Spare a thought for the mobile operators
Being stuck in traffic is not fun. Unless, of course, you are being chauffeured around in the back of a luxury vehicle, reading the latest news on your electronic tablet, listening to your favourite music and sipping from a cup of your favourite get-up-and-go juice.
Now imagine being stuck in traffic on a multi-lane road leading into the city, bordered on both sides with skyscrapers and high-rise buildings, monuments and other architectural heritage sites and absolutely nowhere else to go.
With a limited number of lanes running into (and out of) the city, and no way to widen the roadway or add more lanes, you have no other choice than to sit back, relax and enjoy the ride.
Spare a thought for the mobile network operators around the world, then, where in much the same way as the number of lanes may be seen as a limited and constrained resource, wireless spectrum presents the same challenges.
Being a limited resource, and with no way to add additional spectrum, it becomes critical for government affairs organisations and regulators to manage spectrum (like the national roads agency would), but also for users (including operators and handset manufacturers alike) to more efficiently use and reuse spectrum.
PwC’s work with mobile-network operators in the rest of the world highlighted that the different elements of spectrum management must be considered as part of a lifecycle and should not be treated as discrete activities.
The principles of reduce, reuse & recycle may at first seem out of place for an emerging market like South Africa, but it’s not. Operators are continuously rolling out new technology in their networks to allow for faster data services – and subscribers are hungry for more data and faster connectivity – and the best way to maintain this is to manage the entire spectrum lifecycle.
The basis of reducing the need for spectrum hinges on two elements: planning and acquisition, and much like a city planner and roads engineer need to understand the demands from road users’ perspectives; and the trends from car makers in terms of dimensions of cars, the number sold and type of propulsion used, planning makes use of spectrum demands from the subscriber’s perspective as well as advances made by the operators and by equipment suppliers (like changes in antenna design or signal-processing technologies).
Only once this is understood can the requirements be managed and the different types of connectivity (like Wi-Fi offloading or wide-area broadband initiatives) be considered. It is also at this point where the value of the different types of spectrum must be considered.
If the need is to build a road to a suburban or rural area, a single- lane road might be sufficient and might be a more efficient use of capital investment. In much the same way, 900MHz spectrum will be better for use over longer distances because of the way it pervades through the atmosphere.
In this case, 1800 MHz spectrum is of little value. Similarly, if the requirement is to grow capacity in an urban environment, the acquisition of 1800MHz spectrum becomes of the utmost importance – and very valuable!
Mobile communications networks are, at their core, all about reuse (much like the roads network) – and although reusing spectrum may often be overlooked in designing, deploying and managing mobile networks elsewhere, local mobile network operators have become adept at this.
For example, reusing the dedicated bus lane for normal traffic outside peak times is not something new, but changing the number of lanes into the city by reusing some of the outbound carriageway during morning traffic, and vice versa in the afternoon, is.
In the same way, the effective reuse of spectrum depends on the successful deployment and utilisation of existing resources whilst making sure that the customer experience doesn’t suffer, and that a balance is maintained between the interests of the subscriber and the capital investments and operational savings of the operator.
It also includes efforts from the operators to continuously find ways to reuse (or reallocate) existing spectrum by taking advantage of new technologies – like 4G LTE, which can ‘cram’ more bits into every MHz of bandwidth used.
The notion of recycling spectrum may seem odd but, as with all constrained natural resources, recycling has an effect and often can be an efficient way of gaining more effective capacity.
The digital dividend plans to reallocate spectrum between major use groups, shifting to digital television, will allow the analog spectrum to be used for mobile communications (compare this to reducing the width of the centre island between lanes for peak traffic use).
It is critical, though, to note that the recycling of spectrum can only happen on the back of effective spectrum management, which includes the return of unused and/or underused spectrum (which may include extensive decommissioning) and other complexities.
These challenges, and the investment and time required to act on recycled spectrum, leads to the frustration experienced by the operators with regards to the Sentech spectrum, and how it has not been opened and confirmed for investment.
PwC has supported clients to stay ahead of the rising demand for spectrum, and working with industry can assist with spectrum planning, acquisition, clearing, deploying, decommissioning and refarming.
This holistic approach to managing the spectrum lifecycle can make a big impact on the mobile network operator’s returns by reducing, reusing, and recycling the precious resource that is spectrum.
The only thing that remains is for the South African communications regulations body to provide regulatory certainty around which spectrum can be reused / recycled and from where, how much it will cost, how it will be made available (through auctions or just allocated) and for how long the operators will be able to keep it.
Without this certainty, the large investments required (mostly because of our country’s vast geographical distribution compared to, for example, Europe) will not be possible, and the operators will not be able to utilise the additional spectrum to service subscribers’ insatiable need for more connectivity at ever increasing speeds.
By Carelo Koekemoer, associate director in advisory at PwC.
More on spectrum
Operators hunger for spectrum: report
Spectrum: hot property across the globe
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