Global Insight Perspective | |
Significance | The Romanian regulator, ANC, has launched a public consultation on the possibility of freeing the bands traditionally used for GSM telephony for 3G data services. |
Implications | If—or when—implemented, the licence amendment would provide operators with a viable means to expand their 3G networks outside the major urban areas by complementing them with 900-MHz cells. |
Outlook | Over the longer term—and device uptake permitting—there is a chance that nationwide 3G networks would allow operators to cease running their GSM networks altogether. |
ANC, the Romanian telecoms authority, has published on its website a draft resolution on the utilisation of the 880-915 MHz, 925-960 MHz, 1710-1747.5 MHz and 1805-1842.5 MHz frequency bands for provision of 3G services. According to the regulator's plan, the existing licences for the bands—which so far have been reserved for digital voice telephony—would be amended to allow the holders to use them for delivering third-generation data services as well. The draft is now available for public consultation and interested parties are invited to submit their comments by 21 November 2008.
Outlook and Implications
- 3G Through Larger Cells: The regulator's idea of delivering 3G outside the normal 2100-MHZ network follows the European Union (EU)'s decision to repel the original GSM directive, which reserved the concerned frequencies for digital voice telephony back in 1987 and thus crucially helped the technology to gain ground as a worldwide standard. With more developed versions of W-CDMA becoming available, the directive was perceived as increasingly out of date and was changed in a way that would allow service providers to utilise the GSM bands to accommodate wireless broadband. Although the W-CDMA 900 band does not have the same capacity as the 2100-MHz (or 1800-MHz) version, its larger cell ranges make it a substantially less expensive solution to deploy and thus a cost-effective medium for bringing 3G to less densely populated parts of a market—as such, its usage is largely similar to that of CDMA 450 technology (see Romania: 9 September 2008: Romtelecom Wins Romanian 450-MHz Mobile Tender). Global Insight expects all of the existing GSM licensees—Vodafone, Orange and CosmOTE—to take interest in the amendment, of which the option is particularly attractive for CosmOTE as it currently does not even own a traditional 3G licence.
- Replacing GSM Altogether? Finland's Elisa, in anticipation of the EU directive revision, was Europe's first operator to start deploying a nationwide 3G network by upgrading its base stations with W-CDMA 900 capability. The company has estimated that it will have practically the whole territory covered in the course of 2010. Going forward, Elisa has also said that it would be keen to scrap GSM infrastructure altogether and move voice traffic onto the 3G network, as providing voice telephony merely on a VoIP basis would understandably be a lot cheaper than doing the same on two overlapping networks—something that is highlighted further in a country as sparsely populated as Finland. Elisa's own prediction is that the first GSM base stations could be silenced by 2015 and, although it is still too early to tell how realistic this timeframe is, we nonetheless see it as a strategy on which other operators should keep an eye. Much—not least from a regulatory point of view—will depend on the availability of W-CDMA 900-compatible handsets and the overall uptake of 3G devices. If there is enough demand by service providers to create critical momentum for manufacturers to make W-CDMA 900 a universal feature on their phones, then there is indeed a chance that the first operators in markets similar to Finland may well be able to go totally 3G around the middle of the next decade.