Telenor, TeliaSonera Call off Denmark Merger

The most-important numbers in the global mobile industry arguably are “four” and “three,” the reason being the resistance of national regulators in North America and Europe to allow market consolidation from four leading mobile providers to three.

The latest example is the refusal of European Commission regulators to allow Scandinavian operators Telenor and TeliaSonera to combine their Danish operations, a move that would have reduced the leading number of providers in Denmark.

In fact, the EC wants to encourage the formation of an additional operator that would increase the number of competitors from three to four.

The European Commission confirmed that “the discussions with the parties thus far were not able to fully address the Commission's competition concerns created by the proposed merger.”

"EU merger control has to make sure that company tie-ups do not lead to reduced innovation, higher prices or reduced choice for consumers and do not restrict competition in the internal market,” said Commissioner Margrethe Vestager, competition policy executive.

Auto Industry to Follow Path of Telecom Industry: Mature Product Life Cycle

It might provide small comfort, but the telecom industry is not the only market facing maturity and therefore declining sales for legacy products.

The National Automobile Dealers Association (NADA) said that U.S. car sales would likely begin to decline in 2017 after threatening new all-time sales records in both 2015 and 2016.

A report by the U.S. Public Interest Research Group points out that Millennials are less car-focused than older Americans and previous generations of young people, and their transportation behaviors continue to change in ways that reduce driving.

Between 2001 and 2009, Millennials made four percent more trips on public transportation, walked 16 percent more, and rode their bikes 27 percent more. Driving trips declined by 15 percent.

Because there will be less demand, it eventually will take four younger consumers to replace the auto spending of just one present baby boomer customer, the auto dealers association has predicted.

That contraction might have today’s automakers casting about for new lines of business to pursue, much as telecom service providers have been doing.

Many of us, 30 years ago, would have been hard pressed to envision a world where underlying demand for telecom or automobile products dropped, instead of growing.

Spectrum Trading Might Mean Less Demand for Additional Spectrum

Mobile service providers typically have several ways to solve any particular business problem. Consider spectrum or capacity resources. They can reduce cell diameters, which effectively increases frequency reuse opportunities.

They can use more-effective radios, offload traffic or acquire new spectrum. They also can shape retail prices to encourage more-efficient usage on the part of consumers, or shift to newer and more bandwidth-efficient networks.

The newest tool is spectrum sharing, in a number of potential forms. At the simplest level, mobile operators can agree, where lawful, to share use of spectrum resources. As always, use of any one of the tools reduces the need to use additional tools, to some extent.

If mobile service providers trade spectrum, they may not have to acquire so much new spectrum, which in turn should lower demand for new spectrum in upcoming spectrum auctions in India, according to credit rating agency Fitch Ratings .

That is, of course, if the firms do not run afoul of government rules about the maximum amount of spectrum any single provider can lease.

Fitch Ratings believes the top three telecom operators--Bharti Airtel, Vodafone and Idea Cellular--will acquire additional spectrum from smaller telcos.

Reliance Communications and Reliance Jio, the latest entrant in the mobile market, appear to have agreed to widely share 800-MHz spectrum in most of India’s markets.

Spectrum trading might also be the triggering event for market exits by smaller firms, as trading rules seem to allow smaller firms to transfer spectrum licenses to other mobile operators.

That might include Tata Telecom, Videocon Telecom and Aircel Limited.

Bharat Sanchar Nigam Limited and Mahanagar Telephone Nigam Limited might be able to raise revenues, as they own rights to 900-MHz spectrum.

On the other hand, rationalizing the spectrum market will be limited in some significant ways.

The rules prevent any mobile operator from use of  more than 25 percent of available spectrum in any one circle (market).

Also, the business model must incorporate new additional taxes on the revenue derived from traded spectrum,  over and above the existing spectrum charges.

Spectrum sellers also will have to pay an additional one percent  fee on the traded spectrum's market value.

The other issue is the necessity of paying “market value” for any traded spectrum acquired at below-market cost prior to 2010.

Reliance Comm, Reliance Jio Spectrum Sharing Illustrates SharingTaxonomy

As expected, Reliance Communications and Reliance Jio Infocomm will announce a finalized deal to share mobile spectrum supporting fourth generation networks (4G) over most of India.

The deal will allow Reliance Jio to provide better coverage, while reducing Reliance Communications debt burdens.

The deal enables Reliance Jio to offer 4G services over the 800 MHz band, representing 10 MHz of 4G spectrum, across 10 circles in Mumbai, UP-East, Orissa, Madhya Pradesh, Bihar, Assam, Northeast, Haryana, Himachal Pradesh and Jammu & Kashmir.

You might say the Reliance Communications deal with Reliance Jio is among the simpler forms of spectrum sharing that now includes Wi-Fi, TV white spaces and eventually other forms of sharing, such as allowing new commercial users access to licenses held by government entities, without clearing the existing users.

Among the other general categories of spectrum sharing--aside from simple business deals--are methods based on geography, time and coordinated sharing.

Geographic sharing is going to develop as a method of allowing commercial users access to spectrum licensed to government entities, in areas where the government does not generally need to use the spectrum.

Another commonly considered type of sharing is temporal sharing. In this case, two or more users would share access to the same band of spectrum in the same geographic area, but at different times.

That will be the case for expected new arrangements in the U.S. market in bands such as 1695 MHz to 1710 MHz and 1755 MHz to 1850 MHz, as well as 3.5 GHz, for example.

Sharing based on time division can be either predictable or random.

Under a predictable temporal sharing regime, one user agrees not to transmit during particular pre-defined times to accommodate the other user’s services.

Unpredictable or random temporal sharing occurs when the secondary user may have to stop using the specific spectrum on short notice or without warning.

Coordinated sharing involves multiple users accessing the same band of spectrum in the same geographic area at the same time. Wi-Fi has been the best example.

The two potential mechanisms for coordination are databases and cognitive radios. TV white spaces is an example of a service based on use of databases to control interference.

Cognitive radio networks or devices automatically detect devices in its vicinity and coordinate usage in response.

Uncoordinated rule-based sharing generally is the way unlicensed spectrum is used.

Intel to Support Ericsson Nokia Narrowband LTE for IoT

Intel Corporation is supporting Ericsson and Nokia development of Narrow-Band Long-Term Evolution (NB-LTE).

The new platform is designed to support Internet of Things (IoT) applications requiring low power consumption extended battery life, low bandwidth consumption and compatibility with fourth generation Long Term Evolution networks, rather than using second generation networks that are being phased out.

Intel is aiming to supply NB-LTE chipsets beginning in 2016 that will enable slim form factors.

Some say the industry has to learn from the experience of LTE when designing fifth generation network standards so there is less need to “retrofit” the network for new specialized applications.

So far, LTE has had to be adapted for voice support, content delivery and now narrowband IoT apps as well.

The new NB-LTE platform also illustrates the choices industry and suppliers must make when big new opportunities--and networks to support them--are in the developing stage, and when there are rival proposed standards.

And rival options there are, including a Huawei Technologies system called Cellular IoT, LoRa and SigFox, for example.

Other special-purpose networks developed in the past to support industrial and utility networks likely will be pitched as well.

The outcome is hard to predict at the moment, but there are precedents in the consumer electronics business for “winner take all” outcomes. In the past there has been some coexistence of a few mobile platforms, although 4G, which began with a couple of flavors, has emerged as the first truly universal mobile standard.

But IoT wireless networks could be less uniform, at least for a while, given the newness of the market and the mix of specialized industrial and commercial applications as well as mass market consumer apps.

There will be more pressure for a “winner take all” single standard for consumer IoT, but more room for some amount of heterogeneous approaches in the enterprise and industrial verticals.

Google Fiber Competes with AT&T, CenturyLink, Comcast, Time Warner Cable, Not Verizon

If you look at where Google Fiber presently is operating, and where it is looking to expand, Google’s major competitors are AT&T, CenturyLink, Comcast and Time Warner Cable. In other words, two of the three largest telcos, and both of the biggest cable TV companies, plus Cox Communications.

Conspicuously missing: Verizon Communications.

source: Google Fiber Blog

Spectrum Policy is About Aligning Supply and Demand

One theme never too far from the surface, when spectrum sharing in any of its forms was the subject, is the nearly-immediate turn to issues of supply and demand. That was very much the case at the Pacific Telecommunications Council Spectrum Futures conference held in Singapore Sept. 10 and 11, 2015.

Speakers almost reflexively mentioned blockages, inefficiencies and barriers to the supply of capacity to users at affordable prices, as well as barriers to unleashing end user demand, no matter what technical issues were being discussed.

The whole point of shared spectrum, said Robert Pepper, Cisco VP, Peter Stanforth, Spectrum Bridge CTO and founder, H Sama Nwana, Dynamic Spectrum Alliance executive director and others, was to wring maximum usefulness out of available spectrum.

And that requires new ways of thinking. Where always in the past interference avoidance was the issue, using new tools we can essentially operate with a more-relaxed approach to interference issues, said Jeffrey Yan, Microsoft technology policy director.

A statement easy to misunderstand, Yan and others pointed out that devices and databases can be used to dynamically adjust network access, as required, to avoid interference.

Regulators, on the other hand, agreed that spectrum sharing, in many forms, is the future, if also pointing out they do not yet have formal enabling legislation in place, for even a few of the potential forms of spectrum sharing, noted Woro Indah Widiastuty, Indonesia Ministry of Communication and Information Technology senior technology adviser.

Chaucer Leung, Hong Kong Office of the Communications Authority assistant director, agreed, while noting cross-border coordination would be fundamentally important, something regulators from Vietnam and Cambodia said was also important in their areas.

In other cases, even when there is intent to release new spectrum, it simply takes too long, said Wan Faizal Wan Hassan, Axiata Group Berhard AVP.

In other cases, inefficiency has been built in because of fragmented spectrum allocations that chew up much potential usable bandwidth in the form of guard bands, for example, something Rajan Mathews, Cellular Operators Association of India executive director, noted.

That is why Spectrum Futures was organized on the principle of “business impact” of policy, technology and practice.

The bottom line is that connectivity to the Internet will generally be spectrum-based across most of the world, and especially so in South Asia and Southeast Asia. Real though the blockages might be, no policy matters can be divorced from end user demand or supplier economics.

Even when discussion formally was centered on licensed or license-exempt approaches, command and control decisions versus flexible allocation, everything came back to aligning the ecosystem so supply can be rapidly increased to meet demand.

And requirements can be stringent, many noting the context of end users who really cannot afford to pay too much to get Internet access. One example, end user ability of pay of about $2 a month.