CANNES, France-As European governments craft plans to grant third-generation licenses, some GSM and future UMTS carriers fear a few of the stipulations regulators are putting on potential 3G licensees.
Representatives from the GSM (Global System for Mobile communications) Association as well as the UMTS (Universal Mobile Telecommunications System) Forum at last week’s GSM World Congress were disappointed officials in Germany and the United Kingdom plan to auction spectrum they say is not enough to support the data-intensive services 3G operators plan to deploy. The GSM Association and UMTS Forum believe governments should grant or auction no less than two 15-megahertz blocks in the paired band and 5 megahertz in the unpaired band.
“We discuss this often,” said Josef Huber, vice chairman of the UMTS Forum. “Regulators want more competition … We see this as limiting service operators. They can’t offer speeds of up to 2 megabits (per second).”
European regulators may grant 70 to 80 licenses this year, said Thomas Sidenbladh, chairman of the UMTS Forum’s regulatory aspects group. All regulators agree competition is important, yet many issues remain unsettled, he said.
The UMTS Forum wants globally harmonized 3G bands, but that is unlikely to happen since the United States already partitioned off part of the proposed 3G spectrum to today’s personal communications services operators. The other portion of that spectrum is not enough to launch 3G networks, UMTS reps said.
Government bodies and industry will meet in May at WRC 2000 to discuss the issue and the prospect of granting an additional 160 megahertz of spectrum than what was previously agreed upon. The United States has yet to formulate a stance on what band it will offer for 3G networks.
“Regulators believe technology can fix everything,” said Sidenbladh. “The terminals will become too complex resulting in bulky mobiles taking up too much battery life.”
The UMTS Forum also is afraid of regulators requiring huge down payments for 3G licenses. The United Kingdom recently announced its auction bidders, requiring an $82.3 million deposit from each. Carriers will have to make large investments in these advanced networks without fully understanding their business case or demand for high-speed data applications.
Adriana Nugter, a member of the GSM Association’s executive committee, urged regulators to rethink some of their licensing philosophies. In particular, regulators should not force second-generation operators to compete for licenses.
“If 2G operators have to bid for 3G licenses and don’t get one, they are a loser,” she said. “It’s a weird way to limit the radius of competition … This will have an impact on financing. When they don’t win a license, their value will go down significantly.”
Nugter also called for regulators to promote fair competition by avoiding coverage requirements for new entrants and not mandating roaming.
