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GSMA - Roberto Ercole - Digital dividend in the UHF band
Digital Dividend in the UHF Band - CTU Workshop Switchover Digital Dividend II: Challenges and Opportunities in the New Digital Era Prague - 17 th and 18 th March 2009 (Prague) Roberto Ercole, GSM Association http://www.gsmworld.com/digital_dividend/
Brief History of the GSMA <ul><li>Founded in 1987 by 15 operators committed to the joint development of a cross border digital system for mobile communications. </li></ul><ul><li>Became the global trade group for the mobile industry, representing the vast majority of mobile phone networks across the world </li></ul><ul><ul><li>Now encompassing commercial, public policy and technical initiatives, ensuring mobile services work globally </li></ul></ul><ul><li>The Association’s members now serve more than 3.5 billion customers </li></ul><ul><ul><li>More than 750 operator Members across 218 countries </li></ul></ul><ul><ul><li>Over 200 Associate Members (manufacturers and suppliers) </li></ul></ul>
The Problem :How to meet the dilemma of spectrum demand for Broadcasting and Mobile in 470-862 MHz band? Answer : to promote alternative broadband infrastructure, by allowing a small portion of UHF (72 MHz initially) for mobile broadband But how do you get to that answer? Cost Benefit Analysis
Marginal value – Cost Benefit Analysis <ul><li>The amount of spectrum required per service depends on economic and social value – determined by a cost benefit analysis </li></ul><ul><li>For 470-862 MHz what is the best spilt between broadcasting and other services like mobile broadband? </li></ul><ul><li>A number of studies have been done for industry and regulators – they suggest at least a harmonised 72 MHz (790-862 MHz) for mobile broadband – but more is necessary in some markets now and this will only grow with time </li></ul><ul><li>They also show the law of diminishing returns, and that most of the social value is captured by having some, but not all the spectrum for broadcasting </li></ul><ul><li>They show significant economic benefit from boosting broadband penetration, particularly in rural areas (as well as better indoor coverage) </li></ul>
Example CBA report of the Irish Regulator <ul><li>1) Europe Economics: How can Ireland best benefit from DD http://www. comreg . ie /_ fileupload /publications/CP50e. pdf </li></ul>The analysis shows the maximum combined value (broadcasting and mobile) is between 80 and 120 MHz in Ireland. It goes from € 2.11 billion for broadcasting alone to €3.3 billion for mobile with 120 MHz of Digital Dividend spectrum (NPV 2008-2027). Ireland has approx. half Czech population in about same size country.
Other CBA’s on Digital Dividend Analysis Masons : March 08 commissioned by ARCEP (France ) http://www.analysysmason.com/PageFiles/4324/Valuation%20of%20the%20digital%20dividend%20in%20France%20(English%20Version).pdf Key findings of the report include: Allocating a proportion of the released spectrum for mobile broadband services adds greater value to the economy than if this band were allocated exclusively to digital TV services . Over €25 billion more between the years 2012 and 2024. Spectrum Value Partners March 08, Getting the Most out of the Digital Dividend http://www. spectrumstrategy .com/Pages/GB/perspectives/Spectrum-Getting-the-most-out-of-the- digita -dividend-2008. pdf Key findings are: Allocating at least some UHF spectrum to mobile operators would generate between €63 billion and €165 billion in net present value (NPV). This is in addition to the estimated €2.5-5 trillion in NPV that mobile generates for the European economy without any UHF spectrum. SCF The Mobile Provide: Economic Impacts of Alternative Uses of the Digital Dividend May – September 2007 www. digitaldividend . eu could boost Europe’s GDP by as much as 0.6% per year by 2020 generating thousands of jobs throughout the EU. European Commission sponsored study ongoing http://www.analysysmason.com/Materials-from-the-Commission-stakeholders-hearings-on-6-March-2009
What is happening with other countries Momentum building for mobile broadband in UHF
Europe is converging on 790 – 862 MHz for Digital Dividend spectrum <ul><li>France, Switzerland, Sweden, Finland have opted for 790 to 862 MHz </li></ul><ul><li>Germany is allowing trials of HSPA in 790 to 862 MHz – final decision next month </li></ul><ul><li>UK is consulting on this option </li></ul><ul><li>Ireland commissioned a study showing there should be @100 MHz for the Digital Dividend in Oct 08 </li></ul><ul><li>GSMA has spoken to a number of Administrations that are actively considering this band – Poland, Slovakia </li></ul>
Economies of scale is the driving force <ul><li>A strong momentum is building around 790 – 862 MHz as an initial start </li></ul><ul><li>Administrations are realising that without a mass market to develop terminals handsets won’t be developed (100’s of millions) </li></ul><ul><li>Large markets will offer choice and improve RF performance </li></ul><ul><li>However adding bands to handsets poses engineering challenges so that the number of bands should be minimised if possible </li></ul><ul><li>Commission has launched a study to develop a roadmap for the DD, and develop CBA’s with Analysis Masons </li></ul><ul><li>CEPT developing band plan (2 x 30 MHz) after Commission mandate </li></ul>
What is the benefit for the Czech Republic from mobile broadband at UHF Coverage of rural areas at about 30% of the cost of 2100 MHz
Jobs and knowledge economy needs Broadband <ul><li>Broadband has been targeted by China “golden projects” to allow them to “jump-start” by deploying nationwide fibre-optic network </li></ul><ul><li>India – fibre optic core to kick start the international access required to be in the knowledge economy </li></ul><ul><li>However fibre network will not help without last mile broadband access (DSL or wireless) </li></ul><ul><li>Knowledge economy encourages more people to move from low paid industries (mining, lumber, fishing etc) to high paid professional jobs (engineer etc) </li></ul><ul><li>Creates clusters of expertise that help reinforce themselves (Silicon Valley) </li></ul><ul><li>Allow Czech citizens to take part in the “knowledge economy” </li></ul>
Mobile Broadband – Long Tem Evolution : offering mobile “ADSL” INFSO-FUTURE-NETWORKS@ec.europa.eu http://cordis.europa.eu/fp7/ict/future-networks Feb. 2009 “ With LTE, there is strong potential to generate vast economies of scale unmatched by any previous generation of broadband access technology. LTE could extend the high speed Internet access enjoyed by urban and suburban users today to isolated and rural areas. “ “ The European industry foresees around 2 billion broadband users by 2012, of which two-thirds will be using mobile broadband. “
Spectrum vs. GDP per Capita – Adding 700 MHz (52 MHz without D) in 2008 USA with AWS USA with 700MHz
Mobile Broadband developments HSPA and Long Term Evolution <ul><li>High Speed packet Access : and enhancement of UMTS/3G </li></ul><ul><li>Can offer data rates comparable to DSL (7 Mbps+ per carrier) </li></ul><ul><li>Real alternative to ADSL from consumer’s view point </li></ul><ul><li>With access to UHF mobile broadband can help provide coverage in rural areas there is little ADSL or where houses are to far from the exchange to access broadband </li></ul><ul><li>Can help foster competition where fixed (ADSL) is not as widely available (Eastern Europe) </li></ul><ul><li>LTE will offer even higher data rates than HSPA and will deliver data more efficiently and cost effectively </li></ul>
Impact on Broadcasting What is the marginal benefit of spectrum
What would an extra 100 MHz for Broadcasting do in the longer term? <ul><li>Analogue – 58% </li></ul><ul><li>Cable – 20% </li></ul><ul><li>Digital free to air 12% </li></ul><ul><li>FreeSat – 5% </li></ul><ul><li>IPTV – 2% </li></ul>Source informa TV International. source book 2009 Current use in Czech Republic : Viewing through DTT New HD channels, viewed in HD SD channels new to DTT Total viewing HD scenario SD scenario SD scenario OR
Spectrum needed is 790 to 862 MHz Harmonised by ITU and CEPT Czech Republic needs to make this band available for mobile broadband to boost broadband penetration in rural areas
Conclusions <ul><li>Access to harmonised spectrum in UHF key to delivering broadband widely and helping to meet Lisbon targets and complement fixed ADSL – 790 to 862 MHz </li></ul><ul><li>Czech Republic’s international competitiveness and her citizens stand to benefit greatly from encouraging mobile broadband </li></ul><ul><li>Important for rural sustainability and economic growth and jobs </li></ul><ul><li>Broadband is a social commodity or right – lack of it will lead to social exclusion </li></ul><ul><li>There is sufficient spectrum for both broadcasters and mobile/other services </li></ul>
US 700 MHz Auction Results – March 08 Deploy MediaFLO mobile TV technology across its E block winnings and will use its B block winnings for research and development? $558 million B and E Qualcomm Perhaps a MediaFlo-like portable or mobile video system or a terrestrial mechanism for providing standard definition local-into-local programming. $711 million E Frontier Wireless (Echostar) Deploy LTE technology $6.6 Billion B AT&T Mobility Launch of an already announced Long Term Evolution (LTE) network in the 2010 timeframe. $9.4 Billion A, B and C Verizon Reported Plans Price Blocks Winner