Broadband News

Plans to use ‘digital dividend’ spectrum, freed up by switching off analogue tv, to bring mobile broadband to not spots have two fatal flaws, according to the former Chief Strategy Officer at the GSM Association, Ameet Shah.

Not only will auctioning the airwaves in equal licences leave mobile operators with services that are not economically viable, he predicts, they will also dash the hopes of those most in need of getting their broadband speeds up to the new Government target for 2012 of 2Mbps.

Shah has also worked on strategies and partnership at Ericsson and Accenture before moving to his current role of Lead Director at telecoms consultancy, PRTM. Hence he is watching, with great interest, the current talks between Kip Meek, the Government’s Independent Spectrum Broker and the mobile operators. With so much experience of the rivalries between the country’s five operators, he suspects the compromise deal being considered is bad news for the networks and their consumers.

The science bit

To understand why, we need a quick lesson in spectrum. The airwaves being released by the digital switchover (at 800Mhz) are very attractive as they are long waves which can reach deep in to rural and edge of town areas. Crucially, being long waves, they can pierce in to buildings and offer in-house voice quality and data speeds greater than the short waves currently used for 3G.

The trouble is Vodafone and O2 were given very similar spectrum to the digital dividend way back in 1982. Their 900Mhz signals reach far further than the (1800Mhz) airwaves used by T-Mobile, Orange and 3 (all 3G services currently run on 2.1Ghz). Hence the three rivals are suggesting the two old boys of the industry should give up some of that spectrum if they are to bid for similar airwaves released by the switchover to digital television in 2012.

To do this, Ofcom and then Kip Meek’s office, have suggested plans which have varied slightly but essentially focus on splitting the new 800Mhz airwaves in to three equal-sized licences. At the same time sufficient spectrum might be taken from Vodafone and O2 to offer a 3G licence to another player. Hence three or four licences will be bid for next summer and become available for use in 2012.

It makes no sense

It is this equal sharing of spectrum which Shah has a problem with. Like many telecoms consultants, he feels it is a compromise to keep the operators’ pride from being hurt when it would make more sense not to split the airwaves in to several competing networks.

“The UK is already the most fiercely competitive mobile market in Europe, margins are at their tightest so it makes no sense to slice the spectrum up and have five or six operators launching rival networks,” he says.

“In the rural areas where mobile broadband is most needed to bring areas up to the new target of 2Mbps by 2012 it would be hard for a single service to make a return, let along five or six. It really just doesn’t make sense and it’s all about keeping the mobile operators happy.

“What will happen is the operators will get their spectrum and then do what they always do. They’ll roll out fast data services to built-up areas where there’s a big return and leave the people that need mobile broadband the most, because they can’t get ADSL, to last.”

Railtrack solution

What the industry really needs, Shah insists, is a joint, single network which the operators can bid to have access to. This would have the benefit of not splitting the capacity of the released spectrum in to small, competing services and it would also prevent the waste of rolling out five or six networks. Shah points out the telecoms industry already has experience of sharing capacity because BT Openreach is a single network used by many rival ADSL providers.

“What we really need is a Railtrack or Openreach solution, that’s how it should be handled,” Shah remonstrates.

“Instead of building several networks with capacity sliced up between rivals, we should be using the same network for all operators to compete on. With the areas where there will be the lowest returns, like the Highlands of Scotland, we should run a reverse auction for who will cover the geographic region for the least subsidy.”

This approach, Shah believes, would mean a single network that could be built at a fraction of the cost of rolling out five or six networks with a crucial added advantage. In built up areas competition will probably be fierce for spectrum but in far flung rural areas, there will be a single service with huge capacity which has not been spliced and diced to keep warring mobile operators happy a rival has not gained at their expense.

“It is a shame that commercial issues are at the forefront because with we have the spectrum we need to do the job,” he insists.

“We can stop that problem of 3G working outdoors but disappearing when I close the door on my north London home. A good example was the London Underground mobile service that was going to be built. They didn’t get all the operators to build their own networks, they were due to share the same network. That same common sense principle should be applied to bringing mobile broadband to the hamlets and rural areas that will not make a return for the operators.”

How the present discussions fare will become clearer in September when the Government is to consider asking Ofcom to consult on whatever plans it and operators have agreed on for licensing new spectrum and potentially ‘refarming’ existing airwaves.