Is it believable that new 700 MHz spectrum will avoid a mobile capacity crunch?

Is it believable that new 700 MHz spectrum will avoid a mobile capacity crunch?

At the 2012 World Radio Conference Europe, Africa, the Middle East and Northern Asia a resolution was passed calling for the 700 MHz band to be made available for mobile broadband. Ofcom believes this to be essential to avoid a mobile network ‘capacity crunch’ and said so in their press release in November 2012. (http://media.ofcom.org.uk/2012/11/16/ofcom-unveils-plans-to-avoid-mobile-capacity-crunch/) A final international decision will be taken at the next World Radio Conference in 2015 and Ofcom have signalled its intention for this spectrum to be available in the UK for mobile broadband sometime after 2018. This all seems pretty dry stuff. But buried in this arcane world of international radio spectrum conference are some important national issues.

This Ofcom announcement begs at least three quite separate questions that are worth exploring. The first is why Ofcom are “intervening” in the market place…something they normally see as in inappropriate. Why not leave the international choice of how spectrum is used to the private sector?  The second is the extent to which their choice to back mobile broadband pre-empts a proper public broadcasting versus mobile debate. The third is whether it is “the solution” to avoid a mobile network “capacity crunch”.

The first is a question of Ofcom’s role. International alignment of spectrum is very hard even for governments and regulators. It is almost impossible for a private company to achieve. When alignment is achieved it adds considerable value to that spectrum. So Ofcom is a player and if they adopted their more usual approach of leaving things to market forces it would considerably diminish the value of UK spectrum. So Ofcom are to be applauded for throwing off their mantra of leaving things to market forces and getting stuck in with a good old fashioned interventionalist approach.  The only real concern is why they are not applying a whole lot more effort to the European and international harmonisation of spectrum. For example the 500 MHz of ex-MOD spectrum the government  is proposing to release will be absolutely worthless if none of it is internationally harmonised for commercially viable applications.

In response to the second question I have a mild unease that the broadcasting community has been fast asleep these past 5 years. There has not been a really well informed public debate on what sits beyond the current TV and Sound Radio terrestrial broadcast technologies and whether new spectrum will be needed to bring those new possibilities to market. For example what will be the future of sound broadcasting after DAB…a technology that is currently crawling its way up a cul-de-sac. We are accepting too readily that all future broadcasting will happen over the Internet. Is this really true for digital TV? The counter-argument against this current assumption is that if more users could be encouraged to take their video via broadcast TV channels the less clogged-up the mobile broadband networks  would be. Certainly LTE is less efficient handling video streams and chronically inefficient all the while smartphones do not come with multi-casting (which most do not). So maybe the 700 MHz band might be better used re-inventing Digital Terrestrial TV with a next generation technology that combines high definition with mobility. This in combination with ever greater storage on the smartphone could be a more efficient distribution of video than 4G or 5G?  Maybe this is right, maybe it is wrong. My point is that the world has too readily fallen into “group-think” and this debate has not taken place.

The third question is whether this is  “the solution” to avoid a mobile network capacity crunch? This was the headline of an Ofcom press release on November 16th 2012 and would come as great comfort to the Government if this was all that was needed.

There are two pieces of thoughtful work that Ofcom have drawn from in arriving at their sweeping conclusion. The first is an Infrastructure Report update. According to this study the average mobile user used 245MB of data in June 2012 and the average fixed-line user a monthly consumption of 23GB. So today a fixed-line user is consuming 94 time more data than a mobile user. This number is helpful in assessing Ofcom’s projection about future growth in mobile data consumption. Ofcom suggest that in 2030 a mobile user will be consuming 80 times more data than in 2012. In other words they believe a mobile user in 17 years time will be consuming less data than a fixed user is consuming today. These numbers backs the Ofcom assumption of a factor of 80 insofar that it is clearly not over stating the case.

However there is an element of self-fulfilment in these projections. If Ofcom policies are focussed on the country creating a surplus of mobile network capacity (supply moving ahead of demand) prices will fall, consumption will rise and the spare capacity consumed. If the Ofcom policies results-in a scarcity of network capacity (supply is not keeping up with demand) then one of two undesirable states will emerge. Either prices will rise to choke off demand or prices do not rise and chronic congestion results. Both are bad. So supply side policies are particularly critical to the UK’s mobile broadband future and Ofcom is not an impartial prophet of what the future might bring but a player here as well… with the powers to shape a future of network capacity “plenty” or “scarcity”.

The second piece of work Ofcom are drawing on is some complex modelling from a very credible research company Real Wireless. But the claim Real Wireless make in their study is that the new spectrum will only “defer” the capacity crunch and not solves it. This intuitively feels more directionally correct when we look in a little more detail at exactly how much spectrum at 700 MHz may be released. The plan is to release spectrum between 694 MHz and 790 MHz ie slightly under 96 MHz when guard bands are taken into account. Today there is around 500 MHz of spectrum under the control of the various UK mobile operators. Thus the new spectrum at 700 MHz will add around 20% to the total spectrum usable for broadband mobile services.

This is a useful step in the right direction but falling well short of meeting the 80 fold (8000%) traffic growth that Ofcom has predicted as being needed by 2030. I am sure Ofcom themselves have done the sums but the point is still worth making in terms of those in Ofcom on the research side getting the financial and other backing to be actively exploring with industry where the other 7880% is to come from to keep the UK on the road to a successful digital economy between now and 2030.

 

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