© GSM Association 2009 Restricted - Confidential Information

© GSM Association 2009

Restricted - Confidential Information© GSM Association 2008All GSMA meetings are conducted in full compliance with the GSMA’s anti-trust compliance policy

Digital Dividend – UHF for mobile broadband in Asia PacificHanoi 15th April 2010


Viet Nam Workshop – April 2010Viet Nam Workshop – April 2010

The Importance of Regional spectrum harmonisation, and Viet Nam’s leadership role

Roberto ErcoleDirector of Spectrum RegulationGSM Association

http://www.gsmworld.com/digital_dividend/

4.8 Billion mobile Connections globally3.7 bn 2G (GSM), and 0.5 bn 3G (HSPA/WCDMA)

http://www.gsmworld.com/digital_dividend/


Why Frequency Harmonisation matters

3G/WCDMA


Outline

What is the importance of Digital Dividend spectrum (globally available) What is the case for mobile access to this spectrum (improved coverage) What about the current use by broadcasting

What is a fair split and how have other Administrations decided this (economic studies)

What is happening in the rest of Asia and Viet Nam’s leadership role and the importance of Viet Nam aligning with her neighbours (Regional Harmonisation benefiting Asian economies and consumers)

What does the GSMA propose based on our experience in other markets To consider undertaking detailed economic studies before making a

final decision


What will help deliver the NSCICT/MIC vision?

Mobile can help make this happen

Source : White book 2009


What is the Digital Dividend (UHF)

The Digital Dividend is the radio frequencies that are currently used for terrestrial television broadcasting in many countries – it represents a scarce resource and an important opportunity

Spectrum for terrestrial television is being reorganised to accommodate newer and more efficient digital TV services (such as DVB-T)

This opportunity might not come again in a generation Technically the spectrum used is below 1 GHz (470 to 862 MHz) and is ideal for

covering rural areas These frequencies are ideal for terrestrial TV and for mobile broadband The question that is being addressed by Administrations is :

Given that digital TV is many times more efficient than analogue, what is the amount of spectrum that could be freed for mobile?


What is the case for mobile broadband :to allow citizens to access the knowledge based economy via broadband

Why does mobile need access to UHF spectrum used by terrestrial television


Why ubiquitous broadband needs mobile

• Economist special report : “Mobile Marvels” – Sept. 09

• Mobile broadband will overtake fixed in the year 2011


Why should mobile help with broadband

Evidence to support this view


How mobile has grown in Vietnam

Now – 105 million (Q4 09 )Over 100% penetration!

Mobile data now growing :

10.6m cdma2000

90k WCDMA/HSPA


Mobile broadband grows rapidly after launch – even in a recession!

Mobile broadband take-off relatively quick in mature markets


Mobile broadband

80 % of broadband subscribers are mobile in 2014Mobile Broadband includes: CDMA2000 EV-DO, HSPA, LTE, Mobile WiMAX, TD-SCDMAFixed broadband includes: DSL, FTTx, Cable modem, Enterprise leased lines and Wireless Broadband

mobile broadband subscriptions grew to a total of 330 million

fixed broadband connections grew to 400 million

80 %

Source: Ericsson


Effect of frequency on range and capex

Coverage of rural areas at about 30% of the cost of 2100 MHz

The need for thousands of extra base station sites removed


What is the added benefit of UHF

• Propagation characteristics – UHF goes further than core 3G spectrum at 2GHz - Double the range means 75% less base stations

• Also allows operators to deploy UHF first, then add capacity with spectrum above 2 GHz as demand (and revenue from customers) increases

• Current spectrum for mobile below 1 GHz fully loaded with voice in many places, and there is a need to run GSM and 3G in parallel in the same spectrum for many years

• Auction of spectrum in the US in March 08 produced around $20bn – mostly went to mobile operators.

• Allows mobile broadband to move from a city based service to one that is as ubiquitous as mobile voice


The impact on Viet Nam’s leadership role in the Asia Pacific region

The progress in Asia PacificTelecommunity to focus on 698 to 806 MHz – and the historic opportunity for this region to lead in the development of mobile broadband, as opposed to following the US

or Europe


Current global status of UHF at a glance

Region 1Europe: 790-862 MHzCEPT band plan

Region 2USA:698-806 MHz

Region 3Focus in Asia on 698-806 MHzPopulation 3.7 billion


Last week at the Asia-Pacific Telecommunity (http://www.apt.int) meeting dealing with spectrum issues it was agreed that an Asia specific spectrum plan would be developed for the region to help promote the deployment of UHF digital dividend spectrum. It was agreed that the pragmatic way forward was to develop a “2X45 MHz” FDD paired spectrum band plan. It was recognised that the economies of scale that the region offers (with 34 member countries, including China and India) represents a significant opportunity to benefit Asian consumers and their economies.

Although the APT did not agree on a single band plan yet, it is a significant step in agreeing what will hopefully be the “primary” FDD band plan for the region. The meeting (APT Wireless Forum#8) agreed that this was a “major” step forward.

What is happening in the Asia Pacific Region

http://www.apt.int/


What is the importance of band plans? These are the frequencies used by devices – the number of

bands a device can use is limited; Because of this restriction manufacturers only support bands

that can be used in many countries; Apart from the propagation characteristic, the main advantage

of UHF is international frequency harmonisation Viet Nam intends to follow a band plan designed for Europe

(790-862 MHz) –because this has the least impact on broadcasting - but the rest of Asia looks set to adopt 698 to 806 MHz

The GSMA sees two potential drawbacks: This band plan will be out of step with Viet Nam’s neighbours Europe is considering extending her band plan down to 698

MHz to align with Asia and the US


What can Viet Nam add to this APT process

• As yet there are still other band plan options on under discussion at APT, and it is not agreed by all parties that an “APT Recommendation” is required (9 countries need to support this)

• If Viet Nam were to support such a recommendation that would add significantly to possibility of achieving it rapidly

• Viet Nam could also use her influence to help minimise the number of such band plans

• If Asia Pacific were to agree one “primary” UHF band, the economies of scale from the most populous region would represent a significant benefit in lower cost devices for consumers


What about TV Broadcasting

What would be the impact on Viet Nam’s broadcasting industry if spectrum above 698 MHz were used for mobile


Background The spectrum currently used for TV in Viet Nam (source MIC)

21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 6 7 8 9 10 11 12 13

VHF Band III (174-230 MHz) UHF Bands IV and V (470 – 862 MHz)

Analogue & Digital Analogue Only Mobile Total used for TV: 49 channels Not usedDigital Only

How channels are utilised across Viet Nam (no. Transmitters per site)

790698

Relatively few transmitter sites used between 698 – 790 MHz

To be cleared


The impact on broadcasting

• By reserving spectrum above 698 MHz for mobile broadband still allows for enough UHF and VHF spectrum to support 6 digital TV channels

• Unlike analogue where each channel supports one TV programme, one digital channel can share (multiplex) : 6 channels with first generation digital technology (DVB-T and MPEG2)

• New developments in digital compression (MPEG 4) and digital TV transmission (DVBT-2) can triple this (18 SD)

• What is the business model to support such a large number channels – experience from the Europe and the US has shown large amounts of advertising revenue moving from terrestrial TV to other platforms such as satellite and cable – and most recently the internet

The Digital Dividend in Viet Nam appears to be only 16 MHz, compared with over 100 MHz in other Asian countries


• It is very hard to quantify social benefits, but that such benefits are associated with both television and broadband;

• That access to broadband is not a luxury, but an essential for economic well being and social inclusion;

• Broadband is required for helping combat the Digital Divide, and delivering government e services

• Help to develop the knowledge based economy, promoting jobs and skills training

• Studies have shown:• In Ireland awarding around 120 MHz for mobile increases

economic value from €2.1 to €3.3 billion • An industry sponsored study found that for Europe between €63

and €165 billion is generated with some mobile UHF spectrum• A study for the French regulator found that €25 billion would be

generated in France firm having some mobile UHF spectrum

Social welfare


Size of markets for Mobile and Broadcasting

Source - http://atac.casbaa.com/upload/File/Countries/Regional/Asia%20Pacific%20Advertising%20Revenue%20Overview.pdf

Revenue for mobile (2008) $3,250m (US)

TV advertising revenue in Vietnam (2008) $420m (US)

Source NSCICT / MIC White Book 2009


Example CBA report for the Irish Regulator

• 1) Europe Economics: How can Ireland best benefit from DD http://www.comreg.ie/_fileupload/publications/CP50e.pdf

The analysis shows the maximum combined value (broadcasting and mobile) is between 80 and 120 MHz in Ireland.

60% increase in economic benefits if 80 MHz assigned to mobile

http://www.comreg.ie/_fileupload/publications/CP50e.pdf


Potential impact of increased broadband

http://gsmworld.com/our-work/public-policy/spectrum/digital-dividend/links_to_useful_documents.htm#nav-6

Extra jobs and GDP if mobile broadband is allowed to grow

http://gsmworld.com/our-work/public-policy/spectrum/digital-dividend/links_to_useful_documents.htm#nav-6


Numbers of digital terrestrial TV stations and multiplexes in various countries

Country Stations available(April 09)

Operational multiplexes

Finland 33 4 + 1 mobile

France 28 5 (additional local multiplexes planned)

Germany 47 4 (up to 2 more planned)

Italy 61 10

Netherlands 41 6 – includes some SFNs

Spain 21 5 + 1-2 regional, includes some SFNs

Sweden 35 5 + 1 planned, includes some SFNs

UK 48 6

Vietnam (projected) 30 (10 VTV + 10 regional / local + 10 VTC)

4-5 + 1 mobile

Source : Aegis briefing note on Vietnam


Impact of Google on TV advertising revenues

Google overtakes ITV


What is the way forward• Many administrations in the Asia Pacific region have already started to

move towards allocating the wider band at 698-806MHz rather than the Region 1 band at 790-862MHz. The GSMA believes that spectral efficiency is best served by exploring the possibility of this and, where necessary, assessing whether digital TV can be amply served below the 698MHz

• boundary. Studies undertaken elsewhere – notably by the European Commission – have shown a significant economic and social benefit in allocating dividend spectrum below the 790MHz bar.

• A pragmatic approach to planning would be to ensure that digital TV• spectrum is allocated first at the bottom of the 470-862MHz band, and a

detailed assessment carried out as to whether channels above 698MHz can be freed for use by mobile broadband.

• An initial assessment by GSMA for Viet Nam suggests that spectrum below 698 MHz could give six multiplexes for TV – providing capacity for up to 50 channels now and over 100 with the latest digital TV technology


Conclusions

• The award of TV spectrum should be limited to below 698 MHz until a detailed cost benefit analysis can be carried out and stakeholders can be consulted;

• Such an analysis should consider the needs of broadcasting and mobile for spectrum;

• There should also be consideration given to what Viet Nams’ neighbours may intend to deploy (698 to 806 MHz) and any impact that may have;

• The opportunity for Viet Nam to play a leadership role in the Asia Pacific Telecommunity process should also be considered – as should the possible extra benefits of economies of scale AP may offer over Europe; and

• The long term stability of the European 790 – 862 MHz should be evaluated, as Europe may well consider extending down to 698 MHz to promote global alignment.


Supporting slides


Packet data Speech

85 % of the traffic in WCDMA/ HSPA networks is data

It’s all about Data growth

Source: GSMA, GSA, and Ericsson NetQB, March-2009


The lessons of history – exponential growth

ICT Development index : 2009 (ITU)

Mobile voice overtook fixed (globally) in 2002

When will mobile broadband overtook fixed ?


Mobile developments HSPA & Long Term Evolution

• High Speed packet Access : and enhancement of UMTS/3G• Can offer data rates comparable to DSL (7 Mbps+ per carrier);• Real alternative to ADSL from consumer’s view point;• With access to UHF mobile broadband can help provide coverage in

rural areas there is little ADSL or where houses are to far from the exchange to access broadband;

• Can help foster competition where fixed (ADSL) is not as widely available (Eastern/Central Europe); and

• LTE will offer even higher data rates than HSPA and will deliver data more efficiently and cost effectively (100 Mb/s + possible)


LTE uptake projections


Mobile BB Subscribers Projections

2015

Sub

scrib

ers

(bill

ion)

2008 2009 2010 2011 2012 2013 2014

0.5

1.0

1.5

2.0

2.5

WiMAX

LTE

HSPA/HSPA+

EV-DO

Source: Analysys Mason, 2008LTE/HSPA will surpass 1.5 billion subs in 2015


http://www.humancapital.co.uk/gsma/The%20Limits%20to%20Terrestrial%20Television%27s%20Case%20For%20Further%20Spectrum.pdf

How Broadband economics might affect Broadcast economics

Broadband : delivering programme content

© GSM Association 2009 Restricted - Confidential Information

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