Operators and vendors are a pessimistic bunch when you speak to them about data growth. While it has been a boon for their industries, the downside is looming: the dreaded capacity crunch. Soaring video consumption and social networking on ever more affordable smart devices could lead to the day where everything freezes up.
The GSMA says new spectrum is critical, with next year’s World Radiocommunication Conference, when the future of the 700MHz band will be thrashed out among regulators from a wide range of industries, a key moment.
Predictions about exactly how much spectrum the mobile industry will need vary. According to the International Telecommunications Union, between 1340 and 1960MHz will be needed by 2020. The GSMA is more specific, suggesting between 1600 and 1800MHz of new frequency.
Herman Schepers, Senior Director of the GSMA’s Spectrum Campaign, told Mobile Europe: “If you look at what [the ITU figures] actually mean, that’s a 44-80 times predicted growth in data traffic until 2020. Between 2008 and 2013, data grew 45 times.”
So operators want greater capacity and quickly. The problem is that so does everybody else. In London this week, Westminster eForum held a conference on the potential of spectrum sharing, hosting figures from the mobile and television industries, the British Government and regulator Ofcom.
As Tony Lavender, CEO of Plum Consulting, noted, it’s not just a wireless broadband problem. “It’s dangerous to have everything else pushed to one side,” he said.
Inge Hansen, Head of Economic Regulation and Spectrum at EE, laid out the case for operators. “Spectrum has no intrinsic value,” she said. “It’s just thin air. The value attached is defined by the associated investment that companies make in exploiting that spectrum. Our investments have only been made on the basis of long-term exclusive access.”
Hansen argued mobile operator spectrum is already shared, with its customers, MVNOs and M2M partners.
Roberto Ecole, Senior Director of Long-Term Spectrum at the GSMA, argued that “completely dynamic spectrum” would create difficulties for operators when it comes to quality of service and economics.
Arqiva CTO Cameron Rejali made a similar point: “A downside is when it gets too successful and you end up with a very low quality service, for example 2.4GHz Wi-Fi. The band is overcrowded and it’s difficult to find clear channels in public urban spaces.”
However, Rejali went on to argue that the debate is more complex than operators make out. While data usage is surging, it’s not a consistent growth.
He said: “Really deep congestion only happens for a few hours in specific geographical locations. That’s a problem that can be solved differently than making spectrum available for an entire country.”
Small cells were raised as one answer. More flexibility with fixed assets was another. Chris Cheeseman, Spectrum Strategy Director at BT, thinks more can be done with fixed networks but warned that building more rural networks “doesn’t really make any sense”. He said: “The key here is facilitating shared infrastructure, with competition at a national level.”
Nevertheless, he said spectrum sharing is a “supplement” and exclusivity of ownership remains the best course of action.
Gérard Pogorel, Professor of Economics at Télécom ParisTech, pointed out that the current method of auctioning off spectrum was counterproductive when it came to its long-term implementation.
He said: “There's a growing unease with pure and simple auctions for radio spectrum. The billions spent on licences are then not available to build the network and provide services.” What could replace them was left unsaid, unfortunately.
The UK is set for a fresh auction, with the announcement this morning that Ofcom will sell off the 2.3GHz and 3.4GHz bands to operators within the next 18 months. But figures from the regulator showed that despite the noise they are making, operators have relatively less spectrum compared to other industries.
According to Philip Marnick, Ofcom’s Group Director of Spectrum Policy, eight percent of spectrum access was by mobile operators, compared to 52 percent used by the public sector and 20 percent used by satellites.
This is partly the reason operators are agitating so heavily for fresh frequency. But as the debate continues as to how they fulfil booming demands and amid uncertainty about how much spectrum they will get in the future, it remains unlikely telcos will be prepared to share.