Wireless Wars: Spectrum Neutrality, 3G and WiMAX

The GSM Association [GSMA] appears to be more scared than I expected by possible future competition from WiMAX, especially in Europe. It's put out a press release (not yet up on its website as I write this) essentially saying "Technology Neutrality in 2.5GHz? No way!" In a nutshell, the situation is this:

The European 2.5-2.69GHz band is designated for "3G extension". In other words, it's sort-of been pre-allocated for use for existing 3G services "for future expansion" with a specified technology. This has historically been the way wireless service have evolved. "You can use this bit of spectrum in this particular way".

However, there is an ongoing move towards being much less restrictive. Obviously, the 2.4GHz area used by most WiFi is a complete free-for-all, but has been a huge success in terms of usage & innovation, even if congestion occurs. But this is unlicensed spectrum - there's a parallel trend for regulators to move away from being technology-specific in licenced bands too. The UK's Ofcom has already adopted a position of saying "Spectrum should be technology neutral unless there's a very good reason otherwise", essentially putting the onus on the vendors & operators to work out ways to ensure their various different technologies play nicely with each other & don't interfere. The European Commision has been watching this keenly, as have various other national regulators.

Clearly, there are powerful influences at play in the 2.5GHz range. The existing mobile operators (ie the GSMA's membership) have the experience & scale to roll out existing 3G services in new spectrum in the future. New entrants would have a tough time, and it is likely that the vertically-oriented access+service model would continue to bumble along. But on the other hand, they've made a pretty poor collective job of doing cool & useful stuff with existing 3G spectrum.

As an alternative, backed by Intel (INTC), Motorola (MOT) and others, WiMAX (and assorted other wireless broadband alternatives) are looking hungrily at 2.5GHz, which represents the best chance for fairly-harmonised global wireless broadband spectrum. And which would level the playing field of established cellular operators vs. new entrants. Many of which are more likely to adopt the philosophies of the IP/fixed broadband in terms of service definition and pricing, thereby having a knock-on impact on the "competitiveness" of rival services in the existing 3G bands.

The GSMA is taking the angle that "standardisation is necesssary for decent scale economies", amusingly overlooking the fact that usage 2.5GHz outside Europe is likely to be pretty standardised on WiMAX anyway. I particularly love the patronising line "The GSMA also fears that developing nations will be the hardest hit by the fragmentation of spectrum usage" and that if "the price of a low-end 3G phone increases by $30, the effect will be severe"

Really? I would have thought that decent competition between technologies would have the impact of pressuring rapacious patent-holders to price their IPR at non-monopolistic prices. And that if we encourage more business models & value chains than the traditional mobile operators, we stand a decent chance of properly harnessing the benefits of Moore's Law in the mobile domain?

Mind you of course, as the GSMA believes that 2.5GHz "must be reserved for the IMT2000 family of technologies" that seems to imply it's quite OK for it to be used for CDMA EV-DO as an alternative to UMTS. You listening, Sprint and KDDI? The GSMA is happy for you to bid for 2.5GHz alongside Voda, Orange et al and the WiMAX guys...

Comments

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How will Alvarion fare in the WIMAX field?

2006 Jul 26 12:19 AM

[Ruski]

An interesting aspect. However, I would argue that

2006 Jul 26 07:43 AM

[Ruski]

An interesting aspect. However, I would argue that on the other hand Europe and most of Asia are in fact living proof that technology standardisation on specific open standards (GSM, WCDMA) in specific frequency bands has actually resulted in the best scale economies, lowest IPRs, and the toughest competition among vendors and operators. And as a result, the best possible value proposition for the end-user (price point on terminals, tariffs, great roaming, good interoperability etc.).

To change that approach for “do whatever with that frequency band” and to apply pure market economy Darwinism, is not always the best solution. Not even for as you state “pressuring rapacious patent-holders to price their IPR at non-monopolistic prices”, with QCOM being good proof of that.

2006 Jul 26 07:44 AM