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Telecom Insider Excerpt
After the European Parliament ruled earlier in 2009 to let countries optimize the use of existing radio spectrum for telecommunications services, national regulators across Europe have begun consultations on refarming 900MHz-band spectrum previously allocated to GSM services. This spectrum is instead to be used for the next generation of mobile communications, namely 3G-UMTS, which has until now been confined to the 2.1GHz band. The continued increase in 3G subscriptions (see Exhibit 1) has brought unprecedented growth in traffic-hungry mobile broadband computing subscriptions and created a pressing need for spectrum regulations to be updated. Spectrum refarming aims to scrap existing technological restrictions on 900MHz licenses and allow UMTS service over the same channels, effectively expanding 3G network coverage while improving service quality at a much lower cost than through 2.1GHz networks.
Despite the benefits of 3G on the lower-frequency spectrum, some 900MHz operators remain skeptical about changes to the spectrum status quo. Given the historical imbalances in spectrum holdings, which resulted from operators entering the market after the 900MHz auctions, those with 900MHz assets see refarming as a threat to their competitive advantage as well as to the quality of their networks. But as existing mobile networks are stretched to their limits, spectrum refarming offers the most cost-efficient and practical method of meeting demand. Pyramid Research believes spectrum refarming, although controversial, will benefit operators in Europe by boosting network capacity economically while improving the availability and quality of existing services. Also, refarming will benefit consumers by improving broadband coverage in rural areas and enabling lower prices on 3G services.
This Insider analyzes the advantages of refarming 900MHz spectrum for UMTS, looking at data usage, mobile broadband computing, frequency characteristics, capex, 3G coverage and competition. It draws on the refarming experience in three key countries, Finland, Switzerland and the UK, to discuss different regulatory considerations and evaluate strategies.
Published monthly for each of the world’s most dynamic regions, Telecom Insiders are packed with trend analysis, industry best practices, market sizing and forecasting, competitor analysis, and case studies, providing you information you can leverage to make better business decisions. For more information about Telecom Insiders, please contact Amalia Vega via email at avega@pyr.com or telephone at +1.809.330.4520
Author: Andrei Tchadliev
Publication Date: July 2009
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