Contrasting the digital dividend situation in Sweden with the rest of Europe

The Swedish telecoms regulator, PTS (Swedish Post and Telecom Agency) held an auction on Feb. 28 to assign licenses in the 800 MHz spectrum band. There were six licenses at stake (2x5 MHz each), all of them technology and service neutral, and participants could buy a maximum of two licenses each (2x10 MHz).

The auction, which was expected to take no longer than 10 days, concluded March 5 after 31 rounds of bidding. Three bidders won licenses (one 2x10 MHz paired spectrum license each) in the digital dividend band for a total of SEK2.054 billion (€228 million). The winners were Hi3G, Net4Mobility and TeliaSonera. Com Hem and Netett Sverige also participated in the auction but did not win any licenses. Hi3G spent SEK431 million, TeliaSonera paid SEK854 million and Net4Mobility bid SEK469 million plus SEK300 million to invest in the 800 MHz band over the next few years.

As PTS Director-General Göran Marby pointed out, this spectrum band will be used to provide broadband to those households and companies that still lack coverage today, in line with the goal of achieving broadband mobile coverage to the whole country. Furthermore, each of the winning bidders will pay processing charges of SEK200,000 per spectrum block to PTS.

Although license holders can select which technology and service that they will deploy, it is expected that all will use this licenses to complement 2.6 GHz LTE networks. Obviously, using lower frequencies will make it easier and cheaper to cover wider areas. The world's first carrier to introduce LTE services was Swedish TeliaSonera, which launched its network in Stockholm at the end of 2009 and later expanded service to nearly 30 cities across the country. Tele2 and Telenor launched their own LTE services in Sweden a year later via Net4Mobility, and now cover five major cities.

The future of LTE network deployment in Sweden also looks promising. It is expected that by the end of the year TeliaSonera will have covered around 240 cities, while Tele2 and Telenor are aiming to expand LTE coverage to up to 200 cities. Furthermore, Hi3G is set to launch its LTE network by the end of this year based on its 2.6 GHz concessions (FDD paired blocks and TDD) and its new digital dividend license. Following this tendency, an outstanding percentage of 99 percent of Swedish households will be covered by the end of 2012. Doubtlessly, the new licenses recently announced will play a major role in achieving this goal. 

However the digital dividend situation in other European countries is quite different. In fact, when it comes to LTE deployment, most of Europe is behind the North American and Asia-Pacific markets. This slow LTE adoption basically reflects the slow approach being taken by the majority of national telecoms regulators to make suitable spectrum available. In fact, some large countries are not releasing the critical 800 MHz band until 2015. In addition to this regulatory issue, most European operators are trying to provide greater data capacity by making better use of their current infrastructures (HSPA, HSPA+ or Wi-Fi offloading). Therefore, few other European countries are expected to follow Sweden's path in the near future.

Javier Escribano is an analyst at Maravedis, and manages regulation and femtocell analysis. He graduated in Telecommunication Engineering at the University of Zaragoza, then completed a Maste's degree in Information Technology and Mobile Communications, which provided him with further education of a specialized nature focused on wireless broadband technologies such as WLAN, 3G and 4G. Maravedis is a is a leading analyst firm focusing on disruptive technologies including smart networks using 4G, LTE, WiMAX.