ITU Arab Regional Development, 17th September 2012 Impact of the spectrum management on regional mobile broadband development: challenge and opportunities Wladimir Bocquet Senior Director Global Spectrum Policy GSM Association We all know that mobile broadband demand is growing rapidly – faster that we thought possible even a few years ago. The rise of touch screens and smart phones has changed the way people use the internet. The idea that everyone would need a laptop to access broadband content via dongles has changed. Whilst it is clear we need more spectrum, that is not the whole story. We need the right type of spectrum too. Contiguous blocks of sufficient size will be required for as long as we have analogue front end devices in phones/tablets. This will need to feed into the decision process that will end with new IMT identifications at WRC15 (I hope!). The growth predictions that we hear so often is a credit to all who make these technologies work but now we face a ‘nice’ problem…..you (or we as an industry) have made them too popular, that people have come to rely on them for their communication and entertainment as well as business, that data running across our mobile networks is running away from us too! I’d like to take a few moments to share with you some figures on where this growth is coming from, what the industry is currently trying to do to cope and after the WRC-12, what we really need to achieve to ensure longevity in our industry.

What’s at stake for mobile industry? Data Explosion: Rapid changes in mobile service provision such as usage trends and number of important social and behavioural changes have led to previously unpredicted patterns of data consumption amongst mobile users. Mobile data traffic is still expected to significantly increase in the coming five years Spectrum Resource: Spectrum is the lifeblood of the mobile industry. The amount of spectrum made available and the regulatory conditions on which it is made available fundamentally drive the cost, range and availability of mobile services. Spectrum is a scarce resource and public State property Vital input to many industries Radio waves do not stop at national borders cross border issues have a significant role in spectrum management Spectrum Policy: Choosing the appropriate spectrum policy licensing framework to facilitate the large investments required in rolling out networks and introducing updated technologies and new services

Agenda Data Traffic for Mobile Broadband Spectrum Management for Mobile Broadband Global Benefit of Releasing Harmonised Spectrum for Mobile Broadband

Mobile global data traffic Estimates data traffic based on multiple sources The growing adoption of data services has become the major source of traffic since 2010 On the Analysis Masson forecasts , mobile traffic is expected to grow at a CAGR (Compound annual growth rate) of 42% to reach 28 000 PB per year in 2015. Source: ITU-R M.2243 Report

Mobile global data traffic Comparison of ITU-R M.2072 with Current Data The ITU-R M. 2243 Report concludes “The current data traffic (in year 2010) is more than 5 times greater than some of the estimates for Report ITU-R M. 2072 (WRC-07). “ “Actual traffic being experienced by some operators today (year 2011) is even greater than some of the 2020 forecasts given in Report ITU-R M.2072.[…].” Source: ITU-R M. 2243 Report This Report clearly indicates that the ITU-R should consider this increasing mobile broadband traffic demand.”

Factors impacting traffic forecast Diversity of devices Mobile traffic (PB per year) by device type Tablet generates 500 times as much data traffic as a basic mobile phone Smartphones generate, on average, around 50 times more data per month than a basic phone Average modem/dongle use, with laptop users generating as much as 1300 times that of a “standard” 3G phone Source: ITU, Analysys Mason  Mobile data usage is heavily device-dependent

Factors impacting traffic forecast Number of devices 2020 12 Billion Mobile Connected Devices 2011 6 Billion 24 Billion Total Connected Devices 9 Billion Source: Machina Here we have research company Machina predicting that by 2020 we will have 24 billion connected devices of which 12 billion will be mobile….that growth is staggering but actually real if we look at how we have predicted data growth in the past….. Mobile world has reached another milestone with Internet becoming increasingly mobile. Ericsson, based on industry information, estimates that the number of mobile subscription will reach 9 billion end of 2017 Spectrum is a key resource/element for Mobile Broadband development

Licensing to support Mobile Broadband GSMA has commissioned a report that takes an in-depth look at spectrum licensing best practices and real-world case studies Licensing to support the mobile broadband revolution http://www.gsma.com/spectrum/lic ensing-to-support-the-mobile- broadband-revolution-report/

Meeting the growing demand Freeing up spectrum resources Identifying spectrum rights allowing provision of additional spectrum capacity Enabling flexible/technology neutral use of spectrum (e.g UMTS/LTE at 900/1800 MHz) Publishing a road map of the planned release of additional spectrum bands to maximise overall benefits from the use of spectrum taking into account the benefits of international harmonisation aligning spectrum rights with the internationally harmonised mobile spectrum bands Removing service and technology restrictions in existing mobile spectrum usage rights to enable operators to choose when to deploy mobile technologies that can technically co-exist. However, Operators themselves are likely to be best placed to determine the speed of migration particularly recognising that 2G services are likely to remain important for the next 5 to 10 years.

Meeting the growing demand Harmonisation Crucial to secure the same allocation and band plan to support harmonisation Leverage from the existing deployment and maximise the economy of scale Facilitate innovation and roaming Reduce the device costs by limiting the complexity of the radio design and the cost of mobile hardware helping managing cross- border interference

Maximise the harmonisation Digital Dividend: 790 – 862 MHz Support the following band plan with 5MHz block size for LTE technology Favour contiguous 2x10 MHz per operator to fully leverage on Mobile Broadband technology Maximise the harmonisation Leverage on the economy of scale (facilitate the access) Facilitate the cross-border coordination 791 832 862 FDD downlink FDD uplink Guard band 790 Duplex gap 821 30 MHz (6 blocks of 5 MHz)

Maximise the harmonisation 2.6 GHz band: 2500 – 2690 MHz Fixed vs. flexible band plans Adopting a fixed band plan is best and lead to global harmonization in the use of the band Clear from both prior auctions and operator announcements that the ITU Option 1 band plan is preferred In addition, The Arab states markets should preferably adopt global band plans The adoption of ITU Option 1 for 2.6 GHz will yield large economies of scale in both network equipment and handsets 2500 2620 2690 FDD uplink FDD downlink TDD 2570

Meeting the growing demand Spectrum & Infrastructure Sharing Aspects Regulatory framework should facilitate operator’s engagement in voluntary infrastructure and/or spectrum sharing. Regulatory framework should remove restrictions on operators negotiating and concluding agreements governed by private law on sharing in bands dedicated to Mobile Broadband.

Meeting the growing demand Licensing framework to support investment Stability of the overall licensing framework facilitates investment announcing in advance a long term plan for reform of the spectrum and operating licensing framework facilitating international harmonisation so that equipment and devices use the same frequency bands to support international roaming and enable the realisation of scale economies in manufacture publicly setting out the criteria and process to be followed in licensing decisions and including public written consultation in advance of key decisions being made

Meeting the growing demand Assignment and renewal of licenses Importance to set out approach to licence renewal in advance of the expiry of the licence At least 2 to 4 years in advance Avoid network investment being postponed Publish the criteria to be used to assess renewal as well as the terms and conditions to be applied to the renewed licence

Study on socio-economic benefits Kingdom of Saudi Arabia GSMA performed a study case on the benefit to release internationally harmonised spectrum band plans at 2.6GHz and at 800MHz. Highlight considerable socio-economic benefits from the release of harmonised spectrum for use by mobile operators to deliver next- generation mobile broadband service  Key opportunity – broadband improves GDP and job growth….. For the full report, please visit: www.gsma.com/spectrum/spectrum-resources/spectrum-research/socio- economic\_benefit_of_allocating_harmonised_spectrum_in_Kingdom_of_S audi_Arabia

Impact on Mobile Broadband subscriber Socio-economic benefit Allocating harmonised mobile broadband spectrum in the Kingdom of Saudi Arabia (1/3) Impact on Mobile Broadband subscriber A delay in spectrum assignment of 5 years would reduce the expected number of mobile broadband subscribers to 20 million by 2020 and to 47.5 million by 2025.

Impact on GDP (Gross domestic product) growth Socio-economic benefit Allocating harmonised mobile broadband spectrum in the Kingdom of Saudi Arabia (2/3) Impact on GDP (Gross domestic product) growth The impact of spectrum release on GDP in KSA [Source: Analysys Mason, 2012] In 2020, the additional GDP resulting from enhanced growth in mobile broadband subscriptions would amount to SAR52.4 billion, if spectrum is released by 2013. A five-year delay in assigning the spectrum would reduce this gain to SAR9.3 billion.

Socio-economic benefit Allocating harmonised mobile broadband spectrum in the Kingdom of Saudi Arabia (3/3) Impact on job growth The impact of spectrum release on employment in KSA [Source: Analysys Mason, 2012] In 2020, the additional employment resulting from enhanced growth in mobile broadband subscriptions would amount to 424 000 jobs, if spectrum is released by 2013. A delay in spectrum assign of five years would reduce this gain to 75 000.

Summary Meeting the growth in demand for mobile services Data demand continues to grow Additional spectrum being made available and ensuring that the spectrum goes to the use and users which will maximise its benefits to society Facilitating international harmonisation to support roaming and enable scale economies to lower the cost of equipment Licensing issues are critical Removing unnecessary restrictions on the use of spectrum including allowing for new Mobile Broadband technologies Ensuring a fair and predictable licensing environment facilitates the investments required to take full advantage of a country’s spectrum resources 20