ERG-RSPG Joint Session February 27, 2008 G öteborg

1. RSPG ERG Joint meeting Gerard Pogorel pres 080303 ERG-RSPG Joint SessionFebruary 27, 2008Göteborg « Broadband wireless as an alternative infrastructure? A prospective overview of technologies, markets & regulation » Gérard POGOREL Professor of Economics TELECOM ParisTech (ENST) <gerard.pogorel@telecom-paristech.fr>

2. Wireless broadband as an Alternative Infrastructure?Areas of tentative analysis Technical functionalities, performances and services, as compared to fixed Telecom markets definition and competition Industry structure considerations Regulation considerations

3. 1. Roadmaps: Data rates=Mobile & Fixed technologies Source: IDATE

4. 1a. Wireless roadmaps: UMTS -WCDMA / HSPA / LTE

5. 1b. Wireless roadmapsCDMA 2000-UMB Source: QUALCOMM

6. 1c. Wireless roadmaps+ WiMax

7. Question marks : Wireless • LTE: 2009-10 • WiMax: 30-70 megabits 60km • UMP • Which is fastest, most efficient, and most cost-effective. • Some vendors deny mobile voice efficiency to WiMax • Uplink Data rate

8. Question marks : Fixed • Fiber: Slow start (2007) • Will it happen, when and how ?

9. Wireless vs. Fixed: functionalities • If functionnally equal… • Mobility wins? Lessons from voice telephony: depends where you start from • Developed countries: hand in hand • Emerging countries go wireless

10. Wireless broadband as an Alternative infrastructure?Areas of tentative analysis Technical functionalities, Telecom markets definition and competition Industry structure Regulation

11. Extension of Worldwide Broadband Wireless

12. Wireless & Fixed: networks • Converged offers • More Potential technical complementarities • Femtocells accelerate switch to voice on mobile; but need fixed broadband to connect femtocells back to core mobile networks (Source: Analysys, Idate) • potential geographic complementarities

13. Wireless, Fixed Compared 2008 Tests France Feb 2008

14. Wireless vs. Fixed: terminals • The “3 screens”: TV+PC+Mobile • Different in Size, versatility, QoS, costs • Are they • Substitutes, or • Substitutes & complements

15. Wireless as an alternative infrastructure: the voice telephony market analogy ETNO Reflection Document RD274 (2008/01)?? Wireless broadband to be considered an alternative infrastructure when wireless voice is not, at least in most countries « …obviously different services both in terms of utility and of production » 2 different markets, except in those countries where F&M are already substitutes: SEE ARCEP fixed telephony consultation document Feb 20

16. F & M literature see definition of relevant marketsconvergence of termination rates literature • Technical dimension of Fixed & Mobile market distinction (ETNO ibid.): • Switching and signalling sytems of mobile networks more complex than fixed • Geography of transmission links different: Mobile more costly • Capacity costs more traffic sensitive for mobile (does it matter)

17. An alternative infrastructure? • Fixed Broadband trend: up, differ from fixed voice, down • Relevant market test… • Not there yet, but… Analysys

18. Wireless Revolution • India 2007: • Internet connections via PC declined: Q1 9.27 million - Q2 9.22 million (Source: Telecom Regulatory Authority of India) • Mobile Internet expected to reach 200million users in 2010 (Source: Indian Cellular Assn)

19. Wireless broadband as an Alternative infrastructure?Areas of tentative analysis Technical functionalities Telecom markets definition and competition Industry structure considerations (vertical and horizontal integration), barriers to entry, bottlenecks Regulation

20. Industry structure considerations • Vertical and horizontal integration, barriers to entry • Bottlenecks (access, origination and termination) • How will the actors handle the development of fixed and wireless broadband?

21. Wireless broadband as an Alternative infrastructure?Areas of tentative analysis Technical functionalities Telecom markets definition and competition Industry structure Regulatory considerations

22. 4. The regulator’s Role • Providing a competitive environment for innovation under heavily uncertain conditions • Consumer interest • Level playing field

23. Converging services: similar sets of services to be offered on fixed and wireless… Converging regimes to be applied to Fixed and Wireless

24. Regulatory issues • Ex ante/ex post • Convergence • « bottlenecks regulation » • Access, Origination, Termination) • ?? access to radio spectrum: differences in licensing and authorisation regimes

25. 4.1. Legacy Spectrum issues/3G Licences price? An average value of23 EUR per pop An average value of10 EUR per pop(upfront payment only) A maximum value of106 EUR per pop An average value of3.2 EUR per pop A maximum value of164 EUR per pop Source: IDATE

26. What price level spectrum? • Current Price levels of WiMAX licenses in the 100s mil € • More reasonable and in line with use of limited resource • The easier spectrum access, the closer we get to a wireless alternative infrastructure

27. Timetable Estimation for Technologies Development Source: SPORTVIEWS-IDATE Network integration / Roll out & Commercial Launch Available SDR. Many experiments. Platforms capable to connect into WLAN (802.11) or UMTS (W-CDMA) networks, or to act as HDTV receiver. Wired remote upgrade in base stations from 2007. Mesh networks. Many experiments. MIMO. Prototypes. Pre-standard MIMO equipments are already available. MIMO applications will be part of the IEEE 802.11n High-Throughput standard which is expected in mid 2006 SDR: Full dynamic spectrum allocation from 2015. Antennas technologies: No previsions regarding wideband and reconfigurable antennas. SDR:Soft upgrades for mobile devices from 2011. Multiple standards in mobile devices (GPS, WiMAX, 3G, WiFi). Cognitive radio: Full dynamic spectrum allocation from 2015. 2002 2003 2004 2005 2006 2007 2008200920102011 2012 2013 2014 2015 2016 UWB: 50 models of UWB devices approved by the FCC since 2002. MIMO is expected to be deployed in commercial networks in the 2008 timeframe. Cognitive radio: Smarter cognitive radios techniques from 2010. (DECT already available ) USA: FCC approval in 2002 Europe: Power spectral density mask still debated. No dedicated frequency bands for ETSI, ECC and ITU. Harmonized standard in 2006 or 2007.

28. “Cluster” approach proposed in Digital dividend document…… • Given the strong interaction of frequency band, service application, and technology assessment, which constitute the basic foundation of the choice of a spectrum management regime, • we propose to operate those choices for each “cluster” of consistent and relevant band/service/technology

29. “Cluster” approach proposed in Nov 23 Digital Dividend document…… • …To be extended to fixed-wireless convergence • Alternative infrastructures: Neutrality of regulatory framework

30. Unleashing the innovative potential of Fixed & Wireless technologies by Fixed-Wireless “cluster” regulation • Technology: neutral • Usage Rights Definition: consistent • Licence/Autorisation Assignment Modes: coherent in EU -> Towards global authorisations/ licences ?

31. Spectrum regulation is key

32. Thank You