In his wireless blog, Alastair Brydon of Unwired Insight worries that mobile users will become increasingly dissatisfied with their mobile broadband services.
The latest twist in the long-running saga of UK spectrum modernisation came this week, as the Competition Appeal Tribunal upheld a decision by Ofcom, that Telefónica O2 and Vodafone must wait to refarm their 2G spectrum at 900MHz and 1800MHz for 3G usage. The network operators contended that recent EU Directives on spectrum liberalisation were sufficient to allow them to proceed with 2G refarming in the UK, but the decision requires them to wait until the UK government ratifies its own spectrum modernisation plans. For various reasons the programme of changes, including the auction of new spectrum, has been delayed from mid-2010 to late 2011 and continued legal wrangling casts further doubt on the plans.
The situation is far from ideal, with 2G spectrum currently tied to GSM technology that was standardised 20 years ago, while mobile data services boom and customers demand ever-greater coverage, quality and performance from their mobile services. Earlier in 2010, in our response to Ofcom’s spectrum consultation, we advocated early refarming of 2G spectrum. There is actually more spectrum currently occupied by 2G services (2x106MHz) than the total new spectrum available for auction at 800MHz and 2.6GHz (2x100MHz) for the deployment of cutting-edge technology such as LTE. 2G systems are highly inefficient when compared with the latest technologies. For example, LTE can support 25 times the traffic of GSM in 2x20MHz, not to mention the fact that it can provide much greater throughput to individual users. However, effective deployment of LTE requires a substantial amount of spectrum for each mobile network operator, because a bandwidth of 2x20MHz is necessary for LTE to achieve its optimum performance.
Low-frequency spectrum (at 800MHz or 900MHz) will play a crucial role in enabling the cost-effective roll out of mobile broadband services to rural areas, to address the clear coverage gap that currently exists between today’s mobile broadband services and 2G voice services (where over 99% population coverage is provided). However, 800MHz spectrum will not be available before 2012. If the UK operators are delayed in deploying LTE at lower frequencies, then their only option will be to use 2.6GHz. However, this is really only suitable for providing capacity; its short range makes it unsuitable for wide area coverage. Therefore LTE would be constrained to urban areas for at least the next few years.
Our view is that a central objective of spectrum modernisation must be to allow operators to take advantage of the most advanced technologies available, so as to squeeze the maximum benefit from the limited spectrum they have. As part of this there should be a strong motivation to move customers off 2G and on to LTE as quickly as possible. Japanese operators have already recognised the need to do this, with Softbank switching off its 2G network in March 2010 and NTT DoCoMo bringing forward its plan to do the same, to March 2011.
It may seem unfair to give Telefónica O2 and Vodafone several years head start in the deployment of LTE at low frequencies. However, sacrificing network capabilities and customer satisfaction in pursuit of competitive ideals is not the right solution either. It could be argued that T-Mobile and Orange have already done well with spectrum, as they have merged into Everything Everywhere. The most important thing is that the introduction of new technologies is not held up any longer than necessary, or the UK will become a second-class wireless nation. The Competition Tribunal itself commented that it would be ‘a tragedy if yet further legal wrangles caused more delay’. In the meantime, mobile traffic levels continue to escalate and mobile users will become increasingly dissatisfied with their mobile broadband services.