billion Mobile Connected Devices

Source: Machina

Mobile world has reached another milestone with Internet becoming increasingly mobile. Ericsson, based on industry information, estimates that the number of mobile subscription will reach 9 billion end of 2017

Spectrum is a key resource/element for Mobile Broadband development

Agenda

Data Traffic for Mobile Broadband

Importance of the Digital Dividend for Mobile Broadband

Global Benefit of Releasing Harmonised Spectrum for Mobile Broadband

Summary

Spectral efficiency

Global trend towards IMT systems

IMT / IMT-Advanced family

Provides a global ecosystem with inherent mobility

Dramatically improves speed and latency

Frequency bands available for the development of the Mobile Broadband

Region 1 options

Below 1 GHz

800MHz

900MHz

Above 1GHz

1800MHz

2100 MHz

2600 MHz

Coverage requires low frequency spectrum for rural and in-building

Capacity requires more total spectrum

Acquire Digital Dividend

Extend licences & refarm to UMTS

Country objectives

Extend licences & refarm to UMTS / LTEAcquire new spectrum

Business drivers

Acquire new spectrum

Effect of frequency on range and capex

Coverage of rural areas at about 30% of the of 2100 MHz

Impact of the digital dividend Band

 

 

 

 

800MHz indoor coverage

800MHz outdoor coverage

2.6GHz indoor coverage2.6GHz outdoor coverage

Map legend

  Base station

Maximise the harmonisation in ITU-R Region 1Digital Dividend: 790 – 862 MHz

Harmonised technical conditions of use in the 790-862 MHz frequency band for mobile broadband

– ITU-R Recommendation M.1036

Maximise the harmonisation in ITU-R Region 1– Facilitate innovation and roaming– Enable economy of scale– Help managing cross-border interference

791 832 862

FDD downlink FDD uplinkGuard

band

790

Duplex

gap

821

30 MHz (6 blocks of 5 MHz) 30 MHz (6 blocks of 5 MHz)

Agenda

Data Traffic for Mobile Broadband

Importance of the Digital Dividend for Mobile Broadband

Global Benefit of Releasing Harmonised Spectrum for Mobile Broadband

Summary

The greater efficiency of digital broadcast networks means that it is possible to release some spectrum for other uses, notably mobile broadband

Across the world, two harmonised UHF bands have been identified for mobile broadband:

– 800MHz band (790–862MHz) in ITU region 1

The economic and social benefits of clearing this digital dividend spectrum for mobile use have clearly been demonstrated in numerous studies

The benefits of using the Digital Dividend for mobile broadband

An increasing number of countries are looking to transition from analogue TV to digital in order to reap the benefits of the digital dividend

European Commission study

Analysys Mason concluded that using the 800MHz band for wireless broadband could generate between EUR50 billion and

EUR190 billion of private value in addition to social value, across the EU

Policy impact of usage of the Digital Dividend

Scenario definition(spectrum allocated to broadcasting or mobile broadband?)

Contribution to ICT ecosystem (economic contribution)

Direct economic contribution

Indirect economic contribution

Social impact

Which option contributes more to ICT suppliers

Which option contributes more to GDP and creation of industry jobs?

Which option contributes more to other sector of the economy in term of GDP growth and jobs?

Which option provides more benefits (“welfare”) to society?

Value creation can be estimated in terms of its economic and social impacts and benefits

Direct contribution to the economy

Indirect contribution to the economy

Contribution to the GDP growth

Direct job creation

Contribution to the GDP growth

Indirect job creation

Additional taxes

Consumer surplus

Supply Side

effects

Demand Side

effects

Socio-economic benefitAllocating harmonised mobile broadband

BCG:$1trillion GDP impact from DD in Asia Pacific

Plum:GDP increase by 5.2% - directly lifting 40M people out of poverty in sub-Saharan Africa

AHCIET:DD will contribute US$15billion to Latin America

Deloitte:US$15billion MNO Investment in mobile broadband in next 2 years in Brazil

Analysys Mason:Saudi could attain over 400k jobs by 2020 with the availability of DD and 2.6GHz

Significant socio-economic benefits from the release of harmonised spectrum to deliver mobile broadband (GDP and job growth..)

Spectrum Award Design

Auctions can provide an economically efficient means to allocate spectrum

– When there is competition for scarce spectrum resources – When demand is expected to exceed supply– But not the only option available to government to manage spectrum

allocation and should only be used in appropriate circumstances Consultation with the operators, and others stakeholders is essential There is no ‘one fits all’ design for spectrum auctions. Each auction needs

to be designed to meet the market circumstances and to achieve the specific objectives of the auction

Auctions should be designed – To realise the long term economic value of the spectrum to the economy as a

whole– Not to maximise short-term revenue for governments. – to be fair, transparent and appropriately designed for the specific market

circumstances

Recent results of Digital Dividend auctions in Europe

Situation in Germany The 800MHz band was awarded through auction in March 2010. The

licences included coverage obligations requiring licensees to roll-out services to the most rural communities first, which previously had inadequate broadband services, before moving to more populated areas.

The spectrum was awarded to T-Mobile (Deutsche Telekom), Vodafone, and Telefónica (which uses the O2 brand)

The first operator to use this band was Vodafone when it commenced its LTE roll out in September 2010 . T-Mobile subsequently launched LTE using the 800MHz band in April 2011, with Telefónica launching the LTE using this band in July of the same year.

Within 12/18 months, the LTE800 coverage obligations have been fulfilled in 12 Federal states.

Source: BNetzA

Situation in Sweden In March 2011 the Swedish Post and Telecom Authority (PTS) auctioned the

800MHz band. The spectrum was awarded in 2×5MHz blocks, with the block at the top of the band (FDD6) having a coverage obligation attached to the licence. This coverage obligation required the operators to cover specific rural geographies with mobile broadband. These geographies previously had inadequate broadband coverage.

The spectrum was awarded to TeliaSonera, Net4Mobility (a joint venture between Telenor and Tele2), and Hutchison 3G. Net4Mobility acquired the spectrum licence with the coverage obligation.

TeliaSonera began the deployment of LTE using 800MHz spectrum days after the auction process ended, with Hutchison 3G launching in the spring of 2011 .

Source: PTS

Agenda

Data Traffic for Mobile Broadband

Importance of the Digital Dividend for Mobile Broadband

Global Benefit of Releasing Harmonised Spectrum for Mobile Broadband

Summary

Summary Meeting the growth in demand for mobile services

Data demand continues to grow1. Additional spectrum being made available and ensuring that the

spectrum goes to the use and users which will maximise its benefits to society

2. Facilitating international harmonisation to support roaming and enable scale economies to lower the cost of equipment

Evaluate the global benefit of the Mobile Broadband in the Digital Dividend1. Significant socio-economic benefits from the release of harmonised

spectrum to deliver mobile broadband (GDP and job growth..)

THANK YOU