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Mobile Web 2.0 revenues to reach $22.4bn by 2013, claims research

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The global market for Mobile Web 2.0 will be worth $22.4bn in 2013, up from $5.5bn currently, according to a new report by Juniper Research. Embracing social networking & User Generated Content (UGC), mobile search and mobile IM (Instant Messaging), Mobile Web 2.0 provides a framework for delivery of collaborative applications, further enhanced and contextualised via LBS (Location Based Services).

In its latest report – ‘Mobile Web 2.0: Leveraging ‘Location, IM, Social Web & Search' – Juniper says it examines how a fundamental shift in Internet usage patterns is shaping Mobile Web development, driving subscriber adoption and forcing structural changes within the industry. At the core of this evolution is the user as a creator and consumer of content (i.e. the prosumer), and the ‘social web' – which describes a wide variety of social computing tools enabling users to develop detailed Web identities, create online communities and communicate with like-minded individuals.

"Combining the power of the social network map – namely: ‘who I know, how I know and where I know' – with that of mobility, presents the greatest opportunity for revenue generation of any of the applications as defined within Juniper's Mobile Web 2.0 framework," states Ian Chard, Juniper Research Analyst and author of the new report. "The phone is carried with us most of the time and contains a huge amount of personal data, making it a logical extension for the social network and a host of other collaborative Web 2.0 applications being mobilised."

Other findings from the reportare said to include:

– Total global revenues for mobile social networking/UGC will rocket from $1.8bn in 2008, to $11.2bn in 2013, accounting for 50% of the market, while growth in mobile search and mobile IM will be more measured
– Service revenues will account for the lion's-share of total Mobile Web 2.0 revenues, although mobile advertising represents a significant opportunity
– Far East & China, Western Europe and North America dominate the global market for Mobile Web 2.0, but will be surpassed by the developing regions over the forecast period
 
Despite the new opportunities for players across the value chain, Mobile Web 2.0 creates fresh challenges over and above those typically associated with mobilising Internet applications. MNOs must adjust to advertising-sponsored strategies and accommodate partnerships with Web-based players, while device manufacturers and technology vendors must somehow find the means to stitch together what is at present, a highly-fragmented market. Any player in Social Web is also subject to regulatory measures concerning privacy and data retention, says
Juniper.

Nordisk Mobiltelefon goes live with Ceon Product Control Center application

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Ceon Corporation has announced that Nordisk Mobiltelefon AB (NMT), a provider of mobile broadband services covering Sweden, Norway, Denmark, Poland and Ireland, is operational with the Ceon Product Control Center (PCC) product lifecycle and catalogue management software solution.

Ceon PCC is the centralised product management system at NMT as well as the operational product catalogue that is referenced by various order capture front-ends. NMT is utilising the PCC Order Negotiator Web Services API (ON API) to integrate PCC with the CRM, Web Shop and Reseller Ordering applications. The ON API executes defined product configuration and validation rules as part of responding to product content requests from the ordering front-ends, and calculates quotes for given product configurations as well.

"Ceon Product Control Center is a enabling us to rapidly, in some cases in a matter of hours, define and launch new offerings", said Thomas Norberg, CIO of Nordisk Mobiltelefon. "The PCC product modelling approach, the integration facilities, and the alignment of PCC with our standards-based systems architecture has allowed us to complete the initial deployment and integration of PCC within months."

"The initial phase of the implementation has involved integrating PCC with our ordering systems. Subsequent phases will leverage PCC to support fulfilment and billing processes as well."

"Being operational at Nordisk Mobiltelefon is a significant milestone for Ceon, and we are pleased with the rapid progress we have made this year in completing multiple deployments of our Product Control Center application ," said Peter Burke, CEO of Ceon.  "We look forward to continuing to support Nordisk achieve its business objectives through the subsequent phases of deployment and delivery of enhanced functionality in future releases."

GSA confirms 313 EDGE networks launched worldwide; 34 countries added in past year

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The latest survey of GSM/EDGE network deployments by GSA, the Global mobile Suppliers Association, is said to highlight the continuing expansion of GSM/EDGE networks and services across the globe. The survey results are summarized in a new EDGE Fact Sheet, confirming that EDGE networks are now commercially launched in 147 countries, compared to 113 countries in May 2007.

EDGE is now widely available throughout Africa, the Americas, Asia, Europe and the Middle East. For example, EDGE is now available in several new markets in Africa. Throughout the world, many operators have made significant investments to enhance the capacity and coverage of existing networks, often extending EDGE capabilities to their full GSM coverage area.

The GSA survey identified 363 EDGE network commitments in 165 countries (May
2007 = 287 commitments, 142 countries), including 313 EDGE commercial network launches in 147 countries (May 2007 = 223 launches, 113 countries).

A major driver for EDGE deployments is the capability provided to network operators to offer high speed Internet access to their customers. Over 60% of HSPA (High Speed Packet Access) network operators have also deployed EDGE for service continuity and the best user experience of mobile broadband services.

GSM/EDGE, a software enhancement to GPRS networks, is a mature global technology supported by a well developed ecosystem. The number of EDGE enabled user devices, including phones and PC datacards/modems, is estimated to have more than doubled in the same period to over 1,200 products now launched. The first commercial EDGE network was launched in June 2003. Over 75% of GPRS operators have since committed to the EDGE enhancement, delivering significant data traffic and revenue growth.

Ericsson and Dell connect on HSPA in next-generation laptops

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Ericsson and Dell have teamed up to allow Dell's next-generation laptops that to support seamless roaming on tri-band HSPA mobile broadband networks. Dell will offer built-in HSPA mobile broadband modules from Ericsson beginning in Q2 2008.

HSPA is the world's most widely deployed mobile broadband technology, with more than 185 commercially deployed networks available around the world serving more than one billion subscribers.

"Consumers are increasingly utilizing notebooks to access the high-capacity services that they have typically experienced only through a wired or WiFi connection," said Mats Norin, Vice President, Mobile Broadband Modules, Ericsson. "We are excited to work with Dell to give consumers and business users the freedom and flexibility to access internet in the way they want it, wherever they are.

"Dell's model is uniquely capable of putting the technology and wireless service in customers' hands. Teaming with Ericsson to offer built-in HSPA in our laptops ensures Dell delivers on the basic assumption that one can access critical information anytime, anywhere, with the speed and rich content that we have all come to expect," said John Thode, Vice President Small Devices, Dell Consumer Group.

Ericsson's mobile broadband modules provide the end user with a solution for broadband access on-the-go. Said to be seamlessly integrated with and optimized' to work within the notebook, the built-in mobile broadband module is also claimed to provide superior downloading and uploading performance and takes less power from the battery.

BT and O2 in new managed access agreement

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BT has today announced a new managed network solutions agreement with O2 that will see BT Wholesale provide and manage high speed connectivity between the majority of O2's base stations and its core national network in the UK.

Under the terms of the five-year agreement, BT will design and deliver a cost-efficient and flexible solution that enables O2 to manage the predicted increases in network traffic caused by new bandwidth-intensive handsets, reducing the need to invest heavily in significant and advanced network upgrading. 

The agreement takes advantage of BT's new 21st Century Network-enabled Ethernet service. The new, next generation, carrier class service provides communications providers with scalable bandwidth to meet increased demand flexibly, with costs matching actual traffic and revenue increases. This agreement is sadi to allow O2 to avoid capital investment risk, while benefiting from the economies of scale and national reach that BT Wholesale offers.

Nigel Purdy, Head of Networks Engineering, O2 UK said: "In working in partnership with BT Wholesale, we have a solution that takes care of our growing access and bandwidth needs while enabling us to realise greater cost efficiencies. It allows O2 customers to experience a better mobile broadband experience and significantly reduces our access transmission whole life cycle costs."

Sally Davis, chief executive of BT Wholesale, said: "Communications providers want to secure revenue growth from new services without risking upfront capital and operational investments.

"Consumers are increasingly using mobile devices to access and send data such as photos, video, gaming and high speed web browsing.  These bandwidth-hungry applications put considerable strain on backhaul networks. BT is able to design, tailor and manage the access network and cater to the demands that O2's customers are increasingly putting on the network."

Bubble Motion announces partnership with Turkcell

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Bubble Motion, a specialist in 'voice SMS', has announced an agreement with Turkcell, the mobile communications provider in Turkey, to launch its voice SMS service, KonusGonder.

The partnership means that all Turkcell subscribers will be able to record and send short voice messages to their friends, families or business contacts, in a similar manner to sending text messages. BubbleTALK is said to offer a more instantaneous, personal and language-agnostic alternative to text messaging, mobile email, and traditional mobile voice calling.

Turkcell plans to use the KonusGonder service to provide an innovative and unique Value-Added Service to its subscribers. The introduction of the BubbleTALK service is claimed to have been attractive to mobile operators because of its simple, revenue-generating service which eliminates the need for any additional network infrastructure.

"Turkey is a large, rapidly-growing market, so working with Turkcell, one of the most progressive and well-respected operators in the region, is an important step in establishing our market leadership, as we have in other regions," stated Bill Crawley, Vice President, Sales at Bubble Motion.

Cenk Serdar, Chief of Value Added Services at Turkcell, commented: "Turkcell is one of the most innovative operators in the world and has always recognized the benefit in working with innovative partners. With Bubble Motion we have been able to jointly bring voice SMS to the Turkish market in a very short timeframe. Our customers love to talk and love to send messages, so voice SMS is the perfect complementary product to sit alongside our very popular text SMS service. Early indications and user testing show that voice SMS will be very popular in Turkey and will be a real hit with our customers."

Thomas Clayton, CEO & President of Bubble Motion commented: "We are excited to announce this deal with Turkcell, and begin our aggressive expansion into Europe.  This is the latest in a series of partnerships for us, helping operators differentiate their offerings with a unique, popular service and enabling consumers to communicate more efficiently and impactfully while they are mobile."

Network costs threaten mobile broadband growth, claims Omnitele

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The cost of network equipment is a serious threat to the continued growth of an otherwise promising mobile broadband market, according to mobile strategy consultant Omnitele of Finland. In effect, mobile operators could pay up to several hundred EUR per broadband subscriber in network CAPEX alone – more than ten times the benchmark CAPEX per voice subscriber, it claims.

Omnitele says that in particular traffic-dependent infrastructure software license fees are a threat to mobile broadband profitability. "When data traffic increases, it quickly becomes very expensive to upgrade and expand the networks. This is a clear threat to the mobile broadband business case," says Mr Antonios Drossos, Vice President of Omnitele.

The popularity of mobile broadband flat-rate services with HSPA is driving the market forward, but operators also need to have a clear strategy to limit extreme usage, Omnitele says. "Broadband operators are faced with entirely new technical and commercial challenges compared to 2G. They need to move the business forward but at the same time must limit extreme usage that degrades services or requires disproportional network investments," says Senior Consultant for Omnitele, Pal Zarandy.

Omnitele advocates that detailed techno-economic business models must be developed to tackle new broadband challenges effectively. In 2G it has been relatively easy for operators to estimate voice CAPEX and related costs, while mobile broadband services require much tighter links between the technical and commercial aspects of the business. Omnitele says that this approach is needed to make sure that profitability can be sustained.

The findings, as well as a guide to taking on new mobile broadband challenges, are presented in Omnitele's latest White Paper titled "Mobile Broadband – ensuring sustainable profitability" available for download at www.omnitele.fi

Tribold selected as Telekom Austria’s centralized product catalog platform

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Telekom Austria has chosen Tribold to provide its centralized product catalog and management capability, a move that will centralize the disparate product catalogs currently in place at the communications services provider.  The new platform will allow for the creation of new products and services across product lines and feature configurable products and add-ons to allow Telekom Austria's marketing team to create customised service offerings.  The centralized product catalog will ensure operational savings and efficiencies and reduce the time to market for new services, says Tribold.

Tribold's Product Portfolio Manager suite will integrate fully into Telekom Austria's BSS/OSS applications, providing a single, comprehensive view of product information across Telekom Austria's service offerings and automating the process of product management end-to-end.

Helmut Leopold, managing director, Platform and Technology Management, Telekom Austria, commented: "A centralized catalog is essential in effective product management in the increasingly competitive world of communications.  Frequent and rapid new product introduction is central to retaining a competitive advantage, acquiring new customers and retaining existing ones.  The disparate nature of our existing product related information in different BSS/OSS systems was clearly having an impact on our ability to deliver new services quickly and cost-effectively.  Centralized product catalog plays one of the cornerstone roles in the transformation of our comprehensive BSS/OSS landscape." 

Mario Huterer, director, Marketing Wholesale and Platform Management, Telekom Austria, said:  "We undertook a thorough evaluation of the product management solutions and Tribold was better than other competing options in almost all of our evaluation criteria. This centralized product catalog gives us the possibility to structure our marketed products out of a very much reduced number of streamlined 'basic' products and to drastically optimise our production efficiency.  I'm happy that we've got a mature product life cycle management solution that will meet our immediate needs and support us in creating and capturing quickly new market opportunities."

Simon Muderack, COO of Tribold, added: "Communication service providers across the globe are recognizing that an integrated centralized product catalog is the foundation upon which to build effective and efficient product management.  Without a single view of product data across the business, a CSP is going to find that its competitors are bringing new, valuable services to market more quickly and, through that, offering improved products to existing subscribers and winning new customers.  We look forward to continuing to work with Telekom Austria to deliver substantial and quantifiable benefits in the areas of time to market and cost to market."

VoIP opportunities – Changing attitudes – mobile operators’ perception of mobile VoIP

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The advent of VoIP services accessible via a GPRS/3G/HSDPA or Wi-fi link originally caused consternation within the cellular industry and amongst certain European operators in particular. Now it's apparent that mobile operators have begun to view mobile VoIP as something which they can co-opt rather than a disruptive technology which threatens their existing revenue streams. Many operators are taking measures to ensure customer loyalty in the face of suppos-edly 'free' mobile calls offered by VoIP. By Tony Dennis

 

Rely on small business VoIP for your telecommunication needs.

The UK has provided a classic example of a clash between a VoIP newcomer, Truphone and an established operator, T-Mobile, over interconnections between their respective networks. Effectively T-Mobile was refusing to enable Truphone subscribers using VoIP over dual mode handsets to connect to its cellular subscribers.

In July 2007, Truphone gained an advantage in this dispute with an injunction forcing T-Mobile UK to interconnect with Truphone. As things stand currently, a Truphone spokesman told Mobile Europe that, "The injunction remains in force and both parties have agreed not to bring matters to trial pending the matter being considered by Ofcom (the UK comms watchdog) as a complaint/dispute." This result has been viewed as a victory for the pure-play mobile VoIP suppliers in general including others besides Truphone such as Vyke.

Skypephone
Subsequently operators' attitudes to the whole issue of mobile VoIP have softened considerably – especially after the launch of the Skypephone by 3. Guy Middleton, 3's UK spokesman, commented, "Our 3 Skypephone shows what can be achieved in a mobile environment without termination regimes.  We've had to create that environment to make it possible." He claimed, "'Most operators have sought to block internet-calling services, especially on handsets with Wi-fi capabilities." This is a reference to Vodafone and Orange who removed crucial VoIP software from Nokia handsets they supplied directly to customers. Middleton continued, "3's view is very different. We see it as a means to offer our customers powerful internet communications on their mobiles and have found a way of building it into our business model."

3 believes that the threat from mobile VoIP calls being made over Wi-fi – sometimes known as wVoIP – has been exaggerated. Middleton pointed out that, "Most attempts at mobilising VoIP are based around Wi-fi. Yet the dream of universal cheap or even free Wi-fi access hasn't materialised and even when cost is ignored Wi-fi cannot compete with the reach of a 3G network. The 3 Skypephone has all of the benefits of a 3G voice connection into the network and the utility of the internet to connect to other Skype users." Significantly, Skypephone users can make free voice calls to others on the Skype network but other facilities are missing. There's no free IM [instant messaging] using the Skyephone.

However, the Skypephone changed the whole landscape for many VoIP suppliers. "Interest in mobile VoIP is really growing," Christina Sundman, CEO with Challenger Mobile, revealed. She claims that her phone had been busy ever since,3,announced its Skype deal. Sundaman argues that mobile operators have two main drivers for investigating mobile VoIP – attack and defence. On the defence side, just like any other valued added service, mobile operators don't want to get left behind if their competitors start to offer mobile VoIP. So offering mobile VoIP is seen as yet another way to retain existing customers. "It's a war out there," Christina Sundman says.

Attack and defence
Of course, mobile VoIP can also be viewed as a weapon with which to attack rival operators. Sundman claims that VoIP has even become part of European operators' push into new and emerging markets. The biggest advantage is that it enables operators to obtain revenue where they don't even have a GSM or 3G licence.  Subscribers can use the Wi-fi capability of the dual mode handsets to place a call over the Net. Sundman describes this facility as being the equivalent of offering a 'virtual SIM card'. Operators don't even need to have their own IP networks to offer this facility since Challenger Mobile can host the service for them. At the time of writing, Sundman wasn't able to reveal which MVNO in the UK is already a Challenger Mobile customer because the operator hadn't finished testing. However, she hinted that this is just one of many potential customers in Europe.
3 is, of course, a pure-play mobile operator but as, Shirish Andhare, a vp for marketing with Sylantro observed, "In Europe, there are plenty of incumbent operators who have both fixed and mobile assets." One of whom, Swisscom, is already a Sylantro customer. He strongly believes that operators are looking at mobile VoIP to obtain market advantage. "They like to stay ahead of the curve," Andhare said.

The business customer
The key to success with mobile VoIP is to target business customers, in Andhare's view. "VoIP has up until now being targeted at the residential market." He believes that operators are presently taking a view that the mobile handset has become the de facto business telephone of choice. So fixed/mobile operators are looking at ways of extending ways they can offer VoIP to existing customers even if to a certain degree it means cannibalising aspects of their existing business.
One of the reasons why business users haven't been too interested in VoIP is that it has previously been sold on its monetary benefits and more specifically on total cost of ownership. "The typical business mobile warrior isn't so much worried by cost but is interested in mobile VoIP because of the convenience," Andhare said. He feels that VoIP is just the start of the trend towards IP and that businesses will want to integrate a whole range of 'value added services' besides just voice.
He argues that Business users also want to replace the traditional 'blackphone' – the desktop extension handset with a mobile handset. As soon as an employee walks out of the building her or she loses the ability to transfer calls to a colleague's extension number and can no longer put callers on hold or patch them into a conference call.
 
Not all VoIP is free
An important distinction which Challenger's Christina Sundman wanted to make is the difference between mobile VoIP and free calls. She believes that while most operators won't charge for mobile VoIP calls between their own subscribers in their home territories, it presents the operator with a new revenue stream from international calls. While international calls using VoIP will prove cheaper for consumers, those are calls that otherwise might not have been made by the mobile network's own subscribers.  

Preventing roaming call leakage
Indeed, the key goal for Mobile2IP from Starhome is to help operators prevent leakage of roamers looking for VoIP alternatives to roaming phone costs.  Starhome's solution
Enables users to make & receive mobile calls over VoIP using their existing MSISDN (Mobile Station Integrated Services Digital Network) telephone number.

This has two key benefits. Firstly it allows users to route incoming calls either to a handset or to a laptop computer – both of which are running the Mobile2IP software.  Secondly, the fact that the mobile operator's branding appears on the subscribers' laptop screens only serves to strengthen customer relationships and operator brand identity, Starhome claims. "A converged [mobile and laptop] solution creates an adhesiveness between IP and mobile networks which prevents user churn to competitive technologies," commented Orly Nesher, a vp for marketing with Starhome.

Presence
Mobile2IP is based on SIP (Session Initiation Protocol) technology – otherwise known as 'Presence'. A key feature of A solution called Enrich  supplied by Colibria to the Mobilkom Austria Group (MAG) is a Presence  and an XDM server. The company claims this will be the bedrock on upon which innovative communication services and applications will be built. According to Matt Hooper, an executive vp for marketing with Colibria, "Those operators who have both mobile and fixed network assets have an opportunity to launch innovative service packages into the market which creatively use Presence, call routing based on availability and shared contact lists to provide a greatly enhanced user experience beyond traditional voice. When you combine VoIP with other services which use Presence such as mobile Instant Messaging (MIM), you get something potentially very compelling for users."

A strong case for offering business customers are truly 'converged' solution is made by CommuniGate. Its software aims to provide all users – no matter if they have an Apple Mac, PC or Linux computer with access to corporate data. The company's Pro Mobility Suite works with a variety of handsets, too. These range from Symbian and Windows Mobile based devices to the Sony Ericsson P900, M600 and W950 handsets; Nokia E-series devices; plus various Motorola, Palm and Treo wireless PDAs. Even the Apple iPhone can now join in. Pro provides the ability for business users to access their email messages, calendars, contacts, and tasks via a mobile operator or corporate network.

The very latest version of CommuniGate's client software, Pronto! 1.5, includes support for mobile VoIP. Crucially, it also providers operators with a content delivery client that works on any platform. So it is a tool content like ringtones, MP3s and videos to be supplied to virtually any device. "Pronto! enables carriers to sell that content, or provide it on an advertising-supported basis, and have an interface that can display all of it," claimed Jon Doyle vp of business development with CommuniGate. Perhaps the most important facet of CommuniGate's solution is that it is built around the use of browsers and Adobe's Flash product in particular. Any handset that can run Flash Lite (the mobile version of Flash) can access a CommuniGate server.

One way of viewing mobile VoIP is to see it as an integral part of the 'connected home'. According to Steve Shaw, associate vp for marketing with Kineto, mobile operators are no longer tying to contain or manage the use of VoIP across their networks. Instead, they're showing interest in what Kineto terms 'Homezone 2.0'. Homezones started with the likes of O2's Genion into Germany which was entirely cellular based. Home zones have subsequently gone through a Bluetoth and a Wi-fi stage and have now reached the femtocell which adds broadband and IP into the equation.
Kineto supplies UMA client software as well as the infrastructure/controller side that copes with any facility that GSM can offer including text messaging. Shaw says  most start out just offering cheap voice but as consumers move to high speed Wi-fi (802.11g) routers, operators are beginning to offer other facilities. Kineto's most successful customer to date is Orange which is offering a UMA based service – called Unik – in Spain, Poland and the UK. Another client is Telia with installations in Denmark and Sweden

An analysis of Unik's performance by France Telecom/Orange turned up some interesting results. The service – which started in 2005 – now has over 500,000 subscribers.  Research shows  that these subscribers are three times less likely to churn to another network on a contract than regular customers. The company alos calims that "the negative 'repricing' aspect effect for both fixed and mobile clients is compensated by additional revenues. Indeed, the fixed line ARPU has seen a significant uplift.

Overall, the perceived threat from the likes of Skype and Vonage has diminished. "Mobile operators have come to realise that putting a Skype client on a dual mode (cellular/wi-fi) handsets is only for hardcore customers who are determined to shave a few pennies off their voice traffic bills," says Steve Shaw.  "The pure-play mobile  operator has started  to utilise somebody else's broadband. Piggybacking while keeping the brand just like Skype and Vonage do, was not unheard off but is now becoming more mainstream."

Swedish 2.6GHz auction reflects ‘realistic’ spectrum value in Europe, says Analysys Mason

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The second European 2.6GHz spectrum auction concluded this week in Sweden and, with auctions coming up in other European countries, including the UK, Austria and the Netherlands, the outcome of the Swedish auction provides information on the price that operators will pay for 2.6GHz spectrum throughout Europe, says research specialist Analysys Mason.

The Swedish auction concluded at a price of EUR0.13/MHz/pop, with unpaired spectrum going for just below EUR0.04/MHz/pop and paired spectrum for EUR0.16/MHz/pop.

"Clearly prices fetched at the 2000/2001 European UMTS auctions, especially in the UK and Germany, are unlikely to be repeated. On the other hand, operators are reporting a rapid uptake of mobile broadband dongles, and new WiMAX players may be eager to enter the arena, suggesting that prices may still be substantial," says Bart-Jan Sweers, Strategy Consultant at Analysys Mason.

Despite being significantly below the UK and German UMTS auctions in 2000, the prices achived in the Swedish auction were considerably higher than the recent Norwegian 2.6GHz auction (EUR0.03/MHz/pop).

"Interestingly, the Swedish auction may be a more reliable indicator of prices in other upcoming European auctions than the Norwegian auction. The reason for this is that the competitive situation in Sweden, with four mobile players, is more representative of the situation in most European countries than the Norwegian two-player market," says Sweers. "Still, there are plenty of specifics in the Swedish situation that should lead to caution when using this auction result as a benchmark."

For example, taking the viewpoint of a bidder for paired spectrum in a country that adopts the CEPT band plan (2 ´ 70MHz of paired spectrum plus 50MHz of unpaired spectrum), two factors need to be taken into account when considering the Swedish outcome.

Firstly, just as in the Norwegian case, Sweden has a very low population density compared to most European countries. Consequently, it has a relatively low traffic density, leading to lower spectrum demand and hence lower prices. Secondly, later auctions may be affected by rising expectations in the industry regarding the uptake of mobile data and the anticipation of LTE approaching commercial availability.

Bidders for unpaired spectrum also need to factor out the effect of the PTS's decision to auction the unpaired spectrum in one block. This decreased the liquidity of the spectrum, and potentially decreased its value.

"Some European countries (e.g. the UK and the Netherlands) plan to deviate from the CEPT band plan by using a flexible band plan, in which the split between paired and unpaired spectrum is not fixed but varies according to demand at auction. In theory, this will enable a more efficient allocation of spectrum among FDD and TDD operators, and therefore could lower prices overall but at the same time could lead to higher prices for paired spectrum. The Swedish result suggests that competition between bidders for paired and unpaired spectrum will be minimal, given that the price fetched for unpaired spectrum was four times lower than for paired spectrum," says Sweers.

Having suggested that the Swedish auction may ultimately prove to be at the lower end of 2.6GHz auction prices, it is important to stress that operators should remain conservative in their assessments of spectrum value.

The upcoming 2.6GHz auctions are not the only way for operators to prepare for future demand, says Analysys Mason. Refarming of 2G spectrum, the digital dividend and general easing of spectrum restrictions improve the supply side of spectrum, while femtocells may well relieve any capacity issues. Operators should therefore carefully consider such alternative options when valuing 2.6GHz spectrum, it says.

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