Combine Licensing of 800 MHz and 2.6 GHz Band Facilitating Key Decisions

Purpose 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

Main issues of consideration 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

What socio-economic issues to be considered? 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 is the motivation for combined licensing of 800 MHz and 2.6 GHz? 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

Why it makes sense to license 800 MHz now? 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

What about other BWA or IMT spectrum? (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

Preferred harmonized frequency arrangements for 800 MHz and 2 Preferred harmonized frequency arrangements for 800 MHz and 2.6 GHz bands 790 FDD1 FDD2 FDD3 FDD4 FDD5 FDD6 11 MHz 796 801 806 811 816 821 791 832 837 842 847 852 857 862 Downlink Uplink (70 MHz) FDD Uplink (50 MHz) TDD (70 MHz) FDD Downlink 2500 MHz 2570 2620 2690

Why use preferred harmonized frequency arrangements? 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.

How to ensure preferred harmonized arrangements? What are implications? 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

In-band migration in 800 MHz 790 FDD1 FDD2 FDD3 FDD4 FDD5 FDD6 11 MHz 796 801 806 811 816 821 791 832 837 842 847 852 857 862 Downlink Uplink One leg of Neotel’s current assignment 790 FDD1 FDD2 FDD3 FDD4 FDD5 FDD6 11 MHz 796 801 806 811 816 821 791 832 837 842 847 852 857 862 Downlink Uplink Neotel proposed assignment There is another alternative for Neotel that can be explored in parallel

In-band migration in 2.6 GHz band Sentech (50 MHz) 125 MHz Un-assigned 2500 MHz 2565 2690 WBS 55 MHz unassigned 15 MHz FDD Sentech 20 MHz TDD 15 MHz TDD WBS (BEM restrictions) 2500 2555 2570 2590 2605 2620 2675 2690

Activity/deliverable Time Table 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 licensing By 30 August 2011 (critical path) Consultant to assist with the licensing process procured By 31 October 2011 (critical path) Draft ITA approved and published Mid-November 2011 (critical path) (Approval by Council) Public comments on Draft ITA and public hearings Mid-November to Mid-January 2011 (Council) Final ITA published By end of January (critical path) Licensing February and March 2012

Other issues to be considered as part of the framework 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