UMTS - Regulatory Strategies
Klaus Olms
olms
olms@bmwi.bund.de
@bmwi.bund.de
Federal Ministry of Economics and Technology
Bonn, Germany
Séminaire
Séminaire TIC
TIC // IMT
IMT-2000
-2000
Abidjan,
Abidjan, Côte
Côte d’Ivoire,
d’Ivoire, 9-12
9-12 Septembre
Septembre 2002
2002
11
UMTS
UMTS Forum
Forum -- 2002
2002
Main evolution into 3G
Existing Spectrum
GSM
GSM/GPRS
GSM/GPRS/EDGE
CDMA2000 1X
CDMA2000 1XEV
TDMA/
CDPD
cdmaOne
New Spectrum
WCDMA
2G
First Step into 3G
3G phase 1
Evolved 3G
≤ 28.8 kb/s
64 - 144 Kb/s
384 Kb/s - 2 Mb/s
384 Kb/s - 10Mb/s+
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UMTS
UMTS Forum
Forum -- 2002
2002
Spectrum planning
ITU
Identif.
900
IMT-2000
Europe
Africa
China
GSM-900
Cellular
PDC
Japan
US/Canada
Cellular
GSM
1000
1700 1800
1900
IMT-2000
IMT
- 2000
IMT-2000
IMT
- 2000
GSM 1800
GSM-1800, PCS
DECT
800
2000 2100
2200
MSS
IMT-2000 MSS
IMT-2000 MSS
IMT-2000 MSS
IMT-2000
MSS
IMT-2000 MSS
IMT-2000MSS
IMT-2000 MSS
PHS
PCS-1900
MSS
Reserve
2500
2600 2700
IMT-2000
NOTE: Also 2300-2400 MHz
possible for IMT-2000 in China
MSS
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UMTS
UMTS Forum
Forum -- 2002
2002
The basis for regulation
The UMTS Forum recommends that the
general competition law framework should
be used for UMTS in conjunction with the
existing European and national
telecommunications legislation. It is
unnecessary to overlay the ordinary criteria
of competition law with any additional rules
when sufficient competition has been
established in the telecom field.
Source: UMTS Forum Report #4
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UMTS
UMTS Forum
Forum -- 2002
2002
Important
Licensing conditions
4 Spectrum price and auctions
4 Coverage and roll-out obligations
4 Rules for sharing of facilities and
infrastructure
4 Rules for national roaming
4 GIobaI circulation of terminals
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UMTS
UMTS Forum
Forum -- 2002
2002
Spectrum price
4 Spectrum must be available at the right
price. Large initial down-payments for
spectrum will adversely affect the growth of
3 G services
4 Yearly fees give better stimulus to efficient
use than initial down-payments
4 Intensive use of the spectrum gives better
total value for society than high license fees
Source: UMTS Forum Report #3
66
UMTS
UMTS Forum
Forum -- 2002
2002
3G
3G VALUATIONS
VALUATIONS IN
IN CONTEXT
CONTEXT
(some
(some examples)
examples)
$360
$360per
perpop
pop
Germany
Germany
80
80
20
20yrs
yrs
~8.300€
~8.300€bn
bn
UK
UK
Price per
per license
license (€
(€ bn)
bn)
Price
US/New
US/New York
York
70
70
20
20yrs
yrs
~7.560€
~7.560€bn
bn
60
60
SPAIN
SPAIN
20
20yrs,
yrs,can
canbe
beextended
extended
for
foranother
another10
10yrs;
yrs;
~131
~131€€mil
mil++ Annual
Annualfee
fee
50
50
40
40
Netherlands
Netherlands
20
20
00
20
20yrs
yrs
~150€
~150€mil
mil
20 yrs
~619€
~619€mil
mil
Portugal
Portugal
30
30
10
10
FRANCE
FRANCE
Belgium
Belgium 20
yrs
15
15yrs,
yrs,~540€
~540€mil
mil
Italy
Italy
15
15yrs,
yrs,~100€
~100€mil
mil
15
15yrs
yrs
~2.560
~2.560€€mil
mil
SWITZERLAND
SWITZERLAND
15
15yrs,
yrs,~33.4€
~33.4€ mil
mil
SWEDEN
SWEDEN
Finland
Finland
15
15yrs,
yrs,~0.011€
~0.011€mil
mil
20
20yrs,
yrs,nil
nil€€
DEC-99
DEC-99
APR-00
APR-00
JUL-00
JUL-00 AUG-00
AUG-00 OCT-00
OCT-00
DEC-00
DEC-00
MAR-01
MAR-01 MAY-01
MAY-01
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UMTS
UMTS Forum
Forum -- 2002
2002
Licence prices and country size
60
UK
Euros/pop
50
D
40
30
20
10
0
NL
DK HK
N
CH AUS
NZ
0
20
I
E
Pol
40
F
Kor
60
80
100
Population in millions
88
UMTS
UMTS Forum
Forum -- 2002
2002
Categories of Licence holders
100%
90%
80%
70%
60%
50%
40%
Local players
Beauty
contest
Auction
Regional players
Global players
30%
20%
10%
0%
Small country Big
Small country Big
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UMTS
UMTS Forum
Forum -- 2002
2002
Signs of crisis
4 Operators debt burden increases.
Big operators capital expenditure was increased
more than 50% 2000-2001.
4 Free Cash Flow down 90% in two years.
4 Credit ratings for big European operators down 3-4
steps.
4 Financial regulators concerned with the exposure of
some banks to the telecom sector.
4 Downward trends in voice ARPU make growth of
data ARPU necessary.
10
10
UMTS
UMTS Forum
Forum -- 2002
2002
Announced & Expected
WCDMA Launch Dates
M1
SK
Vodafone
KT
J-Phone
Vodafone
CSL
NTT DoCoMo
H 3G Austria
Eircell
mmO2
Orange
ONE
IPSE
Hutchison Telecom
Omnitel
H3G
SFR
Mobitel
Europolitan
HI3G
Libertel
Sonera
Tele2
KPN
Viag
Mobilcom
E-Plus
Telefonica Vodafone
OniWay
Manx
Hutch 3G UK
Vodafone
2001
2002
KPN
Telfort
Proximus
T-Mobil
Group 3G
mmO2
2003
2004
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11
UMTS
UMTS Forum
Forum -- 2002
2002
Coverage and Roll-out
4 Roll out of the 3 G networks should be done
according to market demand
4 Coverage obligations must be linked to level
of network service capability
4 Ubiquitous coverage have to be achieved by
satellite systems
Source: UMTS Forum Report #4
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12
UMTS
UMTS Forum
Forum -- 2002
2002
How did it turn out ?
4 Most countries require the same speed
for roll-out, 50% in 4 - 5 years. A few
require significantly more.
4 Site acquisition an increasing problem.
4 Unclear how far co-operation may go,
either via sharing or national roaming.
Rules not easy to change in auction
countries.
13
13
UMTS
UMTS Forum
Forum -- 2002
2002
Sharing of facilities
and infrastructure
4 Sharing of facilities can give a rapid
deployment of networks and introduction of
services
4 Sharing of network infrastructure may
conflict with the goal of infrastructure
competition
4 Sharing should be commercial; mandatory
sharing is normally not acceptable
Source: UMTS Forum Report #4
14
14
UMTS
UMTS Forum
Forum -- 2002
2002
Infrastructure sharing in D
4Full legal control of the operator‘s network
4Sites, masts, antennas, cables & combiners shared
4SSCs shared: more than one Node B in a single SSC
4Logically (instead of physically) distinct Node Bs, but...
4Logically (instead of physically) distinct RNCs, but...
4No shared use of core network (MSC)
4No transitional arrangements
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15
UMTS
UMTS Forum
Forum -- 2002
2002
Logically distinct Node Bs
4Independent control of own Node B, no
spectrum pool
4No exchange of competition/customer data
4Own seperate operational/maintenance
infrastructure
4Additional own Node Bs
4no regional splitting of coverage, overlaps
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16
UMTS
UMTS Forum
Forum -- 2002
2002
Logically distinct RNCs
4Independent control of usage-sensitive cell
load & power
4No exchange of competition/customer data
4Own seperate operation/maintenance
infrastructure
4Additional own RNCs
4Connection of own Node Bs, operated solely
by him, to own logical RNC
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17
UMTS
UMTS Forum
Forum -- 2002
2002
National roaming
4 National roaming may be a way to achieve
terrestrial coverage of unprofitable regions
4 Licence conditions should allow commercially negotiated roaming agreements, if
infrastructure competition is maintained
4 National roaming should only as an
exception be mandatory. It can during a
transitionally period help new operators to
establish a market
Source: UMTS Forum Report #4
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18
UMTS
UMTS Forum
Forum -- 2002
2002
Why is co-operation wanted?
4 Operators in general have a high debt
burden, negative cash-flow and
decreasing market capitalisation.
4 Environmental concerns make site
acquistion more complicated.
4 Co-operation between operators may
4 facilitate deployment of network,
4 decrease investment, and
4 increase coverage and market size.
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19
UMTS
UMTS Forum
Forum -- 2002
2002
Global circulation of
terminals
4 The right to carry and use personal
terminals, “global circulation”, is very
important for many users.
4 There are very few, if any, technical
problems with the circulation of GSM
terminals.
4 The ITU has decided on a regulatory
framework for global circulation. This should
be the basis for national rules.
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20
UMTS
UMTS Forum
Forum -- 2002
2002
What have we learned so far?
4 Do not take out too much money to the
state early in the process;
4 Set realistic roll-out and coverage
obligations;
4 Define rules for sharing of infrastructure
and for national roaming;
4 Set national environmental rules;
4 Service development is key to market.
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UMTS
UMTS Forum
Forum -- 2002
2002
What can be done
by governments?
4 Use the spectrum bands according to IMT-2000;
4 Allow co-operation between operators in rural areas
4
4
(network sharing, national roaming);
Simplify the process of site acquisition and agree on
harmonized environmental conditions;
Support the creation of new advanced mobile
services ( e.g. e-government, e-learning, ecommerce);
4 Support global circulation of terminals
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UMTS
UMTS Forum
Forum -- 2002
2002
What is the UMTS Forum?
4A
A global
global organisation
organisation with
with over
over 200
200 members
members from
from more
more
than
than 40
40 countries:
countries:
4 Mobile,
Mobile, fixed
fixed and
and satellite
satellite operators
operators
4 suppliers
suppliers
4 consultants
consultants
4 regulatory
regulatory bodies
bodies
4 IT
IT and
and media
media content
content providers
providers
4 Goal:
Goal:
4 Successful
Successful global
global commercial
commercial deployment
deployment of
of UMTS
UMTS // 3G
3G services
services
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UMTS
UMTS Forum
Forum -- 2002
2002
What are the aims?
The
The Forum
Forum works
works to
to identify
identify common
common interests
interests and
and to
to
promote:
promote:
4 Realisation
Realisation of
of the
the full
full vision
vision of
of 3G
3G mobile
mobile services
services
4 AA sound
sound regulatory
regulatory framework
framework for
for the
the introduction
introduction of
of
UMTS/IMT
-2000
UMTS/IMT-2000
4 Timely
-2000
Timely availability
availability of
of radio
radio spectrum
spectrum to
to support
support UMTS/IMT
UMTS/IMT-2000
4 AA clear
clear understanding
understanding of
of future
future market
market opportunities
opportunities
4 Guidance
Guidance towards
towards Standardisation
Standardisation Bodies
Bodies
4 Increase
Increase awareness
awareness amongst
amongst investment
investment community
community
4 Convergence
Convergence and
and mutual
mutual understanding
understanding between
between all
all relevant
relevant
industries
industries
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UMTS
UMTS Forum
Forum -- 2002
2002
UMTS Forum Reports & Papers
Latest Reports (e.g. 3Q2001 to 2Q2002)
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
4
UMTS
UMTS in
in aa Converging
Converging Network
Network Environment
Environment (No
(No 14)
14)
Key
Key Components
Components for
for 3G
3G Devices
Devices (No
(No 15)
15)
3G
3G Portal
Portal Study
Study (No
(No 16)
16)
UMTS
UMTS Third
Third Generation
Generation Market
Market Study
Study Update
Update and
and Forecast
Forecast (No
(No 17/18)
17/18)
Benefits
Benefits and
and drawbacks
drawbacks of
of introducing
introducing aa dedicated
dedicated TLD...
TLD... (No
(No 19)
19)
Charging,
Charging, Billing
Billing and
and Payment
Payment Views
Views on
on 3G
3G Business
Business Models
Models (No
(No 21)
21)
Public
Public WLANs
WLANs &
& 3G
3G Business
Business Revenues
Revenues (No
(No 22)
22)
UMTS/IMT-2000
UMTS/IMT-2000 in
in Central
Central &
& South
South American
American Countries
Countries (No
(No 23)
23)
Reports under study (2002) e.g.
4
4 (more)
(more) Wireless
Wireless LAN
LAN Studies
Studies (expected
(expected 3-4Q2002)
3-4Q2002)
4
4 Research
Research on
on Customers
Customers Behaviour
Behaviour (expected
(expected 4Q2002)
4Q2002)
More
4
4 Position
Position &
& White
White Papers
Papers on
on different
different subjects
subjects (ongoing)
(ongoing)
25
25
UMTS
UMTS Forum
Forum -- 2002
2002
Thank you for your attention !
Visit the UMTS Forum website
www.
umts-forum.org
www.umts-forum.org
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UMTS Forum
Forum -- 2002
2002