Mobile broadband: approaches to regulation. Abigail Browne Cullen International
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1 Mobile broadband: approaches to regulation Abigail Browne Cullen International Istanbul, 2 June 2011
2 Agenda Spectrum policy for mobile broadband Investing in growth traffic management Roaming regulation The Austrian case
3 Spectrum policy How much spectrum is available for mobile broadband? How much is needed? short term long term Can new spectrum help bring broadband to rural areas?
4 Spectrum for 3G and 4G mobile broadband in Europe 2.1 GHz 900 MHz 1800 MHz 800 MHz 2.6 GHz 700 MHz Original 3G band Liberalisation of use of 2G bands Digital dividend 3G extension band Digital dividend 2 Paired 2x60 MHz 2x35 MHz 2x70 MHz 2x30 MHz 2x70 MHz? Unpaired 35 MHz 50 MHz? EU deadlines 3G: G: (proposal) 2012 (proposal)?
5
6 Award of the 2.6GHz band Awarded Before Jan. 1, 2012 In 2012 or timing not yet annouced EE LT LV PL LU CZ SI HR SK HU RO BG MK TR Source: Cullen International (March 2011) MT CY
7 Award of the 800MHz band Completed Before Jan. 1, 2013 Timing not yet announced EE LV LT PL CZ SI HR SK HU RO BG MK TR CY MT Source: Cullen International (March 2011)
8 Countries where the national frequency plan allows 3G services in the 900 and 1800MHz bands Yes in both bands Yes in 900 MHz only No EE LV LT PL CZ SI HR SK HU MK RO BG TR Source: Cullen International (March 2011) MT CY
9 800MHz band rural coverage obligations Country France Germany Italy Portugal Spain Sweden Obligations - a minimum coverage obligation by region ( départements ) - Coverage for a list of municipalities having low coverage with spectrum above 1 GHz ( zones blanches ). 800 MHz must first be used to cover white areas Proposal: 800 MHz must first be used to cover small communes following a methodology set out by AGCOM Winners of each of the 800 MHz lots must, within 18 months, cover 60 parishes identified by ANACOM as having poor broadband coverage By Jan. 1, 2020, MNOs holding 2x10 MHz must offer jointly with other frequencies/ technologies min.30 Mbps (download) broadband coverage in towns with less than 5,000 inhabitants. Coverage obligation for one 2x5 MHz block acquired by Net4Mobility UK Proposed: one 800 MHz lot would contain an additional 95% population coverage obligation
10 Investing in network growth and Traffic management issues What are the targets? Who will pay? to upgrade existing nets to build new nets Net neutrality a debate about distribution of profits?
11 European Union targets for high-speed broadband Universal coverage All EU citizens should have access to: 2013 Basic broadband (speed not defined) Subscriptions % of EU households having subscriptions with speeds above 100 Mbps: No target 2020 Fast broadband with speeds of at least 30 Mbps 50% households
12 ARPU increases needed to fund capacity upgrades to existing networks Source: Cisco, A.T. Kearney Source: A.T. Kearney
13 Roaming regulation for mobile data Is retail regulation needed for mobile data? Gap between wholesale and retail charges Incentives? short term price-cap regime long term structural regime Single EU price vs Zero roaming charges
14 International roaming (inside the EU) for 3G data services Retail regulation Automatic cut-off when expenditure reaches: EUR 50 per month To protect users from bill shocks Wholesale regulation Price caps per MB of data sent/received: 2009 EUR EUR EUR 0.5
15 EU average price per MB for retail and wholesale data roaming Source: BEREC Q Q Q Q Q Q Q Q Q Q Q Retail off-net Retail on-net Wholesale non-group data Wholesale group data
16 The Austrian case Austria s high mobile broadband penetration What are the implications for regulation? European Commission accepted Austria s inclusion of mobile BB in the retail market for residential users of BB
17 Connections (000s) 1,800 1,700 1,600 1,500 1,400 1,300 1,200 1,100 1, Austrian broadband connections DSL Telekom Austria (retail) DSL bitstream in TA network DSL over unbundled loops Cable broadband Other broadband Mobile broadband Almost no fibre roll-out in Austria Bitstream access and unbundling have low impact Mobile BB is the single largest technology for BB access
18 Retail market for residential end-users Susceptible to ex ante regulation? No: it fails the three criteria test High market entry barriers Market is effectively competitive No need to examine third criterion
19 Austria: Analysis of Wholesale Broadband Access market (M5/2007) mobile broadband had created a high level of competition in the retail residential broadband market wholesale regulation should be imposed only where this is necessary to achieve or maintain effective competition in the corresponding retail market RTR therefore considered splitting the wholesale broadband access market between Residential and Business users with a view to deregulating the market for residential users RTR s final market definition excluded all broadband lines that will be used by residential end-users
20 Assessing the substitutability between fixed and mobile broadband Aspects to be taken into account: Different product functions used by end-customer Technical factors: download/upload bandwidth, latency, packet loss etc The potential deployment of fixed NGA (FTTx & DOCSIS 3) networks that would offer higher speed levels than mobile broadband Do fixed & mobile BB lie within close price range? Evidence concerning actual patterns of use Source: Commission comments on Austria s M5/2007 analysis
21 Areas of debate Spectrum policy: how to promote rural coverage Network investment: new business models to support change in traffic balance Roaming: how can regulation promote retail competition in the long term?
22 Thank you!
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