The challenges of fragmented LTE spectrum are well known, and the 700MHz digital dividend band is particularly complex. In the US, an esoteric band plan means that there is currently no roaming between the 4G networks of Verizon, AT&T and various rural carriers. In terms of global interoperability, there are even more issues, as Asia-Pacific has an entirely different band plan ‘ one which may well be adopted by other regions such as Latin America.
Recent reports point to the importance, for the economics of mobile broadband, that greater harmonization is achieved in key bands and there is rising pressure from regulators and the industry.
The highly regionalized approach to the dividend spectrum means that some areas will find themselves with non-mainstream band plans ‘ and therefore fewer or more expensive devices ‘ or with delayed spectrum sales. Such obstacles could reduce the investment in 4G equipment for the DD band by almost 11% in the period from 2012 to 2016, in a further blow to hard-pressed equipment makers, according to a report from Maravedis-Rethink.
‘Regional focus will continue to be a priority over global coordination in spectrum management. This will require additional efforts from regulators for a successful digital transition and digital dividend utilization,’ said report author Lester Garcia. The report outlines the best and worst cases in terms of the timely release of digital dividend spectrum. In the worst scenario, the lack of available DD spectrum for mobile broadband could slow down the growth in numbers of mobile broadband users by 6.3% by 2016. This reduction in subscriber uptake would reduce investments in wireless infrastructure by 10.7%.
Such issues affect the whole value chain, with knock-on effects even for GDP. The GSM Association said this week that, if Asia-Pacific succeeds in adopting a harmonized 700MHz framework, the region could generate up to $1 trillion in GDP growth between 2014 and 2020. The new spectrum could support 2.7m new jobs, 1.4m new businesses and also boost government coffers by $171bn in spectrum fees and new taxes, says the GSMA’s study, carried out with the Boston Consulting Group (BCG).
The Association’s senior director for spectrum policy and regulatory affairs, Chris Perera, said it is ‘imperative’ for the region to harmonize its 700MHz band plan for mobile services. ‘Rapid adoption and alignment would generate huge cost efficiencies in both network technology and devices, and ultimately make mobile services more accessible and affordable for consumers,’ he said.
But if some countries take a ‘non-compliant’ route, they risk interference near borders and international roaming challenges. As a result, countries next to non-compliant territories could lose up to 3% of GDP growth and 10% in new jobs, while the out-of-sync countries themselves risk forfeiting 5% of economic growth and 30% in job creation.
The region’s proposed harmonized plan was first mooted by the Asia-Pacific Telecommunity in September 2010. Countries which have committed to it include Australia, India, Indonesia, Japan, New Zealand, Papua New Guinea, Singapore, South Korea and Thailand. However, critically, China plans to follow its own plan by using 700MHz for TD-LTE, while Malaysia is considering allocating the spectrum up to 742 MHz to broadcasting.
Europe is unlikely to open up the 700MHz band for mobile services for several years ‘ the UK’s Ofcom has taken the lead but is not talking about harnessing this spectrum until 2016 or later, as the EU digital dividend band is in 800MHz. However, agencies are already studying the issues arising in the Americas and Asia. The EU’s Digital Agenda Commissioner, Neelie Kroes, takes a particularly firm line on spectrum, advocating not just a harmonized plan but centralized management for her region. She added her voice to the warnings of the effects of fragmented digital dividend recently, saying a centralized approach to this spectrum could improve its impact on the European economy by €1bn to €3bn a year.
That would boost economies of scale for carriers, encouraging them to invest in DD networks which are regarded as important to boosting rural broadband services in Europe. The centralized approach would also boost roaming and allow for harmonized services and data rates. Kroes claims a central spectrum inventory would also boost harmonization efforts, and simplify the process of freeing up new frequencies, or of reallocating unused or underused blocks.
Of course, the best case study for the risks of a fragmented digital dividend is found in the US. Here, regional carriers continue to lobby the FCC to mandate roaming across the fragmented 700MHz LTE band. Currently, there is no interoperability between Verizon’s and AT&T’s national networks, with one another or with the regional carriers’ deployments, which are mainly in the Lower A and B Blocks of the spectrum.
Some cellcos have pushed ahead regardless, notably US Cellular, which recently added to its Lower A Block holdings via a deal with CenturyLink and is playing down AT&T’s claims of interference in these frequencies. By contrast, C Spire Wireless is playing it more cautiously, initially leaving its 700MHz spectrum out of its LTE roll-out. The cellco says it cannot yet find enough devices which support its Lower A and B Block frequencies, and so it will deploy 4G initially in its 3G band ‘ though it has not specified which of its CDMA and GSM frequencies it will deploy first. It has holdings in PCS, AWS and 800MHz.
Its supplier, Alcatel-Lucent, said it would ‘not be a difficult thing to do’ to harness the 700MHz band in future, on top of the existing infrastructure. However, C Spire has said that running the service on refarmed spectrum will not be a long term solution, since it will have more difficulty scaling to handle increased data loads. C Spire risks significant FCC penalties if it does not put its 700MHz licenses to use by next summer ‘ holders of licences in the Lower A and B blocks must cover 35% of the area covered by their spectrum by June 2013. C Spire’s upcoming LTE launch will cover 1.2m people in Mississippi.
Alcatel-Lucent is upgrading some of C Spire’s CDMA base stations to support LTE, and supplying RAN, backhaul, packet core and IMS across 360 cell sites. As WirelessWeek points out, but the fate of the cellco’s originally announced 4G contract, with Samsung, is unknown. This was announced back in November 2010, but the change of vendor, and the shift to non-700MHz bands, may explain the postponement of the 4G launch from late 2011 to September 2012. C Spire, formerly known as Cellular South, operates a CDMA network that also covers parts of Tennessee, Alabama and Florida and has almost 900,000 subscribers.
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