Saturday October 23, 2010
By LEONG HUNG YEE
THIRD-GENERATION (3G) spectrum awards took the world by storm where billions (of dollars) were invested to get the prized spectrum.
It started with UK where service providers paid hefty amounts for the expensive 3G spectrum.
Globally, spectrum is rare and telcos that want to move up the value chain pay billions to possess the spectrum to enable them to offer more and better services as well as to be a step ahead of competitors in the fast changing technology.
Most countries tend to auction their 3G and 4G telecommunication spectrum. Malaysian Communications and Multimedia Commission (MCMC) had also raked in a substantial amount of money when it accepted tenders in the first and second rounds when awarding the 3G spectrum.
However, it was slightly different from the 2G licences as the wireless communications were just beginning to take off. Locally, 2G licences were given out to service providers to encourage them to start offering their services.
In India, which had just concluded its long-delayed 3G licence auction, the government has announced that it will turn its attention to 4G spectrum. The bid for India’s 3G spectra was possibly the most aggressive of 3G auctions globally with prices reaching as high as US$15bil.
Now that 4G has come into play, there is another round of awards but it may not be as aggressive as 3G as telcos have learnt a lesson after forking out too much money only to discover there were problems rolling out their services. Although the stakes are a bit lower, nonetheless, the bidding process is still highly competitive.
Europe’s first 4G auction opened in Germany in April this year.
The 4G auction in Germany raised 4.38 billion euros, with Vodafone Germany submitting the highest bid of 1.42 billion euros, followed by Telefonica O2 (1.38 billion euros), Deutsche Telekom (1.3 billion euros), and E-Plus (283.6 million euros).
However, various reports said the over 4 billion euros from the auction of the 4G spectrum in May was just over half of what some analysts predicted.
Meanwhile, Telekom Austria, Hutchison 3, T-Mobile and Orange collectively paid US$54.3mil in Austria’s auction.
Vodafone Germany has recently announced its 4G roll-out for Germany and will have LTE coverage in 1,000 municipalities by Christmas, and the service provider also promised a national network by the end of 2011.
In July, the UK government said it will auction digital dividend spectrum by end-2011, ordering regulator, Ofcom to start preparing for the sale.
The UK government raised £24.6bil at auction for 3G licences a decade ago, a figure seen at the time as exceptionally high, it seems likely that the 4G spectrum auction will raise far less money.
Countries such as Sweden, Norway, Denmark, Finland and the Netherlands have concluded 2.6 GHz spectrum auctions for mobile services.
In the United States mobile phone operators are accelerating the roll-out of 4G mobile services. It was reported that Clearwire, Sprint and Time Warner Cable have each announced plans to launch separate 4G mobile internet services in New York before the end of the year.
Closer to home, Taiwan, Hong Kong and Japan have also auctioned spectrum for the provision of 4G services.
Hong Kong has awarded licenses for 4G mobile operations to the three highest bidders in a recent spectrum auction. The successful telcos are CSL Ltd, Genius Brand Limited and China Mobile Hong Kong Co Ltd.
Currently all three of Singapore’s mobile operators – SingTel, StarHub, and MobileOne – were reported to be conducting trial LTE services in the 2.6GHz band.
Despite gearing up for the 4G technology, Singapore’s regulator Infocomm Development Authority is offering a new set of 3G spectrum blocks to three players.
Two years ago, South Korea announced plans to spend 60 billion won (US$58mil) on developing 4G and even 5G technologies, with the goal of having the highest mobile phone market share by 2012, and the hope of an international standard.
Currently, Japanese company NTT DoCoMo and Samsung are testing 4G communication.
Locally, the scene is not much different as service providers are conducting trials for 4G.
While most countries decided to auction off their spectrum for the 4G, the local regulator, MCMC has decided to allocate from the 2.6GHz spectrum a block of 20MHz each to nine cellular/wireless companies without any bidding process.
The commercial rollout is expected to happen in 2013 and is expected to put Malaysia on par with many countries in the region such as Japan, South Korea, Singapore and Hong Kong. However, there are other countries that are still grappling with 3G spectrum awards such as India and Thailand.
Industry players say 4G is expected to provide a comprehensive and secure all-Internet protocol-based solution where facilities such as IP-telephony, super-broadband Internet access, and streamed multimedia could be provided to users.
An industry player is tight-lipped on what services could be offered in future but says consumers would get better quality and better interaction.
“It will not be any different from the current 3G but better. It (4G) is basically a technology to enable service providers better services and better quality,” he says.
Without a doubt, 4G services will improve mobile Internet services by offering wider broadband connections comparable with WiFi. “Consumers may need a new device to upgrade to 4G technology just like 3G phones. A 2G phone will not be able to receive a video call but a 3G phone can,” he says, adding that mobile phones may be in dual mode in future so that once outside the 4G service area, connectivity will revert to 3G or Edge.
“From a technical perspective, there is a consensus of opinion that 4G is the way forward. It can deliver the video-based and high-speed data services that are currently needed by data-savvy users using mobile telecoms services,” an analyst says.
“Malaysia has moved very fast. 3G was introduced less than 10 years ago and we are already getting ready for the next generation,’’ he adds.
When 3G was introduced, it took a while before it became popular in some countries, and the lack of 3G handsets then dampened growth from the start.
This may not be the case in embracing 4G given that consumers are becoming more technology or data-savvy while the availability of 4G mobile phones is increasing.
Basically, the first generation of wireless technology refers to the analogue signal used by cellular towers while 2G technology upgraded the analogue signal to digital and allowed the inclusion of sending SMS across the network.
The 3G technology uses electromagnetic wavelengths, known as spectrum, to broadcast a wireless broadband signal that allowed users to access the Internet and download applications using a 3G data card or a handheld mobile device such as a Blackberry or iPhone. 4G technology will enable faster information transfer times, heightened security and greater information exchange abilities.
http://biz.thestar.com.my/news/story.asp?file=/2010/10/23/business/7272917&sec=business
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