The benefits of spectrum harmony
Whatever you may think about the single market proposals put forward by the European Union's digital chief, Neelie Kroes, in September--and the abolition of roaming fees plus the somewhat clumsy net neutrality provisions have certainly come in for their fair share of criticism--one proposal does stand out as being potentially beneficial for the industry: the harmonisation spectrum allocation across Europe.
As things stand, nine markets have already asked for a delay in allocating spectrum in the 800 MHz band for mobile use, and this in turn will have an impact on the LTE rollout plans of operators in those markets.
To be sure, LTE is well on its way in Europe. This week saw rollouts by BASE in Belgium, Bougyues Telecom in France, Monaco Telecom in, er, Monaco, and T-Mobile in the Czech Republic. Ireland also recently got its first LTE services from Eircom's Meteor.
In fact, in several markets in Europe there are more operators with commercial LTE services than without. In the UK, EE, Vodafone and Telefónica's O2 UK have all launched services, while in France Bouygues Telecom joins both Orange and SFR as an LTE player. Germany was an early starter with LTE and initially targeted the fixed-mobile substitution market. Vodafone Germany, Deutsche Telekom and O2 Germany all now provide LTE tariffs and services.
That LTE services are proving to be popular, at least in the UK, was confirmed by a recent report from Deloitte, which said awareness of and interest in LTE was increasing in this market. Indeed, speak to anyone who has upgraded to LTE and they are mostly impressed by the clear increase in performance. The leap is certainly greater from 3G to LTE than from 2G/EDGE to 3G, they note.
Yet as operators roll out services, behind the scenes there are still spectrum auctions in progress, with more on the horizon.
This week saw five companies line up to bid for 800 MHz, 1800 MHz and 2.6 GHz spectrum in the Czech Republic, which has gone through a particularly tortuous LTE spectrum process. The first auction attempt was cancelled because the regulator was worried that bids were too high--certainly a rare reason for any government to cancel an auction. In the UK, for example, some politicians clearly deemed £2.34 billion ($3.75 billion) as not enough from the UK LTE auctions, and called for an investigation into this "low return" by the National Audit Office, thereby indicating some have learned nothing from the aftermath of the 3G auctions.
The Czech Republic is now planning to make a second attempt in November, but the regulator already faces legal action from Telefónica over its plan to reserve spectrum for a new entrant.
Meanwhile, Austria is currently in the midst of a spectrum auction, and the latest reports from Reuters indicate that bids have already reached close to €2 billion ($2.71 billion), which is about four times the minimum price set by the regulator, according to Reuters' calculations.
Reuters has largely been relying on unnamed sources to provide it with information as the auction is veiled in secrecy. Operators are not even allowed to confirm they are taking part. A reports from Bloomberg also suggest that a fourth entrant has not emerged during the auction, even though the regulator had reserved two blocks for new operators. This will no doubt be welcome news to Telekom Austria, T-Mobile Austria and 3 Austria (which now owns Orange Austria), which would not welcome a fourth player again on this competitive market.
LTE is coming, but it's patchy and slow in some places. It's hard to imagine the synchronisation of future spectrum auctions in 28 member states to ensure a more coherent rollout of services, but any moves towards harmonisation on processes, pricing and conditions would certainly be a welcome development.--Anne