Spectrum re-farming way to go

  • Business
  • Friday, 16 Apr 2010

A FEW years ago, regulators in Europe raked in a lot of money from selling 3G spectra.

This week, Germany began Europe’s first auction for 4G frequencies. The stakes are high simply because frequencies have become a rare commodity.

India is considered a latecomer in 3G and only now are its spectrum auctions under way. But before that is wrapped up, its leaders are looking ahead to the next level as it “wants to be with the rest of the world in 4G.’’

In the United States, the Spectrum Inventory Bill just got passed and now the telecoms regulator wants to start the process of reclaiming spectrum from broadcasters and others for future roll-out as per its national broadband plan.

The analogue days are long gone and in the digital age, the pace of development of wireless and mobile services has been phenomenal with different standards and technologies being deployed to offer services to users.

At every juncture there is a new technology that gives users better experience and mobility enables them to move around freely while still being able to communicate.

But with demand for high-speed and bigger bandwidth services growing, the need for spectrum allocation and re-farming becomes vital. It is simply because spectrum is rare and regulators have to make sure the usage is maximised.

Re-farming is a way to free up spectrum of an age-old technology that is not used; free up a frequency that may not have been fully developed; and help a frequency where demand is huge. Moreover, modern day technologies use spectrum more efficiently.

So re-farming is like having a plot of land where you may have, say, durian trees growing but they are not giving you the desired returns so you burn all that and replant with perhaps, maize, which can give you three times more value than durians.

In Malaysia, we are riding the 3G and WiMAX wave but both have not been fully exploited so we have a little bit of time before we need to get on the long-term evolution (LTE) bandwagon.

In the past the Government has been generous in dishing out spectra which do not cost billions like those auctioned in Europe. Some of these frequencies have been used to the brim while some others are lying idle.

That begs a question: would re-farming of frequency be a consideration before any new spectrum is dished out?

This is like taking stock of what we have and maximising usage of our resources.

Experts believe there are several bands that can be reallocated. They cite the 2.5G, 900Mhz, GSM 1800, and even the 450Mhz band that was used for the country’s first mobile service, Atur. Even the 800Mhz frequency is a good candidate for a review, as is the trunk radio spectrum.

Unfortunately, it is a very difficult decision to take back spectra that have been allocated and more difficult for players to terminate their services as there is a cost to all these. Then again, when the spectra are re-farmed, a fine balance needs to be maintained on who should be allocated spectrum.

There will be many interested parties: should the successful bidders be newbies, the established players or the small and medium-scale enterprises? Whoever it may be, it should not be because of political patronage.

Be mindful of convergence of communication and broadcasting industries, and the process of migration, upgrade and transition has to be smooth.

Users should not be made to change devices and investors should not see erosion in their investments. There is also no room for costly mistakes in the technology adoption as seen in some past cases.

The telecoms business involves big investments, long gestation periods and rapid technology changes but of course, the margins are also the envy of many other industries.

So re-farming is a given with scarce spectrum and technological changes.

More importantly, the country needs a clearer picture moving forward where a good and strategic future plan of spectrum allocation and competent management is charted so that the nation continues to benefit from technology.

Thus, re-farming of spectrum should be high on the agenda of policymakers.

● Deputy news editor B.K. Sidhu was fortunate to have met so many friends during the recent Vaisakhi celebrations in Petaling Jaya and she wishes all Sikhs Happy Vaisakhi.

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