Our insatiable appetite for Mobile Data: is a spectrum drought on the horizon?

Spectrum hungry consumer services and business critical data on the move

Consumers have recently acquired a new taste, and boy are they hungry. It seems we just can't get enough mobile data, and our appetite for internet on the move is growing at a seemingly insatiable rate year on year. According to figures released by the UK government¹, the expected growth in mobile data traffic in Western Europe over the next five years will grow at an unbelievable rate of 91%, from under 200 petabytes (1 petabyte = 1000 terabytes) per month in 2010, to over 1,500 petabytes per month by 2015. The obvious driver of this growth is the birth of the smartphone, coupled with rapid enhancements in technology which enhance user experience while also increasing their expectations that their wireless phones will be able to match the speeds they experience via their wired connections at home. Further, with the uptake of cloud services, businesses are also increasingly dependant on wireless connections in order to access their data on demand.

So, what feeds this enormous appetite? Many mobile users simply believe that their videos, data, entertainment and everything else travel through a vacuum of infinite capacity. However, mobile data is currently one of the biggest users of radio spectrum in the UK and it's because of that (and the expected growth in years to come) that the spectrum is fast becoming a precious (read: valuable) resource.

The position in the UK

The private sector has developed Long Term Evolution (LTE) technology (otherwise known as fourth generation, or 4G mobile technology), which will enable more data to be transmitted over the same amount of bandwidth as the 3G networks and is expected to be rolled out in the UK from 2013. Yet as the UK spectrum regulator Ofcom pointed out in a recent press release, the "increased spectral efficiency of 4G technologies will not on its own be sufficient to meet the expected growth in demand for mobile data". If anything, it will only increase demand as users rush to purchase the next generation of devices capable of capitalising on the new technology. The UK government is acutely aware that the private sector alone will not be able to solve the impending spectrum drought, and that regulatory intervention is required.

Regulatory intervention in the UK can be broadly categorised into three categories:

• the release of civil spectrum (spectrum previously reserved for commercial use);
• the release of public spectrum (spectrum previously reserved for public use); and
• liberalising existing spectrum ("refarming" and trading existing spectrum to make existing use more efficient).

The release of civil spectrum

Ofcom has been given the responsibility by the UK government for actioning a couple of projects to ensure the accelerated release of civil spectrum for mobile data use. One such project is the 'Big Auction' of spectrum in the 800MHz and 2.6GHz bands. In the UK, unlike the US where it has already happened, the switchover to digital television isn't due to be completed until 2012, which will eventually free up 112 MHz of spectrum in the 800MHz band for other uses, including mobile data. However, it is widely recognised that this additional spectrum falls significantly short of the spectrum needed to satisfy the forecasted need. Ofcom initially proposed auctioning spectrum in the 2.6GHz band in April 2008. This band is particularly desirable because it is capable of a faster data transfer rate than the current 3G frequency bands, and is suitable for dense urban areas where demand is greatest (as distinct from greatest need). Yet the auction was delayed by a dispute brought by mobile network operators and further delayed by the change in government. Growing impatient, in July 2010 the coalition government issued an order to Ofcom to co-ordinate a combined auction of spectrum in the 2.6GHz and 800 MHz bands as soon as possible, thus creating the Big Auction. However the auction is not scheduled to occur until 2012, which means that the spectrum will not be cleared for release until 2013, when the existing mobile networks will be groaning under the weight of an expected data traffic forecast in Western Europe of between 500 – 700 petabytes per month, according to UK government figures . Perhaps recognising this, the Culture, Media and Sport Committee launched in May 2011 a new inquiry into spectrum, and in February 2011 Ofcom announced that it would also auction the 2010MHz band. Yet rather than be a 'quick-fix' solution, the earliest feasible date for the auction is not until 2012, and may not occur until after the Big Auction.

Unlike the bands identified above, there is another type of civil spectrum which can be released immediately, albeit in small blocks and only over small geographic areas. This is the spare capacity in the buffers between the spectrum re-allocated for digital television. Most commonly thought of as the 'white noise' between TV channels, this spectrum is called "interleaved" spectrum. It will become available as the digital switchover occurs in each region around the UK – as it already has in Manchester and Cardiff. However, despite making the interleaved spectrum available on a technology and service-neutral basis, it is thought that the spectrum will be snapped up for digital terrestrial television.

The release of public spectrum

In the coalition government's Spending Review 2010, it announced that at least 500 MHz of public sector spectrum below 5GHz will be released over the next 10 years for new mobile communication uses, including mobile broadband. In a call for evidence to gain views on certain aspects of its release programme to meet that target, the UK government is currently engaged in a public consultation until 23 June 2011. According to its consultation document released March 2011, the public sector holds around half of the spectrum most useful to mobile broadband, and is currently using that spectrum for defence, emergency services, transport and science. The Ministry of Defence (MoD) is the primary user of public sector spectrum, holding nearly 90% of the total. The MoD has already identified two bands from which it expects to release 160 MHz of spectrum, but no set dates or details of when or how these bands will be released have yet been announced. Instead, the UK government admits that it is likely the majority of the release of public spectrum will take place after 2015. The primary reason for the long lead time comes from the fact that this is, quite simply, a huge project, and one made complicated by the following issues:

• a release of this spectrum will require the co-ordination of different departments to undertake audits of their current holdings as well as an assessment of their future demands;
• many of the bands are subject to international agreements and regulations which may limit alternative uses, and could take years to negotiate changes;
• much of the public sector spectrum is shared between public and private sector users, and agreement may need to be reached by all current users of a band;
• changes of use in a band (refarming) and the introduction of new equipment throws up interference issues; and
• moving users to different bands typically requires a retuning or replacing of equipment, which comes at a cost.

Liberalising existing spectrum

It will clearly be a number of years before the average UK mobile user experiences the benefits of the planned civil and public spectrum releases. In the interim, Ofcom is taking steps to vary the spectrum licences granted to mobile network operators (MNOs) so as to ensure that the existing spectrum is used more efficiently, thereby 'liberalising' the spectrum. One way of doing this is to allow MNOs to refarm their existing bandwidth so that it may be used for purposes other than previously granted. For example, in January 2011 Ofcom amended the MNO licences for the 900MHz and 1800MHz spectrum, which were formerly only granted for use in relation to 2G voice and text services, so that 3G technology could be used to deliver mobile data services over these bands as well. This has not been without its problems, because MNOs Everything Everywhere and 3, who are licensees of the 1800MHz band, have accused Ofcom of distorting competition by allowing O2 and Vodafone, who are licensees of the 900MHz band, to refarm their bands for 3G services. Partly this is because the 900MHz band carries data over longer distances than the 1800MHz band, thereby enabling O2 and Vodafone to expand their networks over geographical areas for less capital investment than Everything Everywhere and 3, who would need to install more mobile towers in order to provide the same coverage. Perhaps more crucially, Everything Everywhere also says that there are no 3G smartphones currently available that can function at the 1800MHz bandwidth. Ofcom has responded that it does not consider there will be a material distortion of competition due to the Big Auction next year of the low-frequency spectrum at the 800MHz. However, as stated above, any 3G or 4G networks on the 800MHz band won't feasibly be rolled out until 2013, at least two years after liberalising the 900MHz band.

Another mechanism for liberalising the existing spectrum is to allow holders of spectrum licences to transfer or lease their licences. A regime for the trading of spectrum licences has already been in place in the UK for some years, although Ofcom has concluded that the transfer process needs to be simplified. Further, Ofcom plans to take action to enable spectrum leasing.

Read more about the battle for spectrum in the US.

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