Combine Licensing of 800 MHz and Combine Licensing of 800 MHz and 2.6 GHz Band2.6 GHz Band

Facilitating Key Decisions

2

To motivate for combined licensing of the 800 MHz and 2.6 GHz band and to facilitate key decisions in this regard

– Before the band can be designed and a licensing framework can be concluded it is important to make key decisions to ensure that any further work is not muddled by contradictions and to reduce uncertainties

PurposePurpose

3

What socio-economic issues to be considered? What government objectives are we addressing?

What is the motivation for combined licensing of 800 MHz and 2.6 GHz?

Why it makes sense to license 800 MHz now?

What about other BWA or IMT spectrum?

Preferred harmonized frequency arrangements– Why use preferred harmonized frequency arrangements?– What is required to ensure that we are aligned to preferred

harmonized arrangements? And what are implications?

Timetable – commitments to realistic timelines

Other issues

Main issues of considerationMain issues of consideration

4

Bridging the digital and urban-rural divide– 800 MHz is good for less urban and rural areas (coverage driven)– 2.6 GHz good for urban and capacity driven environment

Opportunity costs - Loss of revenue from spectrum license fee collection; Loss of revenue from sale of end-user services; Loss of capital investment (network rollout); Loss of opportunity to facilitate competition; Loss of job creation opportunities; Loss of contribution to tax and excises

Both issues talk to government outcome 6 and outputs 1 and 5

– Outcome 6: An Efficient Competitive and Responsive Economic Infrastructure Network

– Output 1: Improving competition and regulation– Output 5: Communication and Information technology

What socio-economic issues to be What socio-economic issues to be considered?considered?

5

800 MHz is cost effective for coverage But extremely expensive if environment is capacity driven

Combined 800 MHz and 2.6 GHz is the most cost effective option – the band are complementary to each other

Combined 800 MHz and 2.6 GHz address both urban and rural

What is the motivation for combined What is the motivation for combined licensing of 800 MHz and 2.6 GHz?licensing of 800 MHz and 2.6 GHz?

6

Definitely 800 MHz should be vacated by broadcasters after dual illumination or by 17 June 2015

Ensures that there is no delay of network deployment after the band is vacated by broadcasters

Possible interplay of Market forces: coordination by winners with incumbents may happen even before dual illumination

Why it makes sense to license 800 Why it makes sense to license 800 MHz now?MHz now?

7

(See supplementary slides)

Some are exhausted - e.g. tradional GSM900, GSM1800 and 3G bands

Some are extensively used for other services – e.g. 450 – 470 MHz and 862 – 880 MHz

Some have no preferred harmonised frequency arrangement – e.g. 3.5 GHz

Some provide opportunity for spectrum pooling – e.g. 1880 – 1920 MHz

What about other BWA or IMT What about other BWA or IMT spectrum?spectrum?

8

Preferred harmonized frequency arrangements for Preferred harmonized frequency arrangements for 800 MHz and 2.6 GHz bands800 MHz and 2.6 GHz bands

(70 MHz) FDD Uplink (50 MHz) TDD (70 MHz) FDD Downlink

2500 MHz 2570 2620 2690

790

11 MHz

796

801

806

811

816

821

791

832

837

842

847

852

857

862Downlink Uplink

9

To maximise the opportunities and benefits for end users and society

To benefit capital expenditure for operators

To reduce development and implementation costs of manufacturing equipment

To secure future long term investments by providing relevant economies of scale

To reduce complexity in cross border coordination.

Why use preferred harmonized Why use preferred harmonized frequency arrangements?frequency arrangements?

10

In-band migration of the incumbents is required

– Neotel in 800 MHz

– Sentech and WBS in 2.6 GHz

There are cost implications associated with migration

– WBS have submitted costs

– Neotel expected to incur huge cost as well

How to ensure preferred harmonized How to ensure preferred harmonized arrangements? What are implications?arrangements? What are implications?

11

In-band migration in 800 MHzIn-band migration in 800 MHz

790

11 MHz

796

801

806

811

816

821

791

832

837

842

847

852

857

862

Downlink Uplink

Neotel proposedassignment

790

11 MHz

796

801

806

811

816

821

791

832

837

842

847

852

857

862Downlink Uplink

One leg of Neotel’s current assignment

There is another alternative for Neotel that can be explored in parallel

12

In-band migration in 2.6 GHz bandIn-band migration in 2.6 GHz band

Sentech (50 MHz) 125 MHz Un-assigned

2500 MHz 2565 2690

55 MHz unassigned 55 MHz unassigned

15 MHz FDDSentech

20 MHz TDDSentech

15 MHz TDDWBS

15 MHz TDD(BEM restrictions)

2500 2555 2570 2590 2605 2620 2675 2690

13

Activity/deliverable Date

Key decisions made on combined licensing and in-band migration Mid-August 2011 (Critical path)

Consultation and negotiations with the incumbents completed By 30 August 2011 (Council)

Combined draft licensing framework approved – including

decision to Auction or Not, decision on Universal Service

Obligations and targets.

Mid-August 2011 (Approval by Council)

Consultation/ workshop on draft licensing framework (including

the Department of Communications and the Minister)September 2011 (Council)

Final licensing framework Mid-October 2011 (Approval by Council)

Approved terms of reference for a consultant to assist in

licensingBy 30 August 2011 (critical path)

Consultant to assist with the licensing process procured By 31 October 2011 (critical path)

Draft ITA approved and publishedMid-November 2011 (critical path)

(Approval by Council)

Public comments on Draft ITA and public hearingsMid-November to Mid-January 2011

(Council)

Final ITA published By end of January (critical path)

Licensing February and March 2012

Time TableTime Table

14

Scenario planning should allow parallel processes, reduce dependencies, mitigate uncertainties

Communication plan – to manage stakeholders and perceptions

Other key decisions to be made:– Auction, “beauty contest, or combination (proposal/

motivation to be tabled to Council)

– Proposed Universal Service Obligations and rollout targets

– Targets on new entrants and involvement of HDIs

Other issues to be considered as part Other issues to be considered as part of the frameworkof the framework