editor’s comment
When spectrum liberalisation might mean trouble
When the lawyers get involved, is it time to get worried? Our piece this month from a senior lawyer at Field Fisher Waterhouse (page 6) illustrates the issues from possible legal point of view. The European Commission may have recently proposed abolishing all restrictions on spectrum use from a technical and service point of view, but the other mechanisms to ensure smooth operation of such an environment are not in place.
Undoubtedly there has been a loosening of attitudes towards use of spectrum, with regulators less-minded to mandate technical uses of certain wavelengths. Perhaps this has encouraged O2, whose chief technical officer Dave Williams outlines in these pages plans to push ahead with trials for using its 900MHz for 3G services, alongside 2G. This is despite the fact that at the moment there is no regulatory approval for such an action, and Williams himself admits O2/ Telefonica faces a bit of a struggle to get ready for such services in all its European territories. Nevertheless Williams himself thinks that eventually all 2G spectrum will be used for 3G services, which makes logical sense. In the meantime the operator is clearly interested in using its 900MHz cells to achieve rural coverage, and possibly better in-building coverage in certain areas. Williams is adamant that O2 will meet, and has met, its license terms without needing to use its 2G frequencies, but being able to mop up the rest of those hard to reach areas at 900MHz is clearly attractive economically – if it can be proven to work technically. But such attitudes to spectrum resource contrast with GSM operators who complain when frequencies they have earmarked for 3G use gets eyed up by those wishing to provide services based on other technologies. Keep IMT-2000 pure, they cry in defence. Can they have it both ways? They would argue the cases are different, of course, and there is some validity in that. But is is an example that once the shackles are off, liberalisation may cut both ways.
Advertising — will the consumers want it?
There’s a lot of hopes and fears being pinned on advertising. Operators know that charging a realistic amount for content services will always limit uptake to a certain demographic and handset base. Added to that, facing pressure in the longer term from service providers offering near-free products (IM, VoIP etc) operators also know they need to think about providing service bundles, with a blend of voice, messaging, video, internet access and the rest. The problem is, when you don’t think you have a suitable subscription model to support that, you need to look for alternative revenue streams. The obvious place to look is sponsorship and advertising. All well and good so far, but what form should that advertising take? Orange has just started with its interactive WAP banner advertising on its portals. Yet one advertising professional told us he doubted that big brands would have any interest in banner advertising. He thought there would be demand from those selling mobile content itself (the traditional ringtones, wallpapers etc) but that is not the market the operators need to attract. Then there are adverts which bookend video clips, for example, which would appear to be more attractive to the bigger brands. There’s also the “accept this sponsor’s message and get ten messages for free” model. Everyone agrees that mobile advertising is still in its early stages, but the obvious question is, what will the consumers accept, or even welcome? Isn’t there scope for more work in this area before such big decisions are made?