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ITU Regional Initiative for Europe on Digital Broadcasting 5-7 November 2012, Budapest, Hungary

ITU Regional Initiative for Europe on Digital Broadcasting 5-7 November 2012, Budapest, Hungary. Utilization of digital dividend decisions and experiences. Wladimir Bocquet Senior Director Global Spectrum Policy GSM Association. About GSMA.

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ITU Regional Initiative for Europe on Digital Broadcasting 5-7 November 2012, Budapest, Hungary

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  1. ITU Regional Initiative for Europe on Digital Broadcasting5-7 November 2012, Budapest, Hungary Utilization of digital dividend decisions and experiences Wladimir Bocquet Senior Director Global Spectrum Policy GSM Association

  2. About GSMA • Representing the interests of the worldwide mobile communications industry. Nearly 800 operator members covering over 200 countries. • More than 200 associate members from the broader mobile ecosystem, including handset makers, software companies, equipment providers, Internet companies, and media and entertainment organization www.gsma.com

  3. What’s at stake for mobile industry? Data Explosion: Rapid changes in mobile service provision such as usage trends and number of important social and behavioural changes have led to previously unpredicted patterns of data consumption amongst mobile users. Mobile data traffic is still expected to significantly increase in the coming five years Spectrum Resource: Spectrum is the lifeblood of the mobile industry. The amount of spectrum made available and the regulatory conditions on which it is made available fundamentally drive the cost, range and availability of mobile services. Spectrum is a scarce resource and public State property Vital input to many industries Radio waves do not stop at national borders cross border issues have a significant role in spectrum management Spectrum Policy: Choosing the appropriate spectrum policy licensing framework to facilitate the large investments required in rolling out networks and introducing updated technologies and new services

  4. Agenda Data Traffic for Mobile Broadband Importance of the Digital Dividend for Mobile Broadband Global Benefit of Releasing Harmonised Spectrum for Mobile Broadband Summary

  5. Agenda Data Traffic for Mobile Broadband Importance of the Digital Dividend for Mobile Broadband Global Benefit of Releasing Harmonised Spectrum for Mobile Broadband Summary

  6. Mobile global data traffic The growing adoption of data services has become the major source of traffic since 2010 On the Analysis Masson forecasts , mobile traffic is expected to grow at a CAGR (Compound annual growth rate) of 42% to reach 28 000 PB per year in 2015. Estimates data traffic based on multiple sources Source: ITU-R M.2243 Report

  7. Mobile global data traffic The ITU-R M. 2243 Report concludes “The current data traffic (in year 2010) is more than 5 times greater than some of the estimates for Report ITU-R M. 2072 (WRC-07). “ “Actual traffic being experienced by some operators today (year 2011) is even greater than some of the 2020 forecasts given in Report ITU-R M.2072.[…].” Comparison of ITU-R M.2072 with Current Data Source: ITU-R M. 2243 Report This Report clearly indicates that the ITU-R should consider this increasing mobile broadband traffic demand.”

  8. Factors impacting traffic forecastDiversity of devices Tablet generates 500 times as much data traffic as a basic mobile phone Smartphones generate, on average, around 50 times more data per month thana basic phone Average modem/dongle use, with laptop users generating as much as 1300 times that of a “standard” 3G phone Mobile traffic (PB per year) by device type Source: ITU, Analysys Mason  Mobile data usage is heavily device-dependent

  9. Factors impacting traffic forecastNumber of devices 2020 12 Billion Mobile Connected Devices 2011 6 Billion Mobile Connected Devices Source: Machina Mobile world has reached another milestone with Internet becoming increasingly mobile. Ericsson, based on industry information, estimates that the number of mobile subscription will reach 9 billion end of 2017 Spectrum is a key resource/element for Mobile Broadband development

  10. Agenda Data Traffic for Mobile Broadband Importance of the Digital Dividend for Mobile Broadband Global Benefit of Releasing Harmonised Spectrum for Mobile Broadband Summary

  11. Spectral efficiency Global trend towards IMT systems • IMT / IMT-Advanced family • Provides a global ecosystem with inherent mobility • Dramatically improves speed and latency

  12. Frequency bands available for the development of the Mobile Broadband Region 1 options Country objectives Business drivers Below 1 GHz • 800MHz • 900MHz Above 1GHz • 1800MHz • 2100 MHz • 2600 MHz • Coveragerequires low frequency spectrum for rural and in-building • Capacity requires more total spectrum Acquire Digital Dividend Extend licences & refarm to UMTS Extend licences & refarm to UMTS / LTE Acquire new spectrum Acquire new spectrum

  13. Effect of frequency on range and capex • Coverage of rural areas at about 30% of the of 2100 MHz

  14. Map legend Impact of the digital dividend Band 800MHz indoor coverage 800MHz outdoor coverage 2.6GHz indoor coverage 2.6GHz outdoor coverage Base station

  15. Maximise the harmonisation in ITU-R Region 1Digital Dividend: 790 – 862 MHz Harmonised technical conditions of use in the 790-862 MHz frequency band for mobile broadband ITU-R Recommendation M.1036 Maximise the harmonisation in ITU-R Region 1 Facilitate innovation and roaming Enable economy of scale Help managing cross-border interference 30 MHz (6 blocks of 5 MHz) 30 MHz (6 blocks of 5 MHz) Guard band Duplex gap FDD downlink FDD uplink 791 832 862 790 821

  16. Agenda Data Traffic for Mobile Broadband Importance of the Digital Dividend for Mobile Broadband Global Benefit of Releasing Harmonised Spectrum for Mobile Broadband Summary

  17. The benefits of using the Digital Dividend for mobile broadband An increasing number of countries are looking to transition from analogue TV to digital in order to reap the benefits of the digital dividend • The greater efficiency of digital broadcast networks means that it is possible to release some spectrum for other uses, notably mobile broadband • Across the world, two harmonised UHF bands have been identified for mobile broadband: • 800MHz band (790–862MHz) in ITU region 1 • The economic and social benefits of clearing this digital dividend spectrum for mobile use have clearly been demonstrated in numerous studies European Commission study Analysys Mason concluded that using the 800MHz band for wireless broadband could generate between EUR50 billion and EUR190 billion of private value in addition to social value, across the EU

  18. Policy impact of usage of the Digital Dividend Contribution to ICT ecosystem (economic contribution) Which option contributes more to ICT suppliers Which option contributes more to GDP and creation of industry jobs? Direct economic contribution Scenario definition (spectrum allocated to broadcasting or mobile broadband?) Which option contributes more to other sector of the economy in term of GDP growth and jobs? Indirect economic contribution Which option provides more benefits (“welfare”) to society? Social impact

  19. Value creation can be estimated in terms of its economic and social impacts and benefits Contribution to the GDP growth Direct contribution to the economy Direct job creation Supply Side effects Contribution to the GDP growth Indirect contribution to the economy Indirect job creation Additional taxes Demand Side effects Consumer surplus

  20. Socio-economic benefitAllocating harmonised mobilebroadband Analysys Mason: Saudi could attain over 400k jobs by 2020 with the availability of DD and 2.6GHz BCG: $1trillion GDP impact from DD in Asia Pacific AHCIET: DD will contribute US$15billion to Latin America Plum: GDP increase by 5.2% - directly lifting 40M people out of poverty in sub-Saharan Africa Deloitte: US$15billion MNO Investment in mobile broadband in next 2 years in Brazil Significant socio-economic benefits from the release of harmonised spectrum to deliver mobile broadband (GDP and job growth..)

  21. Spectrum Award Design • Auctions can provide an economically efficient means to allocate spectrum • When there is competition for scarce spectrum resources • When demand is expected to exceed supply • But not the only option available to government to manage spectrum allocation and should only be used in appropriate circumstances • Consultation with the operators, and others stakeholders is essential • There is no ‘one fits all’ design for spectrum auctions. Each auction needs to be designed to meet the market circumstances and to achieve the specific objectives of the auction • Auctions should be designed • To realise the long term economic value of the spectrum to the economy as a whole • Not to maximise short-term revenue for governments. • to be fair, transparent and appropriately designed for the specific market circumstances

  22. Recent results of Digital Dividend auctions in Europe

  23. Situation in Germany • The 800MHz band was awarded through auction in March 2010. The licences included coverage obligations requiring licensees to roll-out services to the most rural communities first, which previously had inadequate broadband services, before moving to more populated areas. • The spectrum was awarded to T-Mobile (Deutsche Telekom), Vodafone, and Telefónica (which uses the O2 brand) • The first operator to use this band was Vodafone when it commenced its LTE roll out in September 2010 . T-Mobile subsequently launched LTE using the 800MHz band in April 2011, with Telefónica launching the LTE using this band in July of the same year. • Within 12/18 months, the LTE800 coverage obligations have been fulfilled in 12 Federal states. Source: BNetzA

  24. Situation in Sweden • In March 2011 the Swedish Post and Telecom Authority (PTS) auctioned the 800MHz band. The spectrum was awarded in 2×5MHz blocks, with the block at the top of the band (FDD6) having a coverage obligation attached to the licence. This coverage obligation required the operators to cover specific rural geographies with mobile broadband. These geographies previously had inadequate broadband coverage. • The spectrum was awarded to TeliaSonera, Net4Mobility (a joint venture between Telenor and Tele2), and Hutchison 3G. Net4Mobility acquired the spectrum licence with the coverage obligation. • TeliaSonera began the deployment of LTE using 800MHz spectrum days after the auction process ended, with Hutchison 3G launching in the spring of 2011 . Source: PTS

  25. Agenda Data Traffic for Mobile Broadband Importance of the Digital Dividend for Mobile Broadband Global Benefit of Releasing Harmonised Spectrum for Mobile Broadband Summary

  26. SummaryMeeting the growth in demand for mobile services Data demand continues to grow Additional spectrum being made available and ensuring that the spectrum goes to the use and users which will maximise its benefits to society Facilitating international harmonisation to support roaming and enable scale economies to lower the cost of equipment Evaluate the global benefit of the Mobile Broadband in the Digital Dividend Significant socio-economic benefits from the release of harmonised spectrum to deliver mobile broadband (GDP and job growth..)

  27. THANK YOU

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