New report highlights mobile broadband’s economic importance and need for more spectrum

Consumers will miss out on economic benefits if LTE launch delayed

Auckland, New Zealand – June 17, 2010

A new Network Strategies report highlights the rapidly growing importance of mobile broadband in boosting Australia’s productivity and warns that future economic benefits would be reduced if the mobile telecommunications industry is not allocated sufficient spectrum in appropriate bands.

Our report, The future deployment of mobile broadband services: 2.5GHz in Australia, commissioned by the Australian Mobile Telecommunications Association (AMTA), examines the links between mobile broadband, productivity and the role of new spectrum in 700MHz (Digital Dividend) and 2.5GHz bands.

The Minister for Broadband, Communications and the Digital Economy, Senator Stephen Conroy, launched the report at Parliament House in Canberra this week.

“We estimated gross productivity benefits for mobile broadband over the period 2013 to 2020 to be around AUD143 billion,” says our report. “Realisation of this potential will require the availability of sufficient spectrum in appropriate bands to deliver both coverage and capacity for the addressable market.”

We estimated that by 2020 there will be almost 20 million mobile broadband subscriptions on handsets together with another 6.3 million datacards (under a moderate growth scenario). The strong growth in mobile traffic will reach 1360 million Gigabytes by 2014.

Our report also estimates the gross productivity benefits from the two new spectrum bands – a 700MHz/2.5GHz combination – to be in the region of AUD62 billion over the period 2013 to 2020.

The report assumes the commercial launch of latest generation networks using Long-Term Evolution (LTE) technology over 2.5GHz occurs in 2013 with LTE over 700MHz available one year later in 2014.

We see a combination of high frequency (above 2GHz) and low frequency (below 1GHz) bands as the optimal solution for mobile network deployment with the low-frequency band providing coverage and the high-frequency band providing infill capacity.

“The timetable for the availability of spectrum in both the 2.5GHz and 700MHz bands is still uncertain, which may result in our assumed 2013 deployment for LTE being too optimistic,” the report says.

“However, delays in the commercial launch of LTE will place increasing pressure on capacity and increase costs as operators seek to implement strategies for managing expected traffic loads. This may have the effect of reductions in service quality, and higher prices, which may constrain demand and usage, and thus also the anticipated economic benefits.

“Without sufficient spectrum in appropriate bands to deliver both coverage and capacity for the addressable market, Australians will not reap the full economic benefits of mobile broadband,” it says.

AMTA Chief Executive Officer, Chris Althaus, said the peak industry body is working closely with its members and the Government on the key spectrum policy issues against a background of unprecedented growth in mobile broadband demand.

About Network Strategies

Network Strategies works at the forefront of the telecommunications revolution, delivering advice and insight to operators, manufacturers and governments. From offices in Auckland, London, Melbourne and Wellington, Network Strategies staff provide strategic consultancy to clients throughout the Asia-Pacific region, Europe and North America, offering a complete global outlook on key issues affecting all players in the telecoms sector.

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