 | Issue: | Latin America 2012 |
| Article no.: | 5 | |
| Topic: | 4G Spectrum challenges in Latin America | |
| Author: | Cintia Garza | |
| Title: | Market Analyst | |
| Organisation: | Maravedis – Rethink | |
| PDF size: | 250KB |
About author
Cintia Garza is Analyst – CALA & 4GCounts Team Leader for Maravedis – Rethink. Cintia is the team leader of 4GCounts (www.4gcounts.com), the LTE and WiMAX Operator and Deployment Tracking Service, which covers the top 4G players of the industry. Her background experience includes interviews with Telecom Regulators around the world to feed Maravedis’ ClearSpectrum Licensing and Regulatory Database, and also continuous dialogues with 4G operators in the industry. She has developed a broad understanding of broadband wireless technologies, operator trends, and spectrum regulation globally. She has authored various landmark reports on LTE, 4G, WiMAX, Broadband Wireless and 4GCounts Quarterly Reports. Garza is regularly asked to speak at leading wireless events including 4GWorld, WCAI, WiMAX Forum Latin American Congress, etc. She speaks fluently English, Spanish and French.
Article abstract
Regulators hold the power to free up and re-farm spectrum, so that those with plenty of bandwidth and no customers (Multimedia analogue distributors) release spectrum in favour of those who have customers but no bandwidth (mobile operators). In Mexico, a technology-neutral scheme for re-farming the little used 2.6 GHz is considered. There are suggestions to release 700MHz only in rural areas where it is urgently needed for Mobile Internet, instead of waiting for releasing spectrum and country-wide auctions. Regulators are also debating channelization – the US system versus the Asia-Pacific Telecommunity’s (APT) specification and harmonisation (consecutive or interleaved bands). The issues are not easy, but given the lead time for reclaiming and auctioning spectrum, regulators need to get their act together very soon.
Full Article
The greatest concerns today are availability of spectrum, and harmonization of frequency bands within a specific region (Americas, Europe, APAC, etc.). There are several frequencies used for LTE in Latin America (450MHz (Brazil), 700MHz, 1.7GHz, 2.1GHz, and 2.6GHz). Many countries in the Americas are interested in the re-farming, reallocating and harmonizing 700MHz and 2.6GHz spectrum for mobile services. However, regulatory bodies are facing many challenges in freeing up this spectrum and making the transition from broadcasting (analogue) to mobile (digital) use. TV stations are gradually abandoning the spectrum, but not at a fast enough rate to supply the rapidly increasing demand for mobile services. Therefore, regulators have to devise incentive schemes that will persuade broadcasters to give up the spectrum they have.
In Mexico, the Telecommunications Federal Commission (COFETEL) has already announced its intention to auction the 700MHz for digital dividend. In Latin America, Puerto Rico became the first country to utilize this spectrum for the provision of advanced wireless services. Other countries that are in the process of liberating this spectrum and make available for LTE use include Argentina, Colombia and Uruguay. In Mexico the government is yet to decide whether to make available 60MHz or 90MHz in this frequency band. In previous consultations, Mexican mobile operators (Telcel, Telefonica, Iusacell and Nextel) have shown interest in the 1.7/2.1GHz and 700MHz frequency bands for mobile services, but not in the 2.6GHz band. In our opinion, Mexican mobile operators should follow in the steps of mobile operators in the United States (AT&T, Verizon, T‐Mobile), which are launching 4G services in the 1.7/2.1GHz and 700MHz frequency bands.
The propagation characteristics of 2.6GHz make it an attractive band for mobile broadband in most countries around the globe, but Mexico restricts it to only fixed/nomadic services, not mobility services. As a result, the major owners of these bands, MVS Mexico and Ultravision, cannot fully benefit from deploying true 4G networks, neither LTE nor WiMAX (e.g. Clearwire in the USA). At present, the Mexican government has not decided whether or when there might be a spectrum re-farming of the 2.6GHz to allow it for mobile broadband services. This may eventually happen in Mexico with a new regulation that will re-allocate it under a technology-neutral scheme in which mobile WIMAX or LTE can be deployed.
Countries in Latin America are following developments in Mexico closely as they consider their own course of action. Uruguay and Colombia, for example, have taken the first step towards re-farming bands – both countries having decreed that 700MHz will be used for mobile broadband services, with auctions expected in 2012 and 2013 respectively. Erasmo Rojas, 4GAmericas Director for Latin America and the Caribbean said at the 4GAmericas Analyst Forum 2011: “One major issue is that in Latin America the 700MHz spectrum used in TV analogue channels is having very low usage in rural areas where it is most needed for mobile internet access. Sometimes regulators want to have all the spectrum cleared throughout the entire country before they auction it. However, we think that the real imminent need is to release 700MHz in rural areas. Why don’t you release initially spectrum in rural areas where no interference is present, while you wait for the switchover from analogue to digital in urban areas? Although not many regulators agree, some of them are considering it as an alternative.”
At the same time digitalization processes are going on in Latin America, regulators are debating the channelization and other technical issues. Although the US implemented a very particular channelization scheme, most Latin American countries are persuaded to follow the Asia-Pacific Telecommunity’s (APT) specification, a Digital Dividend band plan, which advocates the allocation of 2×45MHz of paired spectrum at 698–806MHz. This is because they think it makes a more efficient use of spectrum. It is widely known that there is still no abundance of available equipment for the 700 MHz band with the APT specification. However, digitalization will still take a while in LATAM, so they are in no hurry. At least Colombia and Mexico have already decided in favour of APT.
APT specification:
• 2 x 45 MHz FDD (703-748 and 758-803)
• 10 MHz separation (748-758)
• Lower guard band of 5 MHz (698-703)
• Upper guard band of 3 MHz (803-806)
According to Lester García, Senior Regulatory Advisor for Maravedis, it will be difficult to separate the 700 Mhz from rural areas than from urban: “Latin America still has a lot of rural/communitarian radio stations, some not even licensed transmissions, so regulators will have to clean up that part of the spectrum first. Secondly, licenses might be at a national level, so they will also need to implement legal procedures to make those changes. However, many holders of the 700 MHz will not agree before there is a complete framework for the situation after the switch over”- he said – “The 2.5 has been a band used for rural internet and other services, for instance in Peru and Colombia, some other places too. Mexico is thinking of re-farming 2.5 for that purpose.”
In Brazil, 2.6GHz has been used by MMDS (Multimedia Distribution Services) service providers for many years, but just recently, in June 2012, it has been allocated for mobile broadband. In general, MMDS operators in Latin America have a lot of spectrum and not many customers, while mobile operators have a lot of customers and not much spectrum. Regulators are starting to realize how to work out arrangements to get the best use of spectrum for society as a whole.
Another major issue is the spectrum harmonization of both 2.6GHz and 700MHz. In the US, the 2.6GHz spectrum is currently dominated by one entity (Sprint Nextel and its subsidiary Clearwire), which controls as much as 120 – 150MHz of this spectrum in some markets. Therefore, the extent to which the majority of this band is used to deliver broadband wireless services is subject to the financial strengths and business success of only one operator. The 2.6GHz spectrum in the US is arranged on a contiguous rather than interleaved basis, which is organized around eight 16.5 MHz channel blocks, paired with 6 MHz channels. Both FDD and TDD channelization plans are permitted within the band.
In Canada and Brazil, the 2.6GHz band is aligned with ITU option 1. Brazil currently allocates the 2.6GHz spectrum for primary use by MMDS. There is still controversy surrounding how the 190MHz available in the 2.6GHz band plan should be divided between paired and unpaired spectrum suited to FDD and TDD modes of operation respectively across several countries.
Some of the major spectrum issues are related to the strong emphasis of regulators on encouraging competition and new entrants, rather than looking at the common public needs in general. For example, in Brazil, MMDS operators have long been restricted in deploying mobile WiMAX networks, in order to avoid competition with 3G players who had heavily invested in their 3G licenses. The regulator has finally now acknowledged the need for spectrum for mobile broadband and has taken steps to supply it. Another major challenge for operators in Latin America, are the rigid spectrum caps that most regulators are imposing. Latin America has some of the tightest spectrum caps in the world, at an average of 50-60MHz of spectrum per operator in most countries, while operators in Europe hold an average 92MHz and Verizon in the US has 96MHz.
Today, the focus of regulators should be not only to have a healthy balance of competition, but also on making sure that current players can address all the needs of the market. Regulators in developing markets in Latin America should look at what the regulators in developed countries are doing to foster a more healthy telecommunications environment. It is worth mentioning three major steps that all regulators should follow:
1) Start re-farming analogue to digital spectrum as soon as possible to address today’s rapidly increasing demand for mobile broadband,
2) Take back unused spectrum from carriers who are not fully utilizing it and reallocate it wisely,
3) Do not allocate too much spectrum or an entire band in the hands of only one player. The current situation in the United States, where much of the 2.6GHz band is controlled by a single company, is one that other countries should take pains to avoid.
