Frequency usage in Austria

1. Frequency usage in Austria Georg Serentschy CEO Telecommunications Current regulatory issues in the area of telecoms and radio frequency resource usage

2. 1 European developments 2 Austrian developments 3 Spectrum as a key enabler 4 Experience in Austria 5 Conclusions The future information society (digital agenda 2020) requires broadband. European framework and discussion • Broadbandcoverage Current regulatory issues in the area of telecoms and radio frequency resource usage

3. 1 European developments 2 Austrian developments 3 Spectrum as a key enabler 4 Experience in Austria 5 Conclusions Challenge: High speed broadband for everyone. European framework and discussion 2015.Eu Agenda (Parliament plenary) Granada Strategy (Council) Europe 2020 Strategy (Commission) Broadband targets • 2013: basic broadband for all EU households at “competitive price” (speed and price not defined). • 2015: 75% of mobile subscribers should have access to “high-speed” wireless services (speed not defined). • 2015: 50% of EU households should be connected to “very high-speed” networks (not defined). • 2020: all citizens should have access to “veryhigh” internet speeds (again not defined). • 2013: 100% coverage of basic broadband for all citizens (not defined). • Promote “wide take-up” of high-speed broadband by 2020 (not defined). • The aim is to deliver sustainable economic and social benefits from a Digital Single Market based on fast and ultra fast internet and interoperable applications, with broadband access for all by 2013, access for all to much higher internet speeds (30 Mbps or above) by 2020, and • 50% or more of European households subscribing to internet connections above100 Mbps. Current regulatory issues in the area of telecoms and radio frequency resource usage

4. 1 European developments 2 Austrian developments 3 Spectrum as a key enabler 4 Experience in Austria 5 Conclusions Austria launched several broadband initiatives with focus on different aspects. Initiatives in Austria to push ICT and broadband Focus EU-Initiative Initiative in Austria Broadband connectivity for all 2003: Broadband Status report 2003: Broadband Initiative E-Europe 2002/2005 Big picture (Supply and demand) 2005: ICT-Masterplan i2010 Daily usage 2009: Internet Declaration 2010: ICT best projects Post-i2010 Current regulatory issues in the area of telecoms and radio frequency resource usage Slide 4

5. 1 European developments 2 Austrian developments 3 Spectrum as a key enabler 4 Experience in Austria 5 Conclusions Market trend: Shift from fixed to mobile. Case Austria Number of fixed and mobile minutes Source: RTR Current regulatory issues in the area of telecoms and radio frequency resource usage

6. 1 European developments 2 Austrian developments 3 Spectrum as a key enabler 4 Experience in Austria 5 Conclusions Market trend: Strong growth on 3G. Case Austria Number of 3G SIM subscribers Source: RTR Current regulatory issues in the area of telecoms and radio frequency resource usage

7. 1 European developments 2 Austrian developments 3 Spectrum as a key enabler 4 Experience in Austria 5 Conclusions Current status: High mobile broadband penetration in Austria. Mobile BB penetration rate - dedicated data service cards/modems/keys Source: European Commission, Jan 2009 Current regulatory issues in the area of telecoms and radio frequency resource usage

8. 1 European developments 2 Austrian developments 3 Spectrum as a key enabler 4 Experience in Austria 5 Conclusions Mobile broadband is the main market driver. Case Austria Broadband growth Mobile BB Source: RTR Current regulatory issues in the area of telecoms and radio frequency resource usage

9. 1 European developments 2 Austrian developments 3 Spectrum as a key enabler 4 Experience in Austria 5 Conclusions Spectrum is a scarce resource and gets more and more important for future development. Spectrum Trends • Increasing demand for mobile voice and mobile data • Utilization of spectrum increases • But: also trade-off between denser network (higher network costs) and additional spectrum (higher licence costs) Source: European Commission, Jan 2009 Current regulatory issues in the area of telecoms and radio frequency resource usage

10. 1 European developments 2 Austrian developments 3 Spectrum as a key enabler 4 Experience in Austria 5 Conclusions Auctions are a relatively new assignment procedure. Austria was one of the first countries in Europe using auctions. Why auctioning frequencies? Auctions in Europe The 2nd GSM licence in 1996 was awarded by a procedure which is very similar to an auction. Auctions in the USA Auctions in New Zealand and Australia Lottery in the US Beauty contest & First come first served 1980 1990 2000 Current regulatory issues in the area of telecoms and radio frequency resource usage

11. 1 European developments 2 Austrian developments 3 Spectrum as a key enabler 4 Experience in Austria 5 Conclusions The choice of the right selection criteria to attribute spectrum is important. Why auctioning frequencies? • Good selection procedure • Assign frequencies to those operators which value it at most • This are normally the most efficient one • No detailed knowledge of NRAs about value and business opportunities necessary • Produces ‘market prices’ • Fosters efficient use of scarce resource • Signal scarcity which helps to decide on the optimal usage • Legally secure • Objective, non-discriminatory and transparent • Satisfies goals of the EC directives • Financial aspects • Although it contributes to the budget this is not the main objective • Economists doubt negative impacts on investment and customer tariffs Current regulatory issues in the area of telecoms and radio frequency resource usage

12. 1 European developments 2 Austrian developments 3 Spectrum as a key enabler 4 Experience in Austria 5 Conclusions The key elements of a tendering process must be clearly outlined.References for consequences in case of non compliance are included in the terms of the license. License conditions (selection) Comment Topic Coverage • Minimum Coverage obligation (normally stepwise with a timetable) & network sharing • Expiry date Validity • Minimum set of services to be offered including quality specifications or restrictions of services Services • E.g. right to use national roaming Access rights Access obligations • E.g. obligation to offer national roaming • Sometimes fees for the frequencies are stipulated in the license Regular fees • Fees to be paid if coverage obligations are not met in due time Penalties In addition to that some other rights and obligations may arise from general competition law or sector specific provisions (e.g. SMP status) for mobile operators. Current regulatory issues in the area of telecoms and radio frequency resource usage

13. 1 European developments 2 Austrian developments 3 Spectrum as a key enabler 4 Experience in Austria 5 Conclusions The EU framework foresees a clear escalation mechanism to enforce compliance with conditions. Escalation to enforce compliance (simplified Art 10 General Authorization Directive) Comment Stages 1 Non compliance - notification • Notification by NRA -> undertaking may react within 1 month 2 • NRA shall take appropriate and proportionate measures to ensure compliance Non compliance - measures • NRA shall stipulate a reasonable period for the undertaking to comply • E.g. financial penalties 3 • NRA may prevent undertaking from continuing to provide electronic networks or suspend or withdraw rights of use • Only in cases of serious and repeated breaches • Non compliance measures failed Serious and repeated breaches 4 • NRA may take interim measures • Undertaking must be able to show its views • NRA has evidence of breach of the conditions • There is a serious threat Immediate and serious threat For all cases undertakings shall have the right to appeal against measures. Current regulatory issues in the area of telecoms and radio frequency resource usage

14. Experience in Austria Current regulatory issues in the area of telecoms and radio frequency resource usage

15. 1 European developments 2 Austrian developments 3 Spectrum as a key enabler 4 Experience in Austria 5 Conclusions Austria has a lot of experience in the field of auctioning frequency. Currently a procedure relating to 2,6 GHz is going on. Case Austria Frequency attribution procedures ongoing Current regulatory issues in the area of telecoms and radio frequency resource usage

16. 1 European developments 2 Austrian developments 3 Spectrum as a key enabler 4 Experience in Austria 5 Conclusions The design of the procedure and auction needs to be tailored for the country. Spectrum issues • Definition of spectrum packages • Definition of regions • Definition of coverage requirements • Definition of usage in border regions • Definition of auction format • Infrastructure sharing • Frequency trading • Refarming Examples Examples Current regulatory issues in the area of telecoms and radio frequency resource usage

17. 1 European developments 2 Austrian developments 3 Spectrum as a key enabler 4 Experience in Austria 5 Conclusions In the UMTS auction six operators won spectrum. After the auction we had several cases of frequency trading. Case Austria 2100 MHz (year 2000) auction results Current regulatory issues in the area of telecoms and radio frequency resource usage

18. 1 European developments 2 Austrian developments 3 Spectrum as a key enabler 4 Experience in Austria 5 Conclusions Frequency trading enables more flexibility for the market. Trading resulted in a different attribution of the UMTS frequency. Case Austria Frequency trading cases Current regulatory issues in the area of telecoms and radio frequency resource usage

19. 1 European developments 2 Austrian developments 3 Spectrum as a key enabler 4 Experience in Austria 5 Conclusions The current situation shows the existing four UMTS networks in Austria. Case Austria 2100 MHz spectrum usage today FDD overview Uplink FDD overview Downlink Current regulatory issues in the area of telecoms and radio frequency resource usage

20. 1 European developments 2 Austrian developments 3 Spectrum as a key enabler 4 Experience in Austria 5 Conclusions Refarming is a hot issue in Austria, however it would provide more flexibility of spectrum use for the future. Case Austria 900/1800 MHz spectrum usage today • today used for GSM • possible future use for 3G techologies (e.g. UMTS, LTE) • 900 MHz • 1800 MHz Current regulatory issues in the area of telecoms and radio frequency resource usage

21. 1 European developments 2 Austrian developments 3 Spectrum as a key enabler 4 Experience in Austria 5 Conclusions Currently we are in the process to allocate the frequency range 2500 - 2690 MHz. This will again push the possibilities for mobile broadband. . Case Austria 2,6 GHz auction • 14 base frequency blocks in the 2500 – 2570 MHz frequency range (referred to below as the "lower band") paired with frequencies in the 2620 – 2690 MHz frequency range (referred to below as the "upper band"). • The bandwidth of each base frequency block is 2 x 5 MHz (5 MHz in both the lower and upper band). In the course of this procedure, these paired base frequency blocks are labeled A1 to A14 and assigned to Category A. • 10 unpaired base frequency blocks in the 2570 – 2620 MHz frequency range. The bandwidth of each base frequency block in this range is 5 MHz. In the course of this procedure, these unpaired base frequency blocks are labeled B1 to B10 and assigned to Category B. paired unpaired paired Current regulatory issues in the area of telecoms and radio frequency resource usage

22. 1 European developments 2 Austrian developments 3 Spectrum as a key enabler 4 Experience in Austria 5 Conclusions The auction procedure will take place in September 2010. Case Austria 2,6 GHz auction - timetable Current regulatory issues in the area of telecoms and radio frequency resource usage

23. 1 European developments 2 Austrian developments 3 Spectrum as a key enabler 4 Experience in Austria 5 Conclusions All rules are published in the tender document in order to provide the maximum level of transparency. Case Austria 2,6 GHz auction – tender document • The tender document has been published in the internet.http://www.rtr.at/en/tk/FRQ_2600MHz_2010_AU/F4_08_TenderDocumentation_2_6_GHz.pdf • Main content 1 Legal framework 2 Objects of the auction 3 Auction design: Fundamentals 4 Assignment procedure 5 Costs and fees Current regulatory issues in the area of telecoms and radio frequency resource usage

24. 1 European developments 2 Austrian developments 3 Spectrum as a key enabler 4 Experience in Austria 5 Conclusions A fair and reliable framework for spectrum is necessary to provide the maximum benefit for the market development. Conclusions/Experiences 1 Information society is key for the next years. 2 One main issue is how to provide broadband infrastructure for the future. Mobile infrastructure will play an increasingly important rule in the future and therefore spectrum gets more and more important. 3 Summary 4 Fair and transparent approaches to attribute frequencies are necessary. Auctioning and frequency trading provide flexibility for the use of spectrum. Refarming is already a big issue. 5 Austria has quite a comprehensive experience with auctions. Currently a 2,6 GHz auction is prepared. 6 How can we tailor made the best framework for spectrum? Question Current regulatory issues in the area of telecoms and radio frequency resource usage