3G Spectrum Refarming to Manage the Costs of Customer Expectations

In recent years WCDMA subscriptions have grown apace: from 18 million at the end of 2004 to 170 million at the end of 2007. ABI Research forecasts that figure to rise to 740 million by the end of 2013.

“WCDMA is on its way towards proven success,” says Jake Saunders, ABI Research vice president, “but there are still challenges and hurdles to overcome. In particular, operators find that expanding WCDMA coverage in the 2100 MHz band into low-density urban and rural areas is very costly in the current competitive environment.”

Spectrum refarming poses challenges for operators and regulators:

• Existing GSM 900 MHz infrastructure can introduce interference into UMTS 900 MHz networks, so guard band and transitional zones may be needed;
• Operators may need to carefully manage voice and data traffic loads between the 900 and 2100 MHz bands to ensure there are no dropped connections resulting in loss of revenue;
• Not all operators have 900 MHz spectrum; therefore refarming of GSM spectrum bands that are coming to the end of their license terms is needed to ensure that they are allocated to everyone fairly.

Some of the benefits of spectrum refarming are:

• Radio wave propagation loss is less, so fewer base stations are required;
• Improved in-building penetration: over 70% of phone calls are now made indoors;
• Greater likelihood of rural coverage. Rural communities do not want to be separated by the “3G Divide.”

National and regional regulators and standards bodies are acting to modify mobile phone service legislation to allow the deployment of WCDMA access in the 900 MHz band. WCDMA has achieved a reasonable foothold in most markets, but the economics of deployment need to be addressed. Competition and lower than expected returns on investment are decelerating the rate of additional coverage.

“Operators are trying to evolve their services to meet the needs of their customers, both corporate and consumer,” adds senior analyst Nadine Manjaro. “Market conditions, and the nature and range of services that operators thought they would be offering to their 3G customers, have changed as well. Deploying WCDMA in the 900 MHz band helps operators to be more versatile.”

Posted to the site on 12th May 2008

Posted to: www.cellular-news.com/story/31097.php