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Analyst Angle: 3GPP standardization of LTE in 450 MHz is good news for Brazilian operators

Editor’s Note: Welcome to our weekly feature, Analyst Angle. We’ve collected a group of the industry’s leading analysts to give their outlook on the hot topics in the wireless industry.

Last week, the international telecom standards regulator, 3GPP, completed the standardization of LTE technology for the 450 MHz spectrum band. This is an important step, especially for Brazilian operators that acquired this band with the 2.6 GHz spectrum due to bidding rules.

In June 2012, the Brazilian telecom regulator, Anatel, auctioned 451 MHz to 458 MHz and 461 MHz to 468 MHz bands with the aim of increasing availability of mobile voice and data services in rural and remote areas. The technical characteristics of 450 MHz provide the opportunity to cover large geographical areas at lower costs.

The government estimates that around 24 million people in rural areas will be served once operators start providing services on the 450 MHz spectrum. Under the bidding rules, winners of the 450 MHz band are obliged to increase penetration of voice and data services in rural areas at affordable prices. Additionally, they should also provide broadband Internet free of charge to all rural public schools in the areas they serve. The 450 MHz band could also be used for the manufacturing sector, the shipping industry or even for fleet monitoring.

Up until this point, CDMA was the technology used for services in the 450 MHz band. However, CDMA has lost scale with user migration to new technologies. Meanwhile, LTE in this band is expected to facilitate the provision of higher quality broadband in rural areas more cost-effectively than is currently possible, mainly via satellite. Among the advantages of LTE in 450 MHz are: greater coverage, higher data rates (up to 25 megabits per second on the downlink and 12.5 Mbps on the uplink), lower latency and better performance.

Other mobile operators that have CDMA in 450 MHz but do not have access to LTE spectrum, including those in Latin America, will benefit from the standardization. They will have the opportunity to migrate to “4G” without needing to wait for a spectrum auction, if they hold a neutral spectrum. Otherwise, regulators can review current rules to enable this migration, for instance, by requiring a fee to allow mobile operators to use the 450 MHz band for LTE services.

Marceli Passoni is a research analyst at Informa Telecoms & Media.

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