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Wireless Infrastructure Newsletter

LTE spectrum opens up round the world July 09 2015

France kicks off 700 MHz auction process, Singapore to create fourth MNO, Russia and Mexico to auction new spectrum

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LTE spectrum allocations are coming thick and fast as countries round the world seek to ensure they keep up in mobile and broadband services. This week has seen France kick off its 700 MHz auction process, hard on the heels of Germany; Singapore is setting aside 60 MHz of spectrum for a new entrant to boost 4G competition; while Russia and Mexico, two of the markets with high mobile growth potential, have announced new plans to issue more licences.

In France, the government has approved regulator Arcep's proposals for the auction of 700 MHz, or second digital dividend, spectrum later this year, marking the official start of the process. Bidders will need to submit their applications during the third quarter and the auction will take place in Q4, with a precise timeline to be announced.

The government confirmed that the reserve price for a 5 MHz block of paired spectrum will be €416m, so if all 30 MHz of available airwaves are sold, a total of €2.5bn will boost treasury coffers. The ministers also ratified Arcep's previously announced conditions regarding rural and railway coverage obligations and spectrum caps.

On the latter, players will be restricted to a maximum of three blocks, or 2 x 15 MHz, in the coveted 700 MHz band, and 2 x 50 MHz across all three sub-1 GHz bands (700 MHz, 800 MHz and 900 MHz).

Many operators believe the propagation qualities of the 700 MHz spectrum, currently used for broadcasting, will be well suited to low power machine-to-machine applications, for instance in smart cities, especially as they may have achieved sufficient coverage for conventional LTE data and voice applications with existing 800 MHz assets, and will turning to higher frequencies to add capacity for consumer services.

Paired with evolving, ultra-low power variants of LTE (LTE-MTC and 'Cellular IoT'), some MNOs say they will be able to use 700 MHz frequencies to compete with specialised smart city networks such as LoRa and Sigfox. These would-be standards are gaining ground in the absence of an M2M-optimised LTE option, but they have the disadvantage of operating mainly in licence-exempt spectrum (the 868 MHz band in Europe), which has security and reliability implications for mission critical functions.

Some of these low power wide area (LPWA) technologies are likely to be absorbed into the 3GPP standards in future - Sigfox, LoRa and Telensa have submissions to the 3GPP, and Huawei's Cellular IoT platform, supported by Vodafone, includes technology from its acquisition of LPWA chip pioneer Neul.

Halfway round the world in Singapore, there is also increasing focus on M2M and smart city services as the regulator, IDA, looks to usher a new operator into the market by creating a fourth mobile licence and setting aside spectrum for it.

To date two companies have expressed interest. One is OMGTel, which is a start-up but is partnering with public transport operator SMRT, with a view to majoring on services for travellers and smart city applications. The other is fiber-based ISP MyRepublic, which has been on an expansion drive, including a recent launch in Indonesia.

The regulator is proposing to set aside 60 MHz of spectrum, including 40 MHz below 1 GHz, for the fourth operator, but will only allow one new entrant, to avoid fragmentation. It may hold a special auction for the earmarked spectrum, with a lower reserve price than the main sale, which would effectively decide which new player should be allocated the licence. The reserve fee is reported to be around S$40m ($29.6m). The winner would then be required to achieve nationwide coverage with its own build-out (not roaming) by September 2018.

The plan is now open for public consultation until August 12, with critics saying that Singapore is too small to sustain four mobile operators profitably, pointing to the way that, in far larger countries like Germany, the number of MNOs has been reduced to three through consolidation. However, if a new entrant were to be heavily focused on emerging revenue streams like smart cities - an area in which Singapore is forging ahead rapidly - it might be possible to boost innovation without sparking a price war.

In Mexico, the regulator Ifetel has announced that, as part of its national spectrum plan, it will offer spectrum in the 2500 MHz-2690 MHz band from next year, following recommendations from the ITU and CITEL. It said in a statement: "This scheme has a sufficiently broad set of contiguous blocks of spectrum that allows the deployment of broadband technologies using the FDD-LTE or TDD-LTE methods."

AT&T, which recently acquired Iusacell and Nextel Mexico - and will gain a 41.3% stake in Sky Mexico through its DirecTV purchase - is already expanding mobile services across the border from the US and is positioning itself to be a major mobile and quad play challenger to the incumbent America Movil. The US giant recently approached Ifetel to request a 50 MHz block of spectrum in the 2.5 GHz band.

There have been years of fighting over this high capacity band, which has traditionally been allocated mainly for MMDS broadcast and fixed broadband services, though some of those operators had moved into WiMAX. In the fall of 2013, the government finally came to an agreement with existing licence holders in the band, with a plan to recover 190 MHz of spectrum to reassign for LTE. Nine of the 11 MMDS holders surrendered their licences, totalling 130 MHz, though the controllers of the other 60 MHz had their franchises renewed for 15 years.

In the final spectrum news of the week, Russia's regulator Roskomnadzor has announced an auction of 1.8 GHz spectrum starting on September 29. MNOs including MTS and Tele2 have already launched LTE services in this band in some regions, but the auction will enable them to expand their footprint, and other operators - potentially the other big three MNOs, Vimpelcom and MegaFon , to join the party in this increasingly popular and globalised 4G band.

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