Rapport Pa Consulting

Communications, media and entertainment

The impact of technical and service neutrality A report for the Ministerie van Economische Zaken

13 October 2009

DISCLAIMER: This report and the research and investigations necessary to compile it were

carried out by PA in accordance with instructions from the Netherlands Ministry of Economic

Affairs and were prepared exclusively for its sole benefit and use. There are a number of

assumptions which PA relied on to come to its conclusions and therefore this report should

not be used as a substitute for your own research and due diligence. It should not be

considered to comprehensively cover all potential options and outcomes. It does not

constitute a recommendation by PA for any particular product, service or outcome and

should not be used by to make any purchase and/or investment decisions. You should

always make your own enquiries and undertake your own adequate due diligence.

Accordingly, PA does not assume any responsibility or liability for this report and requests

that you do not use information contained in this report without PA's written consent.

© PA Knowledge Limited 2009

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Executive summary

The Netherlands Ministry of Economic Affairs is interested in the impact of the introduction of

technology and service neutrality in the spectrum bands 900, 1800, 2100 and 3500 MHz. It

has asked PA to consider the following questions.

• Are current licensees technically able and is it for them commercially viable to use the

benefits that technology neutral licenses provide until the date the licenses expire?

Only the mobile operators are able to take advantage of technology neutrality within the

timescales constrained by the expiry of the licences. Technically the options available to

mobile operators are implementing UMTS in 900 MHz and LTE in 900, 1800 and 2100 MHz.

It is not likely that Worldmax will have an alternative to mobile WiMAX 802.16e at 3500 MHz

in the timeframes defined by the licences.

Not all of the available technical options make commercial sense. Only LTE in 2100 MHz

(when it does not duplicate the roll out of an LTE network at 2600 MHz) is likely to generate a

payback for investors within the timeframes of the licence. However operators may opt to

begin roll out of UMTS at 900 MHz, complementing their existing networks at 2100 MHz, in

the expectation that the outcome of the reauction of 900 MHz spectrum will not radically alter

their spectrum holdings.

• Would this situation change if T-Mobile handed back some of its licenses in the near

future?

Under the current spectrum allocations, MEZA is proposing T-Mobile can obtain only 2 x 5

MHz of 2600 MHz spectrum. Under these circumstances, T-Mobile would be more likely to

take advantage of technology neutrality and use its 2100 MHz spectrum to support LTE.

In theory, T-Mobile could follow KPN and return some of the spectrum it obtained through

playing a role in the consolidation of the Netherlands communications market. If T-Mobile

were to hand back the 2100 MHz spectrum it obtained along with its purchase of Orange, the

option of taking advantage of technology neutrality would be less attractive. T-Mobile would

instead have access to a greater quantity (2 x 12.5 MHz) of 2600 MHz spectrum. It would

therefore be less likely to take advantage of technology neutrality, and more likely to reserve

2100 MHz for UMTS and introduce LTE at 2600 MHz.

• What would be the impact on the competitive dynamics in the market of making the

existing licenses technology and service neutral?

The introduction of technology and service neutrality is unlikely to have a significant impact

on competitive dynamics in the market. The mobile operators have natural advantages from

the frequencies they have been allocated, and the subscriber bases, networks and

organizations they have developed over the past two decades. Technology and service

neutrality will expand the options available to the incumbent mobile operators, and may

therefore improve their competitive position with regard to a new entrant or Worldmax. But

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this additional competitive benefit is likely to be negligible in comparison with the advantages

they already enjoy.

At present Worldmax is not considered a challenger to the incumbent mobile operators, but it

is likely to face considerable competitive pressures as its service and pricing strategy

converges with the mobile operators. The natural advantages held by the mobile operators,

rather than the introduction of technology and service neutrality, will make it difficult for

Worldmax to develop its position in the market. Similarly new entrants using the 2600 MHz

band alone will find it difficult to compete with the mobile operators.

• What are the technical and economic differences between the 3500 MHz band and the

2600 MHz band?

When comparing the 2600 and 3500 MHz bands against technical and economic criteria, the

2600 MHz spectrum is more attractive to operators than 3500 MHz spectrum. 2600 MHz is at

the heart of the future development of wireless communications as a result of its assignment

as an extension band for 3GPP. It also offers more attractive propagation characteristics

compared with 3500 MHz, and enables lower cost rollout as a result. Historical valuations of

spectrum show that the market values 2600 MHz between four and 400 times higher than

3500 MHz spectrum. 3500 MHz may enable wideband services using the 80 MHz of

spectrum held by Worldmax, but services using this type of spectrum are likely to have niche

appeal, within the timeframes of Worldmax’s licence.

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Contents

Executive summary 1

1 Background to the questions 4

1.1 Moves towards technology and service neutrality 4

1.2 Spectrum allocation in the Netherlands 6

1.3 Technology options available to operators 7

2 Responses to the Ministry’s questions 12

2.1 Realising the benefits of technology neutrality 12

2.2 Impact of handing back spectrum holdings 15

2.3 Impact on competition of making licences technology and service neutral 16

2.4 Comparing the 2600 MHz with the 3500 MHz band 20

Appendix A: Frequency allocations from national fre quency register 26

A.1 900 MHz frequency allocations 26




Appendix B: About PA Consulting Group 31

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1 Background to the questions

This section presents background information to the issues that MEZA is considering, in

particular:

• Moves towards technology and service neutrality

• Spectrum allocation in the Netherlands

• Technologies available when considering the issues raised by MEZA.

1.1 Moves towards technology and service neutrality

This section defines technology and service neutrality, and shows how the regulatory environment is

changing to embrace these concepts.

1.1.1 What is technology and service neutrality?

The European Union recognises that spectrum is a valuable resource for its member states. The

Wireless Access Policy for Electronic Communications Networks (WAPECS) concept, developed by

the Radio Spectrum Policy Group (RSPG) of the European Commission, provides the framework to

support the European Union’s policy goal of using spectrum resources to promote competitiveness.

The WAPECS concept promotes the use of spectrum to enable any technology to deliver all services,

subject to technical co-existence requirements tailored to each band, and is defined as:

“… a framework for the provision of electronic communications services within a set of frequency

bands to be identified and agreed between European Union Member States in which a range of

electronic communications networks and electronic communications services may be offered on a

technology and service neutral basis, provided that certain technical requirements to avoid

interference are met, to ensure the effective and efficient use of the spectrum, and the authorisation

conditions do not distort competition.” 1

WAPECS signals a change in approach to regulation of spectrum, from 'command and control' to

using the market to device the most appropriate usage. This approach requires removal of technology

and usage constraints, and enables spectrum to migrate towards applications that place the highest

value on its usage. This approach enables regulators to offer “technology- and service-neutral

authorisations to let spectrum users choose the best technologies and services to apply in a frequency

band”. 2

1 “Opinion on Wireless Access Policy for Electronic Communications Networks (WAPECS)”, Radio Spectrum Policy Group,

23/11/2005, p.2 2 “Proposal for a Directive of the European Parliament and of the Council amending Directives 2002/21/EC on a common

regulatory framework for electronic communications networks and services, 2002/19/EC on access to, and interconnection of,

electronic communications networks and services, and 2002/20/EC on the authorisation of electronic communications

networks and services”, European Commission, COM(2007) 697, 13/11/2007, p. 17

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1.1.2 The response in the Netherlands

The Ministry of Economic Affairs (Ministerie van Economische Zaken, MEZA) is interested in

understanding the impact of changing licence conditions on the Netherlands’ mobile market. At

present the licences awarded to operators in the Netherlands specify the services that can be

provided in the spectrum band, and the technology that can be used to support the service. The

Netherlands’ Frequency Plan also specifies the use of each band. MEZA now aims to increase

emphasis on market-based mechanisms for the assignment of spectrum, in particular service

neutrality and technology neutrality – subject to specific band considerations and local circumstances

As a consequence MEZA intends to give current licensees of GSM (900MHz and 1800MHz), UMTS

(2100 MHz) and 3500 MHz3 spectrum the opportunity to make their licenses more flexible in that no

specific technology or service is prescribed. The Ministry needs to know whether it is likely that the

licensees can actually use their spectrum for new services and technologies in such a way that it

distorts competition between incumbent licensees and new entrants, taking into account the limited

duration of their current licenses.

The Ministry of Economic Affairs has already issued a report on the market effects of flexible

frequency policy. This report has been consulted by the Ministry of Economic Affairs and resulted in

the need to answer the following questions.

1. Are each of the current licensees of 900/ 1800/ 2100/ 3500 MHz spectrum (KPN, T-Mobile,

Vodafone and Worldmax), from the point of view that they are an average efficient undertaking,

technically able and is it for them commercially viable to use the benefits that technology neutral

licenses provide until the date the licenses expire?

2. KPN recently handed back some of its licenses to the Dutch State. It may be possible that T-

Mobile is also going to hand back some of its licenses in the near future. Would that have any

impact on the conclusions drawn in question 1?

3. Does making the existing licenses (900/ 1800/ 2100/ 3500 MHz) technology and service neutral,

taking into account the limited duration of their current licenses, result in a significant impact on

competition between existing licensees (of 900/ 1800/ 2100/ 3500 MHz spectrum) and between

existing licensees and new entrants in the 2600 MHz spectrum entrant?

4. Is the 3500 MHz band economically and technically comparable with the 2600 MHz band, from

the point of view of an average efficient undertaking (given the possibility to make their licenses

more flexible), taking into account the limited duration of the 3500 MHz licence?

This report summarises our view of the issues raised by these questions.

3 References to Worldmax's operations in the 3500 MHz band refer to its 80 MHz block. More general references to the 3500

MHz band refer to the 200 MHz block available between 3400 - 3600 MHz.

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1.2 Spectrum allocation in the Netherlands

To understand the impact of technical and service neutrality on existing licensees it is important to

understand who currently holds which spectrum and what future spectrum will become available. This

section details which operators hold spectrum and how it is currently used, and also discusses future

spectrum allocations.

1.2.1 Current spectrum allocations

There are currently four operators in the Netherlands licensed to offer public wireless services. The

Netherlands’ three mobile operators, KPN, T-Mobile and Vodafone, hold licences in the 900, 1800 and

2100 MHz frequency bands. The mobile operators use these frequencies to support GSM and UMTS

networks. Worldmax is the only operator that holds spectrum in the 3500M Hz frequency band, which

it uses to support its WiMAX 802.16e network in central Amsterdam.

The wireless communications market in the Netherlands has recently undergone consolidation, with

two mobile licence holders withdrawing from the market:

• KPN acquired Telfort in June 2005

• T-Mobile acquired Orange’s spectrum and subscriber base in October 2007.

In August 2009 KPN handed back the 1800MHz and 2100MHz spectrum frequencies it gained along

with the Telfort acquisition. Table 1 summarises the spectrum allocations currently held by the four

public wireless operators (Appendix A includes full details of the spectrum allocations).

Allocations MHz KPN T-Mobile Vodafone Worldmax

900 MHz 2 x 12.4 2 x 10 2 x 11.4 -

1800 MHz 2 x 20 2 x 31.8 2 x 5.2 -

Paired 2 x 14.8 2 x 20 2 x 14.6 - 2100 MHz

Unpaired 1 x 5 1 x 10 1 x 5.4

3500 MHz - - - 1 x 80

Table 1: Current spectrum allocations at 900, 1800, 2100 and 3500 MHz

Source: PA Consulting Group analysis of National Frequency Register of the Netherlands

The licences held by the mobile operators expire at different times:

• The 900 and 1800 MHz spectrum licences expire on 26/02/20134

• The 2100 MHz spectrum licences expire on 01/01/20175.

4 MEZA is currently preparing a decision regarding the extension of the 1800 MHz and eGSM licences. A decision regarding

the extension of these licences has not yet been made. However for the purposes of this assessment, we have assumed they

will not be renewed, and will expire on 26/ 02/ 2013 along with the 900 MHz spectrum. 5 Source: National Frequency Register. Please see Appendix A.

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The licence for 3500 MHz spectrum held by Worldmax expires on 16/12/2015.

1.2.2 Future spectrum allocations

There is 190 MHz of spectrum available at 2600 MHz. MEZA intends to auction this spectrum in 2010.

In line with the Europe-wide specifications on harmonisation in the 2600 MHz band, the Netherlands

plans to auction this spectrum with block size assignments of 5 MHz and duplex spacing of 120 MHz

for Frequency Division Duplex (FDD) spectrum.6 Figure 1 shows the spectrum blocks in this band and

the positioning of FDD and Time Division Duplex (TDD) spectrum.

1 2 3 4 5 6 7 8 910

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38PMSE

Radio Astronomy

FDD TDD FDD

2500 MHz

2690 MHz

Figure 1: Spectrum available at 2600 MHz 7

Source: Radio Spectrum Committee

MEZA aims to allocate spectrum in a way that can, if required, reflect demand for a larger number of

TDD and consequently reduce the allocation of FDD blocks. In an attempt to encourage competition,

MEZA is proposing a cap of:

• 55 MHz on the amount of spectrum that the three incumbent mobile operators can acquire in total.

This total is made up of 20 MHz for KPN, 25 MHz for Vodafone, and 10 MHz for T-Mobile

• 40 MHz on the total amount of spectrum that any other operator can acquire.

As a result at least three new entrants will be able to acquire spectrum in the 2600 MHz band in

addition to the incumbent mobile operators.

Digital dividend spectrum in the frequency range 470-862 MHz will become available in some

European countries from 2012, but at the time of writing the timescale for its availability in the

Netherlands is uncertain.

1.3 Technology options available to operators

Spectrum owners have a variety of options for technologies that may be deployed in the 900, 1800,

2100 and 3500MHz frequency bands if technology neutrality was applied to the licenses. This section

6 "Final Draft Commission Decision on the harmonisation of the 2500-2690 MHz frequency band for terrestrial systems capable

of providing electronic communications services in the Community", RSCOM08-02, Radio Spectrum Committee, 02/03/2008 7 The auction of the 2600 MHz band will also include a sub-band at 2010- 2019.7 MHz. This band could be used for LTE TDD,

but PA Consulting Group is not aware of technology developments focusing on this area. This report focuses on the 2500 -

2690 MHz band as a result.

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summarises the technologies and the timeframes in which the equipment will be available for the two

major technology standards groups, 3GPP and WiMAX.

1.3.1 3GPP standards group

The 3GPP family includes:

• GSM, first deployed in the Netherlands in 1992

• UMTS technology, launched in the Netherlands in 2004

• Long Term Evolution (LTE), generally considered as 4G technology.8

Table 2 shows the availability of UMTS network equipment and devices at different frequencies.

Frequency Band Network Availability Device Availability

900 MHz Now Now

1800 MHz Not planned Not planned

2100 MHz Now Now



Table 2: Timetable for availability of UMTS network equipment and handsets

Source: PA Consulting Group analysis based on industry sources

UMTS networks are currently in operation in most countries around the world at 2100 MHz. UMTS

networks at 900MHz in Europe are have only recently become a possibility as moves towards

technology neutrality have opened up this option for operators. Consequently there are fewer

examples of deployment, most of which are in Finland and Estonia, but also in Hungary. Handsets

supporting UMTS at 900 MHz are available now, but the commercial services available at present

support USB data dongles only, extending the reach of UMTS data services outside of the major

conurbations.

Major manufacturers are not planning developing UMTS at 1800MHz. This option may become

available at some point in the future, but its availability is likely to be limited and subject to local

demand.

PA Consulting Group is not aware of any plans to develop network infrastructure and deploy UMTS at

2600 MHz9 . Instead, operators are intending to use this spectrum to deploy the successor technology

8 The ITU has extended the definition of IMT-2000 to include E-UTRAN (otherwise known as LTE systems) as well as WiMAX

802.16e in 3GPP Release 8, as specified in ITU recommendation ITU-R M.1457-8. 3GPP Release 10 is expected to include

the respective evolutions of LTE and WiMAX, LTE-Advanced and WiMAX 802.16m. These evolutions are expected to meet the

requirements of ITU-Advanced. E-UTRAN/ LTE uses OFDMA technology rather than the CDMA Direct Spread used by UMTS. 9 ETSI has recently produced technical specifications for UMTS at 2600 MHz, with both FDD and TDD profiles. However the

development of a profile does not automatically lead to development of and demand for infrastructure.

9

UMTS, known as LTE. LTE has the advantage that it can be deployed in a variety of channel

bandwidths from 1.4 MHz to 20 MHz, whereas UMTS supports only a 5 MHz channel bandwidth. As a

result LTE is more adaptable, and is likely to be available in 1800 MHz frequencies as shown in Table

3.

Frequency Band Network Availability Handset Availability

900 MHz 2010 2010/11

1800 MHz 2010 2010/11

2100 MHz 2010 2010/11

2600 MHz 2010 2010/11


Table 3: Timetable for availability of LTE network e quipment and handsets

Source: PA Consulting Group analysis based on industry source

Mobile operators in Europe are gearing up to deploy LTE in the 2600 MHz band as it comes available

across Europe. Where it is already available, in Sweden and Norway, operators and vendors are

working together to deploy in other bands as well. Telenor and Tele2 are cooperating to deploy LTE at

2600 MHz, and will also combine their 900 MHz spectrum assets to support LTE. Other mobile

operators are also planning to use the 1800 MHz spectrum to deploy LTE.

The W-CDMA variant of UMTS generally used in Europe requires paired FDD spectrum, i.e. uplink

and downlink channels separated by a specified frequency. There are limited deployments of variants

of UMTS that use unpaired TDD spectrum. Examples include:

• T-Mobile in the Czech Republic, which deployed a TD-CDMA network to address the residential

internet access market, using 1900 MHz spectrum.

• China Mobile, which is rolling out a network using the TD-SCDMA standard in the 1800MHz and

2000 MHz bands.

LTE equipment using TDD spectrum is very likely to be available in significant volumes as a result of

demand from network operators in China requiring an evolution path for TD-SCDMA, but availability is

likely to be later than LTE in FDD.10

1.3.2 WiMAX technology

WiMAX has emerged as a viable technology and is now incorporated into the IMT-2000 family

alongside more established technologies such as UMTS – ITU World Radiocommunication

Conference-07 (WRC-07) saw mobile WiMAX included in the IMT-2000 family as the sixth technology

10 China Mobile, which is rolling out a TD-SCDMA network, is cooperating on LTE tests with Verizon and Vodafone. Global

Mobile Suppliers Association Information Paper claims that LTE TDD is “promising to be commercially available 2009-10”, but

PA expects it be at least 2 years later than LTE FDD.

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standard. WiMAX uses an air interface based on Orthogonal Frequency-Division Multiple Access

(OFDMA) technology, in common with LTE technology.

WiMAX has been taken-up for manufacture and implementation by vendors and operators around the

world, initially for fixed access. The two most common standards are:

• 802.16d, which supports only fixed services, and is available for use with both paired and unpaired

spectrum

• 802.16e, extending capability into mobile services, but is often used to support fixed services

because it offers better performance than 802.16d. It is not compatible with 802.16d.

There are numerous deployments of WiMAX in the 3500 MHz band; indeed, Worldmax operates a

WiMAX 802.16e network in its spectrum allocation.

WiMAX equipment is at present not available in any of the bands owned by the mobile operators, and

WiMAX equipment manufacturers are not planning to develop equipment compatible with these

bands. This is unlikely to change as the mobile operators are likely to pursue the 3GPP development

path that supports the transition to LTE.11 T-Mobile and Vodafone have all either begun or are

testing LTE in critical markets adjacent to the Netherlands:

• T-Mobile Germany is trialling LTE in 2009 and anticipates deployment in 2011. T-Mobile Austria

has launched a 60 site pilot LTE network and anticipates service launch in 2011 – 12.

• Vodafone Germany is testing LTE in digital dividend spectrum and anticipates deployment from

2011. 12

KPN has also been quoted as deciding that WiMAX is not appropriate for the market in the

Netherlands following trials and proposing to roll out LTE in 2011. 13

The opportunity for WiMAX in these bands will therefore be limited. At present only TDD versions of

WiMAX 802.16e are available for 3500 MHz and for 2600 MHz as well as a profile at 2300 MHz that is

used in South Korea. However the WiMAX Forum has defined FDD profiles for WiMAX 802.16e and

vendors are considering developing FDD versions.

Table 4 summarises network and device availability for WiMAX 802.16e technology.



11 KPN, T-Mobile and Vodafone are all members of the Next Generation Mobile Network Alliance (NGMN), established to

define operators’ requirements for next generation technology. NGMN claims it does not hold a preference for a specific

technology, but accepts “as a working assumption that the 3GPP LTE project will be one of the most likely vehicles for the

delivery of NGMN radio design”. “Next Generation Mobile Networks Beyond HSPA and EVDO”, NGMN Alliance, 05/12/2006, p.

68. All are also members of the GSM Association. 12 Global Mobile Suppliers Association Information Paper, 26/08/2009, counts these commitments among 39 worldwide 13 “KPN schiet wimax af en kiest voor lte,” http://tweakers.net/nieuws/62830/kpn-schiet-wimax-af-en-kiest-voor-lte.html,

01/10/2009

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2600 MHz Now Now

3500 MHz Now Now

Table 4 : Timetable for availability of WiMAX 802.16 e network equipment and devices


1.3.3 Alternative technologies

There are alternative technologies that may be used in these spectrum bands. However it is unlikely

that an alternative to either 3GPP or WiMAX will be deployed in Europe in the foreseeable future. The

alternative offered by CDMA and Flash-OFDM has been integrated into LTE as Qualcomm has

abandoned development of Ultra Wide Band (UWB) technology and opted to support LTE. Next-

generation PHS technology that is being deployed by Willcom in Japan in the 2500 MHz band is

unlikely to feature outside of Japan at the least and east Asia at its most extensive. The remainder of

this report considers only 3GPP and WiMAX technologies as viable options for operators in the

Netherlands.

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2 Responses to the Ministry’s questions

The section presents PA Consulting Group’s responses to the questions that the Ministry has

asked us to consider.

2.1 Realising the benefits of technology neutrality

The Ministry is interested in whether the four holders of 900MHz, 1800MHz, 2100 MHz and 3500 MHz

spectrum licences:

• Are technically able to use the benefits that technology neutral licence provider until the date the

licences expire

• Would find it commercially viable to use the benefits of technology neutrality in their spectrum

holdings until the date the licenses expire.

2.1.1 Technology neutrality opens options to the mo bile operators only

The impact of introducing technology neutrality would vary between the mobile network operators

KPN, Vodafone and T-Mobile, and the wireless local loop operator Worldmax. The mobile operators

are technically able to use the benefits of technology neutrality in their spectrum holdings. The options

available to the mobile operators are:

• For existing 900Mhz spectrum holders to deploy UMTS and LTE in that range

• For existing 1800Mhz spectrum holders to deploy LTE in that range

• For existing 2100 MHz spectrum holders to deploy LTE in that range.14

This suggests that implementing technology neutrality provides technically feasible options for KPN, T-

Mobile and Vodafone to make use of new technologies in the spectrum ranges they hold.

Worldmax is unlikely to find a suitable alternative technology to WiMAX 802.16e in the 3500 MHz

spectrum frequencies within the timeframes of its licence. The 3400 – 3800 MHz band has been

identified as an expansion band for LTE. But there vendors have not announced concrete plans to

address this requirement. This option will not be available to Worldmax before 2016.

Table 5 shows the technology options available to licence holders in the spectrum bands they hold,

and the timing of availability of network equipment and multimode handsets that support service in that

band.

14 The reference to E-UTRAN in 3GPP Release 8 extends the scope of IMT-2000 to include LTE systems. LTE-Advanced is

expected to meet the requirements of ITU-Advanced, as is WiMAX 802.16m, and they therefore require technology neutrality

to be implemented in 2100 MHz spectrum bands.

13

UMTS LTE WiMAX

Network Devices Network Devices Network Devices

900MHz Now Now 2010+ 2010/11+ Not planned Not planned

1800MHz Not planned Not planned 2010+ 2010/11+ Not planned Not planned

2100MHz Now Now 2010+ 2010/11+ Not planned Not planned

3500MHz Not planned Not planned Not planned Not planned Now Now

Table 5 : Assumed availability of network equipment and handsets for different technologies


2.1.2 Only 2100 MHz spectrum offers a commercially viable opportunity for taking advantage of technology neutrality

The test of commercial viability is whether an appropriate return on the investment can be achieved in

timeframes that are limited by the expiry of the spectrum licences. Under specific circumstances the

2100 MHz band offers a commercially viable opportunity for operators to take advantage of technology

neutrality. However it does not follow that operators will follow this path alone. Instead operators may

pursue refarming of 900 MHz spectrum to deploy UMTS despite the licences expiring prior to payback

being achieved.

Table 6 shows the four possible options that the mobile operators have for taking advantage of

technology neutrality, and shows the indicative payback period for each option.

Spectrum Licence expiry Technology Likely launch Indicative payback

period

26/ 02/ 2013 UMTS 2011+ 5 years 900 MHz

26/ 02/ 2013 LTE 2011+ 5 years

1800 MHz 26/ 02/ 2013 LTE 2011+ 10 years

2100 MHz 01/ 01/ 2017 LTE 2011+ 5 - 10 years

Table 6 : Commercial viability of taking advantage of technology neutrality

Source: PA Consulting Group analysis

The 2100 MHz spectrum is superficially the most attractive option for operators as they would have a

five year window of opportunity prior to the expiry of the 2100 MHz licence to deploy an alternative

technology. However, if an operator decides to implement LTE at 2600 MHz spectrum as well, the

payback period for LTE extends to 10 years, exceeding the licence expiry date. Using 2100 MHz to

support LTE spectrum fulfils a similar role to 2600 MHz spectrum, offering high capacity to manage

traffic in urban areas, and therefore duplicates resources to address the same market.

There are also strong incentives for the operators to try to retain UMTS in the 2100 MHz band. UMTS

offers operators an upgrade path that supports the delivery of high speed services to end users. HSPA

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upgrades to UMTS can maintain increases in data rates, up to a claimed 84 Mbps and possibly

beyond.15 Although this is less than the 300 Mbps claimed for LTE, HSPA offers operators a tried and

stable technology. UMTS may therefore offer sufficient data rates for the mass market, and operators

will be keen to keep using their investment in UMTS networks in the 2100 MHz band.

However if an operator does not secure an allocation of 2600 GHz spectrum and chooses to deploy

LTE in 2100 MHz alone, then the business case is more positive. With LTE users generating revenue

only from the 2100 MHz network, payback is reduced to five years. This may be an appropriate

conclusion for KPN alone, if it is able to convert its leading position in the current market into an

equally strong position in the LTE market. Conversely T-Mobile and Vodafone may find it difficult to

justify investing in LTE at 2100 MHz before the expiry of the licence.

Technology neutrality may offer the opportunity for using alternatives in the 1800 MHz band, but the

structure of spectrum holdings makes it unattractive for deployment. Each operator has multiple

spectrum assets of 2 x 2.2 MHz. LTE is a potential option as it can operate in channel bandwidths

from 1.4 MHz. However the relatively small spectrum available means that operators will not be able

to offer the high data rates that contiguous spectrum blocks at 2100 GHz or 2600 GHz would enable.

With fixed traffic overheads, and no gain from diverse frequency scheduling, operators would be

realising speeds closer to 10 Mbps from LTE at 1800 MHz. Operators are therefore unlikely to take

advantage of technology liberalisation in the 1800 MHz band unless the spectrum assets are made

contiguous.

2.1.3 Operators may opt to use technology neutralit y to roll out UMTS in the 900 MHz band sooner rather than later

The prospect of re-auction of 900 MHz spectrum may encourage operators to wait until these issues

are resolved before making investment decisions. However operators may balance the possibility of

losing spectrum with the opportunity offered by deploying high speed data services in 900 MHz, and

decide the risk is worth taking.

Operators may decide that the short time remaining of the 900 and 1800 MHz licences are not

obstacles to deployment of alternatives:

• 900 MHz spectrum is a complement to both the existing UMTS network at 2100 MHz, and a LTE

deployment at 2600 GHz. It enables operators to extend coverage into less dense suburban and

rural areas

• Lower frequencies require fewer base stations, reducing the investment burden

• The 900 MHz spectrum may be more valuable to the incumbent operators than to a new entrant to

the mobile market

15 “Technical overview and performance of HSPA and WiMAX: How the performance of HSPA and Mobile WiMAX compare in

theory and in practice”, Ericsson June 2009, p. 4

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• The incumbents may therefore expect to win back most if not all of this spectrum at auction, and

post-auction spectrum trading provides the opportunity for the operators to address any

complications in spectrum allocation arising from the auction.

UMTS may be more attractive for implementation at other frequencies than LTE. Demand for LTE is

likely to be limited until at least 2014 to laptop users with USB dongles or datacards, or with LTE

chipsets built into their devices. Integration of LTE into handsets and its take-up and use by the mass

market will take time. An independent market forecast expects that, by 2015, only 8% of Western

Europe mobile subscribers will use LTE services.16 This type of user may be more likely to want to

use the higher speed services enabled by the spectrum available in 2600 MHz spectrum, and more

likely to be concentrated in urban areas. In addition, UMTS can be built out using the existing core

network and services, and therefore minimises the investment requirement, should operators be

looking for ways to reduce expenditure.

However some operators may be reluctant to refarm 900 MHz spectrum:

• Vodafone has a relatively small quantity (2 x 5.2 MHz) of 1800 MHz spectrum. Losing 10 MHz of

900 MHz spectrum to UMTS may cause congestion in the Vodafone network by limiting the GSM

capacity available to users. However the switch in usage from GSM 900 and 1800 MHz networks

to UMTS 2100 MHz networks may reduce the relevance of this issue

• Congestion may also be an issue for KPN. It claims average usage of its GSM network as a

percentage of total capacity is 95%.17 KPN also has an extensive GSM infrastructure, with over

4,500 base stations in operation. Reducing the quantity of GSM spectrum may affect its quality of

service.

T-Mobile, with its smaller subscriber base, less extensive investment in 900 MHz GSM equipment,

and significant quantity of 1800 MHz spectrum, may therefore be the most likely candidate for taking

advantage of technology neutrality in the 900 MHz band.

2.2 Impact of handing back spectrum holdings

KPN has recently handed back some of the spectrum holdings it acquired along with Telfort. T-Mobile

also played a role in consolidating the mobile market in the Netherlands, acquiring Orange in October

2007. T-Mobile acquired the following spectrum assets along with Orange:

• 2 x 5Mhz of spectrum in the 900Mhz band

• 2 x 15Mhz spectrum in the 1800Mhz band

• 2 x 10Mhz of paired and 1 x 5MHz unpaired spectrum in the 2100 MHz band.

It is possible that T-Mobile may also decide to hand back some the spectrum assets it obtained along

with Orange. This would not affect the technical ability of T-Mobile to take advantage of technology

neutrality, but it may have an impact on the commercial attractiveness of technology neutrality.

16 “Global Mobile Broadband: Market Potential for 3G LTE”, Analysis, 20/01/2008, p. 17 KPN Annual Report 2008, p. 34

16

MEZA has decided to implement a spectrum cap on the incumbent mobile operators, and to vary that

cap according to the amount of spectrum held by the operators. Table 7 summarises the spectrum

available to T-Mobile under different scenarios.

Allocations MHz With Orange spectrum Without Orange spectrum

Paired 2 x 20 2 x 10 2100 MHz

Unpaired 1 x 10 1 x 5

2600 MHz 2 x 5 MHz 2 x 12.5 MHz

Table 7: T-Mobile's spectrum holdings at 2100 and 2 600 MHz under different scenarios

Source: PA Consulting Group analysis

Retaining Orange's spectrum may make T-Mobile more likely to take advantage of technology

neutrality, as it may make the option of using 2100 MHz for LTE more attractive. Refarming half of its

2100 MHz spectrum may not inhibit T-Mobile’s ability to offer wideband mobile data services to users

in the Netherlands, as the Orange spectrum holdings are not contiguous to T-Mobile’s own spectrum

holdings. Therefore the combined spectrum holdings may not confer any advantage in terms of the

bandwidth available to a wideband services. T-Mobile could still use 2 x 10 MHz for UMTS, and use

the additional 2 x 10 MHz block for LTE. Conversely the attractiveness of the 2600MHz spectrum may

decrease, with the narrow allocation of spectrum for LTE inhibiting T-Mobile’s ability to take advantage

of the benefits of LTE by offering wideband services.

In theory T-Mobile may hand back Orange's 2100 MHz spectrum. This may make using the 2600 MHz

for implementing LTE more attractive. Handing back Orange's 2100 MHz spectrum may reduce the

amount of 2100 MHz spectrum held by T-Mobile by half. It would then have the smallest holding of

2100 MHz spectrum of all the operators, and may be more reluctant to take advantage of technology

neutrality by using 2100 MHz spectrum to deploy LTE. T-Mobile may be more likely to use the 2600

MHz spectrum for LTE as its spectrum allocation would increase to 2 x 12.5 MHz. This may make the

2600 MHz band more attractive for implementing LTE as T-Mobile could use this spectrum to offer

wideband services.

2.3 Impact on competition of making licences technology and service neutral

The Ministry has asked whether making the existing licences (900/1800/2100/3500 MHz) technology

and service neutral, taking into account the limited duration of their current licenses, would result in a

significant impact on competition between existing licensees (of 900/1800/2100/3500 MHz spectrum)

and between existing licensees and new entrants in the 2600 MHz spectrum entrant. This section

examines the possible impacts of making licences technology and service neutral, in particular:

• The impact on Worldmax

• The impact on the ability of new entrants to establish their operations

• The impact on the dynamic between the incumbent mobile operators.

17

2.3.1 Worldmax may see its ability to differentiate eroded

At present Worldmax service is limited to the Amsterdam areas and is limited to offering fixed wireless

access. The company states its proposition is to offer users:

“on-the-go broadband internet and access to data-intensive applications, like online multimedia, video

downloads, mobile TV, and streaming media.” 18

At present download speeds range from 512kbps to 12Mbps and there is no download volume limit.

The company offers services using USB dongles enabling broadband wireless access for laptop

users, and fixed services for PC users using a desktop wireless modem.

Worldmax is therefore taking up a distinctive position in the market, offering users a flexible service

that enables them to enjoy the attributes of their fixed broadband service - high speeds, unlimited

downloads – along with the convenience of a wireless service. The introduction of service neutral

licences would open the mobile market to Worldmax. The company is not well positioned to taking

advantage of this opportunity in the short term as:

• It does not have the network coverage to compete with the mobile operators, and is unlikely to

generate the coverage required to establish a mobile service using 3500 MHz

• The device range for 3500 MHz networks is limited to data dongles.

However Worldmax and other new entrants using WiMAX may benefit from the backing of Intel,

sponsoring the development of the market for embedded WiMAX devices to increase the “attach rate”

of its chipsets. This would create an installed base of users interested in mobile broadband access

using WiMAX. Worldmax may therefore be able to take advantage of service neutrality to develop its

niche as a broadband internet access service provider.

In comparison the mobile operators’ service offerings are consistently more expensive, as Figure 2

shows. Mobile operators' services also come with download limits. KPN for example presents its

service as offering speeds up to 7.2 Mbps but prices the services according to the data volume

downloads, for example 400MB for €16.81, 1 GB for €33.61, 2.5 GB for €50.42, and unlimited

volumes for €67.23. T-Mobile and Vodafone have similar download limits on their services.

18 http://www.worldmax.nl/en/what_we_do/products__services/

18

0

5

10

15

20

25

30

0.51

20.

768 1

1.5 2

3.6 5

7.2 12

Service speed Mbps

Mon

thly

pric

e pe

r Mbp

s €

WorldMaxT-MobileVodafone

Figure 2 : Comparison of monthly cost per Mbps of d ownload speed between Worldmax, T-Mobile and

Vodafone

Source: Operators, PA Consulting Group analysis

Of course, the mobile operators can provide a national and indeed international service for users,

whereas Worldmax's service is at present only available in central Amsterdam. However this pricing

strategy suggests mobile operators’ current preference to avoid flat rate, unlimited download services

that are positioned as equivalent to fixed line services. Such a pricing approach would be likely to

result in far greater network utilisation and could cause congestion, having an adverse impact on their

core services relating to voice calls.

The implementation of technology neutrality would open up the 900 and 1800 MHz bands to UMTS

and/ or LTE. This may release additional capacity to support mobile data services and lead to mobile

operators reassessing their pricing strategy. The result may be that Worldmax’s ability to differentiate

on price and service is eroded as the mobile operators reduce prices and remove caps on data

volumes. This challenge to Worldmax would have to be considered against the potential benefits to

users of far wider availability of this type of pricing model.

However the timeframes for these changes are uncertain. The incumbent mobile operators may be

likely to resist what could be considered potential commoditization of data services for as long as

possible rather than promote it to address what is a weak competitive challenge. Worldmax’s position

may become more difficult to sustain, but this is likely to be the result of its position as a small operator

using a niche technology competing with three major mobile operators, rather than the introduction of

technology and service neutrality.

19

2.3.2 Incumbent operators may be able to respond to new entrants’ attempts to disrupt the market

The auction of 2600 MHz spectrum offers at least three new entrants the opportunity to challenge the

incumbent mobile operators. It is not clear who these new entrants might be or what they would offer,

but a new entrant may want to use a disruptive business model to establish itself, for example:

• Content-driven operator, using the spectrum to develop a content-driven quadplay, promoting TV

or other content as the core of its service

• “Pure” wireless broadband operators, in evidence in the Norwegian and Swedish auctions,

targeting both fixed and mobile users with data-oriented wireless services

• Technical investors, aiming to secure spectrum to increase the “attach rate” of their own IP or

products. For example Qualcomm is using spectrum assets in the US to develop its own mobile TV

network with the aim of increasing the penetration of its technology.

The introduction of technology neutrality may enable the incumbent operators to address the

challenge offered by new entrants. Incumbents would have an advantage over new entrants in having

900 and 1800 MHz spectrum to increase capacity and extend coverage for high speed data services

using UMTS and/ or LTE. This may enable the mobile operators to respond through lower cost or

better value services.

New entrants face a significant challenge to establish their position in the market, but the introduction

of technology and service neutrality is unlikely to be the main cause of their difficulties. These issues

are unlikely to arise within the timeframes of the 900 and 1800 MHz licences, and even before the

expiry of the 2100 MHz licence. The incumbents are more likely to use their new spectrum holdings at

2600 MHz to offer services that address the challenge of disruptive business models. The natural

advantages conferred by the mobile operators' existing spectrum assets, subscribers, networks and

systems are likely to outweigh any benefits the mobile operators can realise from technology and

service neutrality.

2.3.3 Competition between the mobile incumbents is unlikely to be affected significantly

Technology and service neutrality is unlikely to change the competitive dynamics between the

incumbent mobile operators to any great extent. It is unlikely that the mobile operators will use access

to the fixed market to gain advantage. KPN already has a well developed fixed line infrastructure, and

the strategies of the Vodafone and T-Mobile do not indicate they are likely to use wireless networks to

address fixed customers:

• In similar markets to the Netherlands such as the UK or Austria, T-Mobile has not established a

fixed line equivalent service, instead relying on the additional benefits offered by mobility to attract

users. Only in countries where wireline networks are less developed has T-Mobile used wireless

networks to deliver fixed services with any success; for example T-Mobile’s 1900 MHz CDMA

network in the Czech Republic met unsatisfied demand for low cost internet access

20

• Where Vodafone is addressing the fixed line market in Europe it has used local loop unbundling (in

Spain or Italy) or wholesale DSL (in the UK) to connect to customers.

In addition, the Netherlands is relatively well-served by wireline networks, including fibre access at low

prices, which offer a more appropriate method of delivering high speed broadband services than

wireless networks.

The options opened up by technology neutrality are available to all the incumbent mobile operators. All

are likely to implement UMTS and LTE, rather than using technology neutrality to diverge from 3GPP.

All hold spectrum in 900, 1800 and 2100 MHz and most likely in 2600 MHz as well. The operators hold

different quantities of spectrum, which may allow an operator to gain an edge by using its additional

capacity to offer wideband services its competitors cannot support. An operator may therefore choose

to differentiate itself in the market by using technology neutrality to position itself as the Netherlands’

premium wireless broadband network service provider. However with the mobile market approaching

maturity, these differences are unlikely to have a significant and long-lasting effect on the competitive

dynamic among the mobile operators.

2.4 Comparing the 2600 MHz with the 3500 MHz band

The Ministry has asked whether the 3500 MHz band is economically and technically comparable with

the 2600 MHz band, from the point of view of an average efficient undertaking (given the possibility to

make their licenses more flexible), taking into account the limited duration of the 3500 MHz licence.

This section compares different aspects of the bands, including:

• Their technical characteristics

• The value placed on them by markets and the drivers behind the valuations.

2.4.1 Technical comparison

PA Consulting Group has compared the 2600 MHz and 3500 MHz bands by assessing:

• The quantity of spectrum available

• The cell size required for networks using these bands

• The technology options available to operators.

There are clear differences in the quantity of spectrum available, the cell size required for networks

and the technology options available to operators in the 2600 MHz and 3500 MHz bands. More

spectrum is available at 2600 MHz, and it includes both FDD and TDD spectrum. Cell sizes at 3500

MHz are 40% smaller than cell sizes at 2600 MHz. Whereas WiMAX is the only technology option for

holders of 3500 MHz spectrum, LTE is also available at 2600 MHz. The 2600 MHz band is clearly

more attractive, and this may well drive up the price of the spectrum.

Table 8 compares the technical characteristics of the 2600 and 3500 MHz bands.

21

2600 MHz 3500 MHz

Spectrum available

FDD spectrum Maximum 140 MHz -

TDD spectrum Minimum 50 MHz 80 MHz at present in the

Netherlands

Total spectrum available 190 MHz 80 MHz at present in the

Netherlands

Up to 200MHz depending on other

users eg radar, amateur radio

Cell area km2 for a WiMAX network in different envir onments

Dense urban 1.12 0.65

Urban 2.32 1.36

Suburban 3.43 2.01

Rural 9.75 5.72

Technology availability

WiMAX 802.16e Network equipment - 1H 2010

Devices - 2H 2010 – 2H 2011

Now

LTE Network equipment - 1H 2010

Devices - 2H 2010 – 2H 2011

No plans

Table 8 : Comparison of technical aspects of 2600 a nd 3500 MHz spectrum

Source: PA Consulting Group

2.4.2 Markets in Scandinavia recognise the differen t commercial attractiveness of 2600 and 3500 MHz

Of all of the European countries, only Norway and Sweden have carried out auctions of 2600 MHz

spectrum. These two countries have also carried out auctions of spectrum at or close to 3500 MHz

that has also been awarded on a technology and service neutral basis. The auctions were carried out

over the four years from 2004, during which the degree of interest in telecoms investments increased

significantly after the low following the dotcom bubble to the peak of the asset bubble in 2007. Table 9

shows details of the spectrum assets auctioned in these countries, all of which were licences of 15

years duration.

Frequency Year Quantity MHz Value €m Value per MHz per

year €

22

Frequency Year Quantity MHz Value €m Value per MHz per

year €

Norway

3500 MHz19 2004 173 5.9 2,277

2600 MHz 2007 190 27.3 9,585

Sweden

3600 – 3800 MHz20 2007 16021 0.4 361

2600 MHz 2008 190 204.9 71,898

Table 9 : Spectrum auction results in Norway and Swe den

Source: Post-och Telestyrelsen (PTS), Post-og Teletilsynet (PT)

The verdict of investors in both of these economies is that the 2600 MHz spectrum is considerably

more valuable than 3500 MHz spectrum. There is a considerable range in the difference in value, from

almost 400 times in Sweden to just over four times in Norway, which reflects the competitive intensity

of the auctions in the different countries. This range reflects the views of investors in both countries

regarding the significant difference in value of the spectrum assets.

This view is based on a number of factors, most of which are relevant to the market in the

Netherlands:

• The 2600 MHz frequency’s position as an expansion area for the 3GPP path

• The impact on costs of the different propagation characteristics of the frequencies.

2.4.3 The 2600 MHz band benefits from its integrati on into the 3GPP path

The 2600 MHz band has been designated as the next spectrum resource for operators following the

3GPP development path.22 The ECC Frequency Plan (ECC/DEC/(05)05) designated 2600 MHz as the

19 These licences are described by the NPT as "technology neutral, tradable and cover[ing] terrestrial services on Norwegian

territory with the exception of Svalbard, Jan Mayen Island and Norwegian dependencies. There are no restrictions regarding

mobility or portability." The licences were allocated on a regional basis with the country divided into six regions, using duplex

blocks of 3.5 MHz bandwidth. The maximum number of blocks allocated to a single operator was 8, enabling the operator to

use at most 2 x 28 MHz spectrum in a region.

http://www.npt.no/portal/page/portal/PG_NPT_NO_EN/PAG_NPT_EN_HOME/PAG_RESOURCE_TEXT?p_d_i=-

121&p_d_c=&p_d_v=44552 20 Sweden’s regulator Post- og Telesyrelsen awarded regional licences for fixed wireless access services using 3500 MHz

spectrum in 2003. This spectrum was awarded using a beauty contest method, and therefore no value can be placed on the

spectrum. 21 The 3600 – 3800 MHz spectrum was made available in regional licences of four lots of 40MHz, made up of two lots of FDD

(2x20MHz) and two lots of TDD (40MHz) spectrum. One FDD lot was purchased in total, but there was only sporadic interest in

the other lots. The licences are "technology and service-neutral and do not contain any rollout obligations."

http://www.pts.se/en-gb/Industry/Radio/Autctions/BWA-Licenses-36-38-GHz/

23

expansion band for IMT-2000, allocating the majority of spectrum to FDD in 5 MHz bands separated

by 50 MHz reserved for either FDD downlink or TDD.23 This makes the 2600 MHz band ideal for

implementation of FDD technology to support high speed broadband wireless services.

The 2600 MHz band is part of the 3GPP mobile ecosystem that has emerged worldwide as first GSM

and then UMTS developed a dominant position among competing mobile technologies. This

ecosystem supports an integrated, standardised international market for mobile equipment and

services. Efficient sub-strata concentrating on technology development, manufacturing and

distribution, and sales and service to consumers, have developed. The size of the 3GPP ecosystem

enables consumers to benefit from lower producer prices passed on by vendors and operators. This

has driven down the price of mobile hardware and services.

The standardised 3GPP radio services enable a common set of interfaces that support a broad range

of service and application providers, targeting consumers with niche applications and services that

address specific requirements. The ubiquity and uniformity of GSM mobile technology enabled its

speed of development and spread around the world, and the consequent ‘network effect’ that

accelerated take-up and increased the value of the service to consumers. The integration of the 2600

MHz band with the 3GPP ecosystem is likely to enable operators and consumers to derive similar

benefits from the additional frequencies. The subsequent inclusion of WiMAX in IMT-2000, adding the

most prominent TDD technology to the range of technologies specified for use at 2600 MHz, provides

further impetus to the commercial attractiveness of the band.

The position of 3500 MHz is however less positive. The 3400-3600 MHz band was identified as the

preferred frequency for fixed wireless access in 199824 and many European regulators have assigned

it on that basis. Take-up of fixed wireless services has been disappointing; the growth of DSL and

regulated access to unbundled local loops has removed the rationale behind building an alternative

access infrastructure for fixed services in many countries. The 3500 MHz band has not developed the

type of ecosystem that will benefit the 2600 MHz band. It is likely to continue to suffer in comparison

from a more limited range of network infrastructure vendors and, crucially, devices and handsets that

will prove attractive to users.

The 2600 MHz and 3500 MHz bands therefore operate in significantly different commercial

environments. The range of equipment providers, service providers, applications and devices will

reinforce a virtuous circle that ensures that 2600 MHz is more attractive economically than 3500 MHz.

22 The 3rd Generation Partnership Project (3GPP) includes standards bodies from around the world, working together to

produce technical specifications for 3G mobile networks initially, and now expanded to include 2G and 4G systems. 23 IMT-2000, as defined by ITU Rec. M.1457-6, originally supported three different access technologies – FDMA, TDMA, and

CDMA – and five radio interfaces. WRC-07 saw WiMAX technology included in the IMT-2000 family as the sixth technology

standard. WiMAX uses an air interface based on Orthogonal Frequency-Division Multiple Access (OFDMA) technology, in

common with 3GPP’s Long Term Evolution (LTE) technology, the successor to UMTS. 24 ERC/ REC13-04, ERC/ REC 14-03, ERC Report 25

24

2.4.4 A network at 3500 MHz could cost around 30% m ore than a network at 2600 MHz

WiMAX is currently the only technology that is available for implementation in both 2600 MHz and

3500 MHz bands. The cost of the radio components used in networks at these bands does not differ

significantly. However relatively favourable propagation characteristics mean that area of a 2600 MHz

cell is around 70% larger than the area of a 3500 MHz cell. The number of base stations is the

dominant factor in the relative costs of network implementations. Table 2 includes the cell area of

WiMAX networks at 2600 MHz and 3500 MHz.

This economic impact of this difference in cell sizes is considerable. For a small roll out covering over

1,500km2 with area types ranging from dense urban to rural, the number of additional cells required

for coverage almost doubles from 350 to 600. The cost of implementing and managing a WiMAX

network could be 30% higher over 10 years for a 3500 MHz implementation compared with a 2600

MHz implementation. Figure 3 breaks down the indicative costs by area, and shows that the main

driver of the increase is operating costs, in particular site rental for the towers and rooftop sites

required to support a larger number of base stations.

0

50

100

150

200

250

2.6 GHz 3.5 GHz

Tot

al c

ost €

m

CapexOpex

Figure 3 : Indicative costs over 10 years of implem enting and managing WiMAX access networks at 2600

and 3500 MHz for a small network covering varying l and use types 25

Source: PA Consulting Group

2.4.5 At 3500 MHz, larger contiguous spectrum offer s greater capacity for wideband services

There are advantages associated with using 3500 MHz spectrum. Worldmax’s current spectrum

allocation of 80 MHz is likely to be up to four times the contiguous spectrum allocation of an FDD

25 Capital expenditure includes access infrastructure – base stations, tower sites and backhaul. Operating expenditure includes

costs required to operate access networks.

25

network at 2600 MHz (2x20 MHz), and twice the maximum allocation of spectrum for a new entrant

(40 MHz). This may enable Worldmax to offer users wideband services that take advantage of this

additional capacity. Streaming High Definition television, for example, would require speeds of up to 6

Mbps. Take-up of this kind of service is likely to be limited, at least in the short term. However

wideband services do offer a niche that holders of 3500 MHz could exploit.

26

Appendix A: Frequency allocations from national frequency register

A.1 900 MHz frequency allocations Lower

Frequency

(MHz)

Upper

Frequency

(MHz)

Bandwidth

(MHz)

Allocation Application Expiry

880.1 880.9 0.8 T-Mobile

Netherlands BV*

GSM 26/02/2013

880.9 882.3 1.4 T-Mobile

Netherlands BV

GSM 26/02/2013

882.3 886.5 4.2 T-Mobile

Netherlands BV*

GSM 26/02/2013

886.5 890.1 3.6 T-Mobile

Netherlands BV

GSM 26/02/2013

890.1 894.1 4 KPN Mobiel

Nederland

GSM 26/02/2013

894.1 903.1 9 Vodafone GSM 26/02/2013

903.1 911.5 8.4 KPN Mobiel

Nederland

GSM 26/02/2013

911.5 913.9 2.4 Vodafone GSM 26/02/2013

925.1 925.9 0.8 T-Mobile

Netherlands BV*

GSM 26/02/2013

925.9 927.3 1.4 T-Mobile

Netherlands BV

GSM 26/02/2013

927.3 931.5 4.2 T-Mobile

Netherlands BV*

GSM 26/02/2013

931.5 935.1 3.6 T-Mobile

Netherlands BV

GSM 26/02/2013

935.1 939.1 4 KPN Mobiel

Nederland

GSM 26/02/2013

939.1 948.1 9 Vodafone GSM 26/02/2013

948.1 956.5 8.4 KPN Mobiel GSM 26/02/2013

27

Lower

Frequency

(MHz)

Upper

Frequency

(MHz)

Bandwidth

(MHz)


Nederland

956.5 958.9 2.4 Vodafone GSM 26/02/2013

*Formerly property of Orange Nederland NV


Frequency

(MHz)

Upper

Frequency

(MHz)

Bandwidth

(MHz)


1710.1 1712.7 2.6 Vodafone GSM 1800 26/02/2013

1712.7 1715.1 2.4 KPN Mobiel

Nederland

GSM 1800 26/02/2013

1715.1 1717.7 2.6 T-Mobile

Netherlands BV

GSM 1800 26/02/2013

1717.7 1720.1 2.4 Telfort B.V. GSM 1800 26/02/2013

1720.1 1722.7 2.6 KPN Mobiel

Nederland

GSM 1800 26/02/2013

1722.7 1725.1 2.4 T-Mobile

Netherlands BV

GSM 1800 26/02/2013

1725.1 1730.1 5 KPN Mobiel

Nederland

GSM 1800 26/02/2013

1730.1 1735.1 5 T-Mobile

Netherlands BV

GSM 1800 26/02/2013

1735.1 1737.7 2.6 KPN Mobiel

Nederland

GSM 1800 26/02/2013

1737.7 1740.1 2.4 T-Mobile

Netherlands BV

GSM 1800 26/02/2013

1740.1 1755.1 15 T-Mobile

Netherlands BV*

GSM 1800 26/02/2013

1770.1 1775.1 5 KPN Mobiel

Nederland

GSM 1800 26/02/2013

1775.1 1777.7 2.6 Vodafone GSM 1800 26/02/2013

1777.7 1782.1 4.4 T-Mobile

Netherlands BV

GSM 1800 26/02/2013

28

Lower

Frequency

(MHz)

Upper

Frequency

(MHz)

Bandwidth

(MHz)


1782.1 1784.9 2.8 GSM 1800 26/02/2013

1805.1 1807.7 2.6 Vodafone GSM 1800 26/02/2013

1807.7 1810.1 2.4 KPN Mobiel

Nederland

GSM 1800 26/02/2013

1810.1 1812.7 2.6 T-Mobile

Netherlands BV

GSM 1800 26/02/2013

1812.7 1815.1 2.4 Telfort B.V. GSM 1800 26/02/2013

1815.1 1817.7 2.6 KPN Mobiel

Nederland

GSM 1800 26/02/2013

1817.7 1820.1 2.4 T-Mobile

Netherlands BV

GSM 1800 26/02/2013

1820.1 1825.1 5 KPN Mobiel

Nederland

GSM 1800 26/02/2013

1825.1 1830.1 5 T-Mobile

Netherlands BV

GSM 1800 26/02/2013

1830.1 1832.7 2.6 KPN Mobiel

Nederland

GSM 1800 26/02/2013

1832.7 1835.1 2.4 T-Mobile

Netherlands BV

GSM 1800 26/02/2013

1835.1 1850.1 15 T-Mobile

Netherlands BV*

GSM 1800 26/02/2013

1865.1 1870.1 5 KPN Mobiel

Nederland

GSM 1800 26/02/2013

1870.1 1872.7 2.6 Vodafone GSM 1800 26/02/2013

1872.7 1877.1 4.4 T-Mobile

Netherlands BV

GSM 1800 26/02/2013

1877.1 1877.5 0.4

1877.5 1879.9 2.4

*Formerly property of Orange Nederland NV

29

A.3 2100 MHz frequency allocations

A.3.1 TDD – Unpaired

Lower

Frequency

(MHz)

Upper

Frequency

(MHz)

Bandwidth

(MHz)


1904.9 1909.9 5 Orange Nederland

NV

IMT2000/UMTS 01/01/2017

1909.9 1914.9 5 KPN Mobiel

Nederland

IMT2000/UMTS 01/01/2017

1914.9 1920.3 5.4 Vodafone IMT2000/UMTS 01/01/2017

2010 2019.7 9.7 - IMT2000/UMTS 01/01/2017

2019.7 2024.7 5 T-Mobile

Netherlands B.V

IMT2000/UMTS 01/01/2017

A.3.2 FDD - Paired

Lower

Frequency

(MHz)

Upper

Frequency

(MHz)

Bandwidth

(MHz)



1934.9 1949.7 14.8 KPN Mobiel

Nederland

IMT2000/UMTS 01/01/2017


NV

IMT2000/UMTS 01/01/2017

1959.7 1969.7 10 Telfort B.V. IMT2000/UMTS 01/01/2017

1969.7 1979.7 10 T-Mobile

Netherlands B.V

IMT2000/UMTS 01/01/2017


2124.9 2139.7 14.8 KPN Mobiel

Nederland

IMT2000/UMTS 01/01/2017


NV

IMT2000/UMTS 01/01/2017

2149.7 2159.7 10 Telfort B.V. IMT2000/UMTS 01/01/2017

2159.7 2169.7 10 T-Mobile

Netherlands B.V

IMT2000/UMTS 01/01/2017

30


Frequency

(MHz)

Upper

Frequency

(MHz)

Bandwidth

(MHz)


3500 3580 80 Worldmax WLL 01/01/2016

31

Appendix B: About PA Consulting Group

PA Consulting Group is a leading management, systems and technology consulting firm,

operating worldwide in more than 35 countries.

We put together teams from many disciplines and backgrounds to tackle the most complex

problems facing our clients, working with leaders and their staff to turn around organisations

in the private and public sectors. Clients call on us when they want:

An innovative solution: counter-intuitive thinking and groundbreaking solutions

A highly responsive approach: we listen, and then we act decisively and quickly

Delivery of hard results: we get the job done, often trouble-shooting where previous

initiatives have failed.

We are an independent, employee-owned, global firm of 3,000 talented individuals, operating

from offices across the world, in Europe, North America, Middle East, Latin America, Asia

and Oceania. We have won numerous awards for delivering complex and highly innovative

assignments, run one of the most successful venture programmes in our industry, have

technology development capability that few firms can match, deep expertise across key

industries and government, and a unique breadth of skills from strategy to IT to HR to applied

technology.

This evaluation was undertaken by staff from PA’s telecommunications group, who work

regularly with well-known telecommunications operators, regulators and vendors worldwide.

PA has undertaken a large number of assignments for operators and regulators relating to

mobile spectrum allocation, traffic modelling and licence bidding and award. Our technology

experts have designed base stations, handsets and other equipment for many clients and

have in-depth knowledge of mobile communications systems and mobile network

dimensioning and planning.

32

Los Angeles

Buenos Aires

Beijing

CopenhagenStockholm

Oslo

Dublin

LondonCambridgeBelfastBirminghamEdinburghManchester

UK:

Bangalore

Denver

New Delhi

Utrecht

FrankfurtMunich

Wellington

DubaiAbu Dhabi

BostonNew YorkPrinceton

Madison

Washington, DCLos Angeles

Buenos Aires

Beijing

CopenhagenStockholm

Oslo

Dublin

LondonCambridgeBelfastBirminghamEdinburghManchester

UK:

Bangalore

Denver

New Delhi

Utrecht

FrankfurtMunich

Wellington

DubaiAbu Dhabi

BostonNew YorkPrinceton

Madison

Washington, DC

At PA Consulting Group, we transform the performance of organisations.

We put together teams from many disciplines and backgrounds to tackle the most

complex problems facing our clients, working with leaders and their staff to turn around

organisations in the private and public sectors. Clients call on us when they want:

an innovative solution: counter-intuitive thinking and groundbreaking solutions

a highly responsive approach: we listen, and then we act decisively and quickly

delivery of hard results: we get the job done, often trouble-shooting where previous

initiatives have failed.

We are an independent, employee-owned, global firm of 2,700 talented individuals,

operating from offices across the world, in Europe, North America, Middle East, Latin

America, Asia and Oceania. We have won numerous awards for delivering complex

and highly innovative assignments, run one of the most successful venture programmes

in our industry, have technology development capability that few firms can match,

deep expertise across key industries and government, and a unique breadth of skills

from strategy to IT to HR to applied technology.

• defence • energy • financial services • government and public services

• international development • life sciences and healthcare • manufacturing

• postal services • retail • telecommunications • transportation

• strategic management • innovation and technology • IT • operational improvement

• human resources • complex programme delivery

Delivering business transformation

PA offices worldwide

Corporate headquarters 123 Buckingham Palace Road London SW1W 9SR United Kingdom Tel: +44 20 7730 9000 Fax: +44 20 7333 5050 E-mail: [email protected]

www.paconsulting.com This document has been prepared by PA on the basis of information supplied by the client and that which is available in the public domain. No representation or warranty is given as to the achievement or reasonableness of future projections or the

assumptions underlying them, management targets, valuation, opinions, prospects or returns, if any. Except where otherwise

indicated, the document speaks as at the date hereof.

© PA Knowledge Limited 2009. All rights reserved.

This document is confidential to the organisation named herein and may not be reproduced, stored in a retrieval system,

or transmitted in any form or by any means, electronic, mechanical, photocopying or otherwise without the written permission of PA Consulting Group. In the event that you receive this document in error, you should return it to PA Consulting Group, 123 Buckingham Palace Road, London SW1W 9SR. PA accepts no liability whatsoever should an unauthorised recipient of this document act on its contents.

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