Wireless carriers request for more data capacity (USA)
Mobile operators in USA have spoken out at an industry conference regarding the limited data capacity and its long term effect on the industry. According to a report by Total telecom, executives from Verizon Wireless and T-Mobile USA said the future of data use, such as streaming video and photos, is at risk if more airwaves, or spectrum, aren’t put to use.
Verizon Wireless Chief Executive Dan Mead, speaking at the CTIA conference in New Orleans, said the largest carrier will be maxed out in some markets as early as next year and most others by 2015. The carrier is seeking regulatory authority to buy $3.9 billion worth of spectrum from a group of cable companies. He said that they will put this spectrum to use quickly.
T-Mobile’s CEO Philipp Humm said that they require more spectrum, more technologies to manage capacity. The carrier had hoped to be bought by AT&T Inc. last year as part of a $39 billion bid that was ultimately stopped by regulators. Humm said average monthly data use on T-Mobile’s network has risen more than five-fold over the past two years.
Verizon spectrum sale announcement impacts Clearwire share price (USA)
The share price of wireless broadband carrier Clearwire Corp., fell the most in the past five months, following Verizon’s announcement claiming that it plans to sell some of its spectrum, according to a report by BN.
As per the report, Clearwire fell 14 percent to $1.63 at 1:24 p.m., after retreating 20 percent for the biggest decline since Nov. 18. The Bellevue, Washington-based company’s shares have dropped 67 percent in the 12 months before today.
As per a company statement, Verizon plans to conduct an open-sale process for all of its 700 megahertz A and B spectrum licenses, covering dozens of major U.S. cities and some smaller markets.
Everything Everywhere appoints Morgan Stanley to sell spectrum (UK)
Mobile operator Everything Everywhere, which operates the T-Mobile and Orange brands in the U.K, has appointed Morgan Stanley to sell spectrum that could be used to roll out 4G mobile broadband services in the U.K. ahead of other operators, as reported by FT.
As per the report, Olaf Swantee, chief executive of Everything Everywhere, said that whoever they sell to has to be approved by the competition authorities. The test is someone who can provide genuine competition.
The spectrum could be priced at around US$634.7 million, and are likely to be of most interest to leading operators, although other large technology groups could also be interested.
Qualcomm receives ISP licence in India (India, USA)
Telecommunication corporation Qualcomm, has received an internet service provider (ISP) licence from India’s department of telecommunications (DoT), which will enable the company to launch broadband wireless access (BWA) services in the country, as reported by BS.
Qualcomm received BWA spectrum in four circles, including Delhi, Mumbai, Haryana and Kerala, at a cost of US$ 977 million, in the 2010 government auction. As per the report, the Telecom Disputes Settlement & Appellate Tribunal (TDSAT) had directed DoT to award the licence and allot spectrum within a week of Qualcomm paying the dues of its Indian partner, Tulip Telecom.
DoT had earlier rejected Qualcomm’s application, saying the company had made four nominees instead of one. The company had later made one nominee but DoT then demanded dues from Tulip, which again held up the application. The US company had challenged the rejection of its application in TDSAT.
Further, the report reveals that the companies are expected to launch BWA services (or 4G services) by the end of this year. The 4G services will offer much faster data speed than 3G.
AT&T lashes out at FCC over lack of spectrum (USA)
America-based wireless carrier AT&T is still fuming over the Federal Communications Commission’s (FCC) decision to reject the merger with T-Mobile. Randall Stephenson, CEO, AT&T, has lashed out saying that the FCC has made it abundantly clear that they will not allow significant M&A to help bridge these delays in clearing up new spectrum.
He said that that the primary issue for the company continues to be spectrum, and in the absence of options operators have taken the logical step to make smaller transactions to acquire the spectrum required to meet demand. However, he added, that even the smallest and most routine spectrum deals are receiving intense scrutiny from this FCC, often times taking up to a year and sometimes longer for these to be approved.
Stephenson also said that in such a capacity-constrained environment they will manage usage-based data plans, increased pricing and manage the speeds of the highest volume users, as these are all logical and necessary steps to manage utilization.
He added that the deployment of LTE does give them a 30-40 percent lift in network efficiency, but at current growth rates that equates to only a year’s growth in traffic. Thus, LTE is important but it is not the silver bullet in terms of capacity planning, and so they need to continue with their spectrum push in order to meet customer demand.
Airtel indicates rise in tariffs if additional spectrum is charged (India)
India’s leading telecom operator Bharti Airtel, has hinted at an increase in the call rates in the event that the government decides to charge the operators for the additional spectrum allocated to them.
According to reports, Sunil Mittal, Chairman, Bharti Airtel, has said that if the government decides in their wisdom that this industry needs to be taxed heavily in the form of high spectrum charges, whether it’s one time or recurring, that has to result in higher tariff regime.
As per sources, the Telecom Regulatory Authority of India (TRAI) has proposed a significant hike in the 2G spectrum price along with a charge for any additional spectrum to be allocated beyond the 6.2 MHz limit. Mittal said that if the government finally decides that they want higher charges both upfront and ongoing, the result of that should be higher tariffs.
He added that India already boasts of having the lowest telecom rates which have been affecting their profit margins, as cost of operations remains high. He said if there is going to be more load, that is going to put pressure on margins, which would mean the industry will have to force their hands to raise the tariffs to get the margins back.
Indian finance ministry proposes spectrum as collateral for loan (India)
The Indian finance ministry has proposed a new policy according to which mobile operators can use their spectrum holdings as collateral for a loan, as reported by ET. The move comes as an attempt to smoothen the functioning of the banking sector as well as help the telecom industry meet its credit requirements.
According to the report, the new policy will enable banks to seize an operator’s airwaves in the event of default or termination of mobile licences. Airwaves are leased to mobile operators by the government for a period of 20 years.
The banking industry has been reluctant to provide loans to mobile operators owing to depleting earnings and slow growth. Further, with the debt faced by the telecom sector mounting up to US$ 56 billion, the finance minister is hopeful that the new regulation will infuse the wireless industry with funds required by operators to increase their business.
Vodafone seeks to acquire additional spectrum and raise data revenue (India)
Vodafone India is reportedly planning to acquire additional spectrum in an attempt to triple its data revenue in the Indian market. According to BN, Samaresh Parida, Director (Strategy), Vodafone India, said that the company expects data to account for 10 percent of the unit’s total revenue in two years, up from 3 percent end September last year.
He added that the company requires additional spectrum in order to expand its data services and accomplish its goals. Currently, Vodafone India accounts for an average of 5 to 6 MHz spectrum in most of the nine zones where it holds a licence, as compared to the 22 MHz average held by the Vodafone Group’s units in other countries.
Parida also claimed that Vodafone may also increase its spectrum holding by acquiring its competitors once the government eases the merger and acquisition rules. Sources reveal that Vodafone India acquired the 3G and 4G spectrum in the 2010 auction at a price of US$ 2.2 billion.
Taiwan aims to auction 4G licenses by 2013 (Taiwan)
The Taiwanese government is planning to commence its 4G auction schedule two years ahead of schedule, by 2013 in an attempt to enable operators to launch their LTE services by 2015, as suggested by reports. Sources reveal that these allocations are expected to be in either the 700 MHz or the 2.6 GHz bands and may be released together with the 900MHz and 1.8GHz spectrum.
According to reports, the ministry would need to reach an agreement to replace the 700-MHz band as the spectrum is currently allocated to the military. As revealed by sources, the advance in Taiwan’s LTE schedule may hint at the country’s shift in focus from Wimax technology to LTE.
