I spent the middle of last week in Sitges in Spain. Yes, very nice thanks. A steady 28° although a little humid. Food was excellent. Did some shopping, paid for it using a Visa app on an NFC-enabled mobile. All very easy. Didn’t need to exchange any currency, money was taken from my bank account in the usual manner.
Well, not actually my bank account. And not my phone either. I was testing a user trial in this nice resort town – with phone and money courtesy of Visa. In Sitges, 1,500 users and 500 merchants have signed up for a trial led by Visa, La Caixa and Telefonica. The initial results are promising, although there is some room for intepretation. Less satisfyingly, there was little to be learnt about the business model (ie who gets how much money, and who from) as this was only a trial to find out if people liked the experience.
The man from Telefonica said he thought London would be the first City in Europe to have mass market mobile NFC payments rolled out. London would be pushed by the Olympics into the first major implementation outside of Korea and Japan, he said.
The only “nuts” left to crack are handsets and the business model. Which has been the case pretty much since people started referring to NFC in a mobile phone capacity. Get cracking on the cracking, please.
That said, there does seem to be progress. Progress too in broadband spectrum allocation. Not only did the EC state this week that it wants to see “sufficient” spectrum for mobile broadband made available by the start of 2013, but it said the 800Mhz band digital dividend spectrum must be opened up to wireless broadband as well by the same date. Meanwhile, it wants countries to crack on with allocating spectrum in the already harmonised bands.
They must have been listening in Austria, because the country wrapped up its 2.6GHz auction this week – raising just short of €40 million, and firing the starting gun for the first operators to roll out LTE services in the country.
A1 Telekom Austria was the first off the block, stating it would launch a 30Gb per month service for €90. That clearly presents LTE as a high volume, high bandwidth, high value service.
But what of the auction itself? What does it tell us about the value of 2.6GHz spectrum to operators in Europe? Well, one consultant in this area, Graham Friend of Coleago Consulting, says the auction is slightly confusing.
He worked out that the benchmark for the paired spectrum of approximately €0.04/Mhz/Pop is at a similar level to the results from the German auction, but 4 times lower than the Danish auction, although both markets also had four existing operators.
Friend said, “Whilst relative levels of spectrum supply relative to operator demand is often a significant determinant of spectrum prices achieved at auction it is clearly not the full story.”
One reason for Austria’s auction raking in a quarter of Denmark’s on a like-for-like basis is that, unusually, the RTR attached roll-out requirements to the 2.6GHz band requiring 25% of the population to be provided with coverage with a downlink of 1 MBit/s and 256 KBit/s on the uplink by no later than December 2013.
“This represents an onerous requirement for operators as it will require them to deploy LTE sooner than perhaps they might have preferred,” Friend reasons. The coverage requirements will have depressed auction prices.”
Friend added that attaching coverage requirements to the 2.6GHz spectrum is unusual as coverage is usually addressed through lower frequency spectrum bands such as 900MHz and 1800MHz.
The relative prices for paired and unpaired spectrum also remains confusing as Hutchison paid less in total for its paired and unpaired spectrum (a total of 65MHz) compared to T-Mobile which only acquired 40MHz of paired spectrum. This outcome is however more likely to be due to the algorithm (effectively a second price rule) used by the regulator to determine the final prices.
The use of second price rules, where the highest bidder wins but only has to pay the amount of the 2nd highest bidder, tends to result in more economically efficient allocations of spectrum but it can lead to interesting variations in price for similar lots. For example Telkom paid 20% more for the same amount of spectrum as Hutchison and T-Mobile paid 40% more on a €/MHz/Pop for its 40MHz of paired spectrum than Orange paid for its 20MHz and the difference is unlikely to be explained in full by differences in spectral efficiencies of LTE in wider bands
Friend’s conclusion is that as countries such as Switzerland, Spain and the UK prepare to auction spectrum in the 2.6GHz band the Austrian auction provides some insight into the potential value of the spectrum – but considerable uncertainty remains.
Indeed.
Meanwhile, one thing that is certain is that at about this time tomorrow I will be hosting an excellent webinar on how operators can ensure optimum performance of their radio networks. You can register here (https://www1.gotomeeting.com/register/709582521) for this event. I look forward to welcoming you online tomorrow.
Keith Dyer
Editor
Mobile Europe
http://mobileeurope.co.uk/news/news-anaylsis/8123-london-to-lead-way-in-nfc-mobile-payments
http://mobileeurope.co.uk/news/news-anaylsis/8132-lte-ready-for-launch-in-austria-after-39-million-auction-concludes
http://mobileeurope.co.uk/news/news-anaylsis/8129-ec-wants-800mhz-open-for-mobile-broadband-by-2013
http://mobileeurope.co.uk/news/news-anaylsis/8128-device-management-missing-the-enterprise-mark