Ofcom must resolve uncertainty around the reallocation of
mobile radio frequencies if the government is to realise its dream
of a Digital Britain.
Much has been made of the government's cornerstone desire,
promised last week by Treasury and communications minister Stephen
Timms, but disputed by Whitehall, for guaranteed universal access
to a minimum 2Mbps broadband connection by 2012. The Department for
Business Innovation and Skills says it will be "up to 2Mbps".
The reallocation of radio frequencies is essential if they are
to achieve this. This is because it will cost too much to roll out
fixed cables to every home, office and farm; some links will have
to be wireless.
Carlos Leira, head of technology at mobile network operator
Orange, says, "For mobile network operators [MNOs], spectrum is
oxygen."
Ofcom is presently consulting on proposals to reallocate
spectrum in the 800Mhz, 900Mhz and 2.6Ghz bands, If Ofcom gets it
right, the UK could lead the world in mobile broadband, says Kevin
Russell, 3UK's CEO.
But there is a long way to go even after the spectrum is
reparcelled. Except for 3UK, the mobile networks mix 2G and 3G
voice-optimised technologies.
Russell says 3UK deliberately went after the mass market with
applications such as Skype, YouTube and Facebook with dongles,
mid-range internet-capable phones and a Skypephone. Data now makes
up 94% of traffic on 3UK's network, which it shares with T-Mobile,
currently the object of a takeover by Orange.
The introduction of smartphones and the subsequent increase in
data traffic are driving a complete re-engineering of Orange's
mobile network infrastructure, says Tim Smith, head of Orange
networks. Re-working the network from a voice-friendly circuit
switched network to a data-friendly packet switched network is the
only way to optimise the experience of using smartphones, he
says.
That brings in the issue of coverage. Russell says that by next
year 3UK will have 13,000 basestations providing 14.4kbps broadband
connections to 98% of the population. Andy Sutton, Orange's
principal design consultant and network architect, says Orange is
well advanced in testing 3G, or High Speed Digital Packet Access
(HSDPA), at up to 6Mbps.
But this is limited to Orange's (and other MNOs) 2G and 3G
coverage footprints. So there are at least two generations of
digital radio technology to amortise before UK MNOs can afford to
think of introducing
Long Term Evolution (LTE), which is theoretically capable of
100Mbps. And they will need the right frequencies in the right
places to make it viable.
Smith says permitted write-off periods (which can be decades in
the telecoms industry) don't help him to introduce new, faster,
greener technology quicker. Nor does the uncertainty over business
rates on communications infrastructure. David Harrington of the
Communications Management Association says a rates valuation can
shift the profitability of a network investment by several million
pounds.
What MNOs need is more certainty about regulations and taxation.
Their margins are already under pressure, so continued uncertainty
risks letting their attention wander elsewhere.