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Monday, July 17, 2006

Spectrum neutrality, 3G and WiMAX

The GSMA appears to be more scared than I expected by possible future competition from WiMAX, especially in Europe. It's put out a press release (not yet up on its website as I write this) essentially saying "Technology Neutrality in 2.5GHz? No way!"

In a nutshell, the situation is this:

The European 2.5-2.69GHz band is designated for "3G extension". In other words, it's sort-of been pre-allocated for use for existing 3G services "for future expansion" with a specified technology. This has historically been the way wireless service have evolved. "You can use this bit of spectrum in this particular way".

However, there is an ongoing move towards being much less restrictive. Obviously, the 2.4GHz area used by most WiFi is a complete free-for-all, but has been a huge success in terms of usage & innovation, even if congestion occurs. But this is unlicensed spectrum - there's a parallel trend for regulators to move away from being technology-specific in licenced bands too. The UK's Ofcom has already adopted a position of saying "Spectrum should be technology neutral unless there's a very good reason otherwise", essentially putting the onus on the vendors & operators to work out ways to ensure their various different technologies play nicely with each other & don't interfere. The European Commision has been watching this keenly, as have various other national regulators.

Clearly, there are powerful influences at play in the 2.5GHz range. The existing mobile operators (ie the GSMA's membership) have the experience & scale to roll out existing 3G services in new spectrum in the future. New entrants would have a tough time, and it is likely that the vertically-oriented access+service model would continue to bumble along. But on the other hand, they've made a pretty poor collective job of doing cool & useful stuff with existing 3G spectrum.

As an alternative, backed by Intel, Motorola and others, WiMAX (and assorted other wireless broadband alternatives) are looking hungrily at 2.5GHz, which represents the best chance for fairly-harmonised global wireless broadband spectrum. And which would level the playing field of established cellular operators vs. new entrants. Many of which are more likely to adopt the philosophies of the IP/fixed broadband in terms of service definition and pricing, thereby having a knock-on impact on the "competitiveness" of rival services in the existing 3G bands.

The GSMA is taking the angle that "standardisation is necesssary for decent scale economies", amusingly overlooking the fact that usage 2.5GHz outside Europe is likely to be pretty standardised on WiMAX anyway. I particularly love the patronising line "The GSMA also fears that developing nations will be the hardest hit by the fragmentation of spectrum usage" and that if "the price of a low-end 3G phone increases by $30, the effect will be severe"

Really? I would have thought that decent competition between technologies would have the impact of pressuring rapacious patent-holders to price their IPR at non-monopolistic prices. And that if we encourage more business models & value chains than the traditional mobile operators, we stand a decent chance of properly harnessing the benefits of Moore's Law in the mobile domain?

Mind you of course, as the GSMA believes that 2.5GHz "must be reserved for the IMT2000 family of technologies" that seems to imply it's quite OK for it to be used for CDMA EV-DO as an alternative to UMTS. You listening, Sprint and KDDI? The GSMA is happy for you to bid for 2.5GHz alongside Voda, Orange et al and the WiMAX guys.....


Anonymous said...

Hi Dean,

Look at even the most pessimistic predictions of fixed-to-mobile traffic (voice and data) over the next 5-10 years. There is a massive shortfall of spectrum, even factoring in the 2.6GHz band. If a 3G operator bids for 2.6GHz spectrum, you can bet your boots they will have a very sound plan to build and deliver capacity using that spectrum to the hilt.

Look at WiMAX: their own industry forecasts predict 7 million users by 2010. That's seven million for the WHOLE WORLD. Then, try & tell me that those users will create a business case for infrastructure rollout at 2.6GHz. Or, that devices will be at a price point making WiMAX accessable to the masses. Nope, and nope.

OFCOM is insane to believe that competition among technologies will deliver more benefit than competition among operators. WiMAX is a 10-year old solution looking for a problem, it was cutting-edge back in the day but with HSDPA, it is just another choice that isn't materially faster or more spectrum-efficient, and has none of the scale economies. Last year in Vienna a VP from a major Korean WiBRO vendor told us the Korean WiBRO networks deliver around 1MBPs, need cells every block in dense urban, and those cells use 20 watt PA's and weigh as much as a Coke machine. If it looks, sounds and smells like HSDPA, WTF is the point in perpetuating the lie that WiMAX is a silver bullet? The EU/ITU still believes the Intel lie that it will be a factor of 10 more cost-effective to deliver mobile data/voice to underdeveloped regions with WiMAX. Intel hope for a foothold in 2.6GHz using - no other word for it - lies like this. They are pushing to be mandated as the Emergency Services technology of choice in the US, requiring the federal govt to effectively subsidise WiMAX buildout.

The WiMAX emperor has no clothes (well, no more so than the IPWireless Mayor, but that's another tehcnology in a barrel with shoulder straps), and with HSDPA coming soon to sub-1GHz spectrum near you, the only way to go is the 3G path. Word on the conference beat is that the CDG/CDMA crowd see the writing on the wall (look at new BTS orders by technology: the trend is stark), and want to have sound roadmaps leading to UMTS/WCDMA/HSDPA over the next 5 years. A move to combine 3GPP & 3GPP2 is afoot, and you can bet your vintage StarTAC that WCDMA will win out.

Dean Bubley said...

Some fair points Mr Anonymous, but you're also being a bit disingenuous in not predicting what WiMAX is likely to evolve into over the next 5-10 years, but talking about it as it is now.

I can't remember what the sales of GSM handsets were in Year 4 after their introduction, but I suspect that 7m isn't too bad in comparison.

To be honest, I think what Ofcom (and other regulators) really want is competition between business models. Unfortunately, competition between operators using the same cellular technology does not deliver this, so perhaps it is easier to achieve with different technologies.

Ideally, there should be some wireless providers offering vertically-integrated services, others offering wireless IP pipes for 3rd-party services, others combining fixed & mobile & broadcast in innovative ways. There should also be a way of delivering "owned" or "leased" private wireless services rather than relying on operators - ie equivalent to private mobile radio or WiFi. Some of the ideas around MVNOs and low-power GSM are getting close to this, but we're not there yet.

The problem is that the conventional cellular market is pretty monochrome at present, and is also layered with anachronistic detritus of the last 20 years of legacy (like the SIM).

It isn't obvious to me whether the answer is a clean piece of paper, or continued evolution.

Generally, heterogeneity between technologies is a good thing - whether in energy (fossil fuel, renewables, nuclear), broadcast (cable, satellite, terrestrial) or domestic heating. Granted, spectrum is a limited resource, but that's no reason to hand incumbents what is essentially an oligopoly in perpetuity.

Paul said...

Interesting post, Anonymous.

What I want to know is this: If "the only way to go is the 3G path", then why the heck are all the members of the WiMAX forum even bothering?

Tom Foale said...

Hi Anonymous
The point of auctioning spectrum is to use a market mechanism to allocate it to the operator able to make best use of it - by which is meant extract the most dollars from it. If the 3G operators thought they could do that from their current position (for after all, they have already sunk most of their costs and have their infrastructure in place) they wouldn't be bleating about it now. It doesn't actually matter what technologies are used, the competition is between business models - the best one should win. 5 operators with the same business model is not a serious competition.

You are wrong on several points. The spectral efficiency of HSDPA is 2.9b/s/Hz, whereas WiMAX's efficiency is 3.75b/s/Hz. Base-stations currently cost a fraction of UMTS, so the scale efficiencies are there already. We are delivering - today - 4Mbps symmetric to our customers and that will be increasing shortly. HSDPA from Vodafone is delivering 1.8Mbps peak to the end user, shared among all users on that channel.
HSDPA is part of UMTS release 5, which includes an upgrade of the uplink bearer to a maximum 384kbps rather than the previous 128kbps - suitable for consumers I guess...

Our antenna (both base-station and customer premises) are around the size of a burglar alarm - so we don't have heavy planning costs and delays. Our base-stations are small and light and take only 400W in total. Oh, and we don't have to pay royalties to Qualcomm. A WiMAX infrastructure can be built for a fraction of the cost of a UMTS network - so it has a business model advantage already.

On top of that, there is no QoS mechanism in HSDPA.

You are right on one thing - WiMAX has to offer advantages and deliver requirements that UMTS/HSDPA cannot if it is to succeed.

Fundamentally, UMTS is already obsolescent - and the GSMA knows it.

SolveForce said...
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