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Telecom Regulatory Authority Of India (TRAI) Recommendations Threaten Mobile Broadband Investment And Deployment In India

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The GSMA today stated that the TRAI’s recommendations on the “Auction of Spectrum” will set India back in its goal to deliver “Broadband on Demand” to the citizens of India. The proposals disregard international best practice in spectrum policy and jeopardize the investment of billions of US dollars in new mobile infrastructure in a sector that either directly, or indirectly, employs almost 10 million people and serves more than 911 million consumers.

The European 3G experience more than a decade ago made clear that auctions designed to maximise revenue, hinders the development of the mobile sector and the socio-economic benefits that mobile delivers to the public. Reducing the ability of mobile operators to invest in network upgrades and expansion would undermine the ability of India to leverage its telecom infrastructure to empower citizens and businesses, especially those in rural communities, to participate equitably in the Internet economy. For example, the TRAI’s proposed reserve prices for upcoming spectrum auctions are so prohibitively high that they will inevitably curtail mobile operator investment in Mobile Broadband infrastructure and increase prices to consumers.

Given the strong correlation between mobile penetration and socio-economic development – with a 10 per cent increase in Mobile Broadband penetration delivering as much as US$80 billion (INR 3,506 billion) of extra revenue for India’s transport, healthcare and education sectors by 2015– the TRAI’s recommendations will not serve the interests of the broader Indian economy.

“Efforts to squeeze money out of mobile operators for some perceived short-term gain will only reduce investment in networks, inhibit growth of mobile services and drive up consumer prices – limiting the value the public will derive from the spectrum resource in the long term,” said Franco Bernabè, Chairman of the GSMA and Chairman and CEO of Telecom Italia Group.

TRAI’s recommendations would not only drive up the cost of the mobile spectrum, but would also create artificial scarcity of this critical resource. In advance of license renewal, TRAI has proposed to force current 900 MHz licensees out of the band into the 1800 MHz band. As a result, TRAI would limit the available spectrum in the upcoming 1800 MHz 2G auction and leave the remainder under-utilised for a significant period, creating unnecessary scarcity at a time when India has an opportunity to shape the future of the mobile industry. This effectively means that billions of US dollars of investment would be wasted.

Earlier this month, the GSMA announced that India was positioned to surpass the US as the second largest Mobile Broadband market in the world within the next four years. In recognition of the threat to this potential, Anne Bouverot, Director General, GSMA, commented, “The GSMA’s member operators in India have invested heavily and worked hard to deliver innovative services to consumers and positively impact the broader Indian economy. They are naturally very concerned about the TRAI recommendations, which have the potential to stifle investment in India’s mobile sector. The GSMA and its members are seeking an open dialogue with the Government of India on the licensing of the critical spectrum with the aim of finding a solution that will drive investment and growth in mobile communications and more broadly in the Indian economy.”

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About the GSMA

The GSMA represents the interests of mobile operators worldwide. Spanning more than 220 countries, the GSMA unites nearly 800 of the world’s mobile operators, as well as more than 200 companies in the broader mobile ecosystem, including handset makers, software companies, equipment providers, Internet companies, and media and entertainment organisations. The GSMA also produces industry-leading events such as the Mobile World Congress and Mobile Asia Expo.

For more information, please visit the GSMA corporate website at www.gsma.com or Mobile World Live, the online portal for the mobile communications industry, at www.mobileworldlive.com

For further information, please contact:

GSMA Press Office
press@gsm.org


[1] GSMA and Analysis Mason, August 2011

 

GSMA Announces that India Will Become the World’s Second Largest Mobile Broadband Market Within Four Years

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Additional Spectrum Needed to Ensure India Builds on Momentum; Affordability Key to Long-Term Mobile Broadband Growth and Social and Economic Prosperity

3 April 2012, New Delhi: The GSMA today announced that India will become the second largest Mobile Broadband1 market globally within the next four years with 367 million Mobile Broadband connections by 2016. In doing so, India will overtake the US, which will account for 337 million Mobile Broadband connections by 2016, but will still be second to China, which will have reached 639 million Mobile Broadband connections in the same period.

Since 3G licenses were first awarded to mobile operators in India in September 2010, Mobile Broadband connectivity has grown steadily. There are now more than 10 million HSPA connections across the country, and this is expected to grow exponentially, by 900 per cent, to more than 100 million connections in 2014. This will make India the largest HSPA market worldwide within the next two years, surpassing China, Japan and the US in the process.

“The mobile industry in India is set for immense growth as Mobile Broadband technologies such as HSPA and LTE start to proliferate, but there is scope for far greater development,” said Anne Bouverot, director general of the GSMA. “To take full advantage of this, the Indian government should facilitate the timely release of additional spectrum in a fair and transparent way for all stakeholders. The benefits are clear to see – a 10 per cent increase in Mobile Broadband penetration could contribute as much as US$80 billion (INR 3,506 billion) of revenue across the country’s transport, healthcare and education sectors by 20152.”

Affordability a Prerequisite to Long Term Growth in India

According to a recent study3 by the GSMA’s Wireless Intelligence service, despite a large rural population, mobile growth in India is being largely driven by more affluent communities in cities. Net additions in urban areas reached 85 million last year compared to 57 million in rural areas, with mobile penetration increasing by 20 percentage points in urban areas to 161 per cent, against a 6.5 percentage point rise in rural areas to 36.6 per cent.

The provision of Mobile Broadband in rural and remote areas will help India bridge the so-called “digital divide”. It will improve productivity, help overcome the constraints of transport infrastructure and provide much needed services such as banking, health and education. Given the significant social and economic benefits, expanding affordable access to Mobile Broadband should be a high priority of the Indian government.

According to Wireless Intelligence, with an average retail price of US$500, the cost of an LTE smartphone is four times the average monthly GDP per capita in India, and at an average of US$200, the retail price of an LTE USB dongle is twice an Indian’s monthly income on average4. As LTE networks proliferate worldwide and more devices become available, costs will come down. Initiatives like the introduction of the low cost Aakash tablet in India are helping spur widespread access to the Internet in emerging markets, but more can be done.

“It is important that all citizens in India have access to high-speed Internet connectivity and the transformative opportunities it provides,” continued Ms. Bouverot. “The current average cost of an LTE device is prohibitive for the uptake of Mobile Broadband for those on low incomes. The GSMA is committed to working with its mobile operator members to investigate innovative ways in which to make access to the mobile Internet more affordable for all.”

The GSMA today also announced it has opened a permanent office in New Delhi and recently made two new hires: Sandeep Karanwal, head of GSMA’s India office, and Nitin Sapra, the GSMA’s manager for spectrum and regulation policy in India. Ms. Bouverot continued, “It is an exciting time to launch our new office, as India is an increasingly critical market for the mobile industry, both commercially and in policy terms, through its influence throughout Asia Pacific and the world.”

Supporting Operator Quotes

“India is taking great strides towards the uptake of data and already has the third largest Internet subscriber base in the world with more than 100 million users, and the second largest Facebook subscriber base in the world with 43 million users,” said Sanjay Kapoor, CEO – India & South Asia, Bharti Airtel. “Various studies have shown that a 10 per cent increase in mobile penetration could lead to 1 per cent increase in GDP, and a 10 per cent increase in Mobile Broadband penetration could deliver a 1.4 per cent increase in GDP. Along with 2G and 3G, when 4G is deployed, India will be at the forefront of cutting-edge Mobile Broadband provision globally. We are delighted to work with GSMA to help expedite this phenomenal growth and deliver Mobile Broadband to every corner of India.”

“In the decade and half since the launch of mobile services, the spin-offs for India and its people have been tremendous. GDP growth rates have increased, thanks in large measure to the empowering effects of mobile telephony. India is now poised on the cusp of another tectonic shift – but this can only happen if more harmonised spectrum is released, ensuring high-speed broadband connectivity is available at reasonable rates, which will allow India to bridge the telephony divide and join the ranks of the growing Mobile Broadband ecosystem,” said Mr Himanshu Kapania, Managing Director, Idea Cellular.

“Mobile Broadband, which is emerging as one of the strong growth areas in the Indian telecommunications sector, can contribute significantly to the social agenda of bridging the digital divide,” said Mr Srinath Narasimhan, Managing Director of Tata Teleservices Limited. “As newer technologies and faster data speeds become available, affordable next-generation devices in various form factors – supporting an ever-growing list of lifestyle-impacting applications, services and solutions – will be key to this growth. We will continue to work closely with device and solution players worldwide, and with the GSMA, to create the right and enabling ecosystem to successfully take the data story forward.”

“We have experienced the rapid growth of mobile communications in India and its vast socio-economic impact. Our perspective is that further Mobile Broadband proliferation can be achieved most rapidly and affordably through data services on 2G, in combination with 3G and LTE. Continued investment, however, depends on a stable and predictable regulatory environment as well as the availability of spectrum,” said Jon Fredrik Baksaas, President and CEO, Telenor Group.

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Notes to Editors

1Mobile Broadband technologies: WCDMA, HSPA, LTE, TD-LTE, TD-SCDMA, CDMA2000 1X EV-DO – Wireless Intelligence, April 2012

2GSMA and Analysis Mason, August 2011

3Wireless Intelligence: Urbanisation driving growth in BRIC countries

4Wireless Intelligence: Global LTE network forecasts and assumptions – one year on

About the GSMA

The GSMA represents the interests of mobile operators worldwide. Spanning more than 220 countries, the GSMA unites nearly 800 of the world’s mobile operators, as well as more than 200 companies in the broader mobile ecosystem, including handset makers, software companies, equipment providers, Internet companies, and media and entertainment organisations. The GSMA also produces industry-leading events such as the Mobile World Congress and Mobile Asia Expo.

For more information, please visit the GSMA corporate website at www.gsma.com or Mobile World Live, the online portal for the mobile communications industry, at www.mobileworldlive.com

About Wireless Intelligence

Wireless Intelligence is the definitive source of mobile operator data, analysis and forecasts, delivering the most accurate and complete set of industry metrics available. With 8 million individual data points – updated daily – the service provides coverage of the performance of all 950 operators and 800 MVNOs across 3,500 networks, 55 groups in 236 countries.

Media Contacts

Nupur Chandra (India)
T: +91 995 3143 209
E: nupurchandra@corvoshandwick.co.in

GSMA Press Office
press@gsm.org

The 2.6GHz Spectrum Band – An Opportunity for Global Mobile Broadband

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Data traffic on mobile broadband networks is growing exponentially as both consumers and business users turn to smartphones, connected laptops, tablet computers and other devices to access the Internet, email,  business applications and social networking services.

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GSMA Commends Governments Attending WRC-12 in Recognising the Need to Allocate Future Spectrum for IMT Mobile Broadband

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The GSMA today announced that governments representing more than 150 countries attending the World Radiocommunication Conference 2012 (WRC-12)1 in Geneva have recognised the critical role that spectrum plays in bringing the enabling power of Mobile Broadband to citizens globally. Following this recognition, the International Telecommunications Union (ITU) has committed to identifying additional spectrum requirements for the deployment of International Mobile Telecommunications (IMT)2 Mobile Broadband globally, ensuring that future spectrum allocation is on the agenda at WRC-15.

WRC-12 today adopted an agenda item calling on WRC-15 to secure additional spectrum for IMT, a family of mobile standards defined by the ITU. Under the leadership of Chairman Tariq Al Awadhi, delegates from around the world affirmed their commitment to ensuring that citizens have ready access to the resources and tools they will need to live and work in the twenty-first century. The ITU will soon launch an intensive multi-year work programme to study options for additional IMT spectrum that will be presented and discussed at WRC-15.

“The GSMA is extremely pleased that many countries have recognised the need to secure the future of Mobile Broadband and along with our members we stand committed to the success of the ITU’s work,” said Anne Bouverot, Director General of the GSMA. “By taking action now to secure more spectrum, mobile operators will be better positioned to meet the mobile data needs of billions of consumers well into the future. We look forward to working with governments and regulators over the next three years to identify the spectrum needed to deliver the vision of providing low cost, ubiquitous broadband all over the world.”

The future of mobile depends on mobile operators having timely and reasonable access to the necessary spectrum resource. Estimates of mobile data demand have always proven too conservative. Data growth by 2010 had exceeded earlier ITU forecasts by over five times. Today there are more than 1.7 billion IMT connections around the world, and by 2015 this number will more than double to over 3.6 billion as mobile technology grows exponentially.

Mobile connectivity is also a key driver of economic improvement – the World Bank estimates that a ten per cent increase in Mobile Broadband penetration can boost GDP by 0.6 per cent in developed countries, 0.81 per cent in developing countries, and as much as 1.4 per cent in some low income countries. The GSMA and its members will continue to work with governments and regulators around the world to foster an environment that supports the social and economic growth that Mobile Broadband connectivity enables.

Mobile Operator Supporting Quotes

“This global recognition of the need for additional spectrum for future Mobile Broadband requirements is critical and most welcome,” said Dato Sri Jamaludin Ibrahim, President and Group Chief Executive Officer of Axiata Group Berhad, which operates in 10 countries across Asia. “As a key mobile operator in the Asia Pacific region, Axiata looks forward to working with regional regulators to ensure that such spectrum is identified and secured in a timely manner for the benefit of the industry and consumers.”

Sanjay Kapoor, CEO – India & South Asia, Bharti Airtel, said: “As seen the world over, the data revolution will play a pivotal role in driving fundamental societal changes – especially in India. India is already the third largest Internet market in the world with more than 100 million users, and has the second largest Facebook user base worldwide with 44 million subscribers. Given the continuing increase in demand for data, we need more spectrum to meet the needs of our customers now and in the future. Alongside the GSMA, we are happy to work with industry leaders and government to overcome the spectrum challenge and enable the future growth of Mobile Broadband services for the benefit of consumers in India.”

“Following our successful deployment of mobile services over the past ten years, the timely and efficient allocation of spectrum will enable us to continue to meet the needs of our customers and ensure the delivery of next generation Mobile Broadband services and products,” said Brett Goschen, CEO, MTN Nigeria Communications Limited. “Time is of the essence and we are committed to working with policy makers and regulators to make the global vision of Mobile Broadband a reality.”

“The mobile industry cannot run without spectrum. Next generation Internet access depends on it, said Enrique Blanco, Global CTO, Telefónica. “The more spectrum that is released the wider the coverage, the richer the services and the more cost effective the networks can become to the benefit of our customers.”

Telstra supports the future agenda item to identify additional spectrum for Mobile Broadband and looks forward to working with the Australian government and industry on this important matter, said Mike Wright, Executive Director, Networks & Access Technologies, Telstra. “As an industry we are moving to more efficient technologies and refarming our existing spectrum assets in order to make more effective use of the spectrum we have. Additional spectrum will be essential to meet demand for data and given the long lead time it takes to introduce new spectrum bands it is important for the industry to be working on this now.”

Notes to editors

1International spectrum allocations are made only in the context of WRC meetings – treaty negotiations that take place every three to four years. The ITU hosted the four-week WRC-12 meeting in Geneva, Switzerland from 23 January to 17 February 2012.

2IMT is a family of technology standards as defined only by the ITU. Technologies compliant under IMT include: EDGE, CDMA2000, UMTS (WCDMA, TD-CDMA, TD-SCDMA), DECT, WiMAX and LTE. IMT will operate in worldwide radio frequency bands as identified in the ITU’s Radio Regulations.

About the GSMA

The GSMA represents the interests of mobile operators worldwide. Spanning more than 220 countries, the GSMA unites nearly 800 of the world’s mobile operators, as well as more than 200 companies in the broader mobile ecosystem, including handset makers, software companies, equipment providers, Internet companies, and media and entertainment organisations. The GSMA also produces industry-leading events such as the Mobile World Congress and Mobile Asia Expo.

For more information, please visit the GSMA corporate website at www.gsma.com or Mobile World Live, the online portal for the mobile communications industry, at www.mobileworldlive.com.

Media Contacts:

For the GSMA:
Charlie Meredith-Hardy
Tel: +44 7917 298 428
CMeredith-Hardy@webershandwick.com

GSMA Press Office:
press@gsm.org

Increased Mobile Broadband Spectrum Vital for Africa’s Socio-Economic Development, says GSMA

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Release of Spectrum Is Set to Generate an Additional US$82 billion in GDP Per Year and Help Lift 40 Million Sub-Saharan Africans Out of Poverty by 2025

The GSMA today announced that greater allocation of spectrum for Mobile Broadband is vital for the economic and social development of sub-Saharan Africa. New findings from a report by the GSMA and Plum Consulting reveal that, across the region, the release of Mobile Broadband spectrum in the Digital Dividend and the 2.6GHz bands by 2015 in sub-Saharan Africa could:

  • Create up to 27 million new jobs, increase GDP per capita by 5.2 per cent1, which will directly lift 40 million people out of poverty2 by 2025; and
  • Increase GDP and government tax revenues by US$82 billion and US$18 billion per year respectively by 2025.

Mobile voice and SMS services have made major economic contributions to sub-Saharan Africa over the past decade and accounted for 3.5 per cent of regional GDP by 2010. While the effects of broadband internet access are just beginning to be felt across the region, its importance has been recognised by the UN Broadband Commission for Digital Development which has set a global broadband challenge “to ensure that 40 per cent of households in developing countries are using broadband internet by 20153.” In sub-Saharan Africa, the lack of fixed line telecom infrastructure means that Mobile Broadband services will be essential in achieving this target.

The GSMA expects that there will be 240 million Mobile Broadband connections in sub-Saharan Africa by 2015, compared to just 4 million fixed broadband connections4. The GSMA is therefore calling on countries across the region, including Ghana, Kenya, Nigeria, Senegal, South Africa and Tanzania, to urgently release harmonised spectrum for Mobile Broadband. This will expand the reach and availability of affordable broadband services and help realise significant economic and human development gains for sub-Saharan Africa.

Currently, just 80MHz of spectrum is available for delivering Mobile Broadband service in a typical African market. In contrast, mobile operators in many middle and high-income markets have access up to 400MHz of spectrum for delivering Mobile Broadband.

“African governments must act now to release much-needed spectrum for Mobile Broadband services if they are to meet the UN’s 40 per cent broadband target,” said Peter Lyons, Director of Spectrum Policy, Africa and Middle East, GSMA. “Increased spectrum will lower the cost of mobile devices, improve speed of data communication, and ultimately help nearly 40 million Africans escape poverty.”

By licensing spectrum in the Digital Dividend and the 2.5GHz bands for Mobile Broadband, governments in the region have the opportunity to increase total spectrum available by approximately 70 per cent. In particular, the Digital Dividend band, which is currently used for analogue television broadcasting, offers widespread mobile broadband coverage in rural areas and improved indoor penetration in urban areas. In rural areas alone, the Digital Dividend band could deliver Mobile Broadband service to between 40 to 80 per cent of the population.

Lyons continued: “If governments in sub-Saharan Africa allocate more spectrum for Mobile Broadband over a 10-year period from 2015, this would result in US$235 billion of additional GDP and US$50 billion in additional tax revenues5. However, if the release of spectrum is delayed by five years, then these benefits would fall to US$50 billion in additional GDP, and US$10 billion in additional tax revenue. Action is required now to secure the future connectivity and economic empowerment of Africa’s citizens.”

To view the report please visit: http://serving.webgen.gsm.org/5926DA9A-2DD6-48E7-BAD4-50D4CD3AF30A/assets/PLUM-GSMA_benefits_of_spectrum_for_MBB_in_SSA-final.pdf

Notes to editors

1 At constant 2010 prices
2 Poverty is defined as living on or below the International Poverty Line of US$1.25 per person per day
3 http://www.broadbandcommission.org/Documents/Broadband_Challenge.pdf, 25 October 2011
4 The Mobile Broadband forecasts include W-CDMA as well as HSPA and LTE connections
5 At a discount rate of 5 per cent per annum

About the GSMA

The GSMA represents the interests of mobile operators worldwide. Spanning more than 220 countries, the GSMA unites nearly 800 of the world’s mobile operators, as well as more than 200 companies in the broader mobile ecosystem, including handset makers, software companies, equipment providers, Internet companies, and media and entertainment organisations. The GSMA also produces industry-leading events such as the Mobile World Congress and Mobile Asia Congress.

For more information, please visit Mobile World Live, the online portal for the mobile communications industry, at www.mobileworldlive.com or the GSMA corporate website at http://www.gsmworld.com.

Media Contacts:

For the GSMA:
Abigail Faylor (UK)
T: +44 (0)7702 332 350
E: afaylor@webershandwick.com

David Maila (SA)
P: +27 (0)11 566 6322
M: +27 (0)72 502 1854
E: dmaila@webershandwick.com

GSMA Press Office
press@gsm.org

Global Mobile Broadband Connections to Pass 150 million

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Global HSPA connections will pass the 150 million mark by the end of the summer, the GSM Association announced today. With more than 300 networks across 127 countries and approaching 1500 HSPA enabled devices readily available, HSPA has firmly established itself as the world’s dominant mobile broadband technology and the fastest adopted mobile technology of all time.

According to Wireless Intelligence, the following regions are driving global HSPA connection growth:

  • AsiaPac accounts for almost 50 million live HSPA connections today and will have over 56 million by this September
  • EMEA HSPA connections will pass the 50 million mark any day and will have reached almost 60 million by the end of September this year
  • The US currently has almost 32 million HSPA connections with the number expected to rise to nearly 37 million by this September
  • The Americas will have just over four million connections by the end of September

“The tremendous success of HSPA demonstrates the enormous ongoing demand for truly mobile broadband access, said Dan Warren,” Director of Technology, GSMA. “HSPA’s leading position is not just important to the mobile industry – by using a single technology for mobile broadband services globally, we avoid the fragmentation that limits its potential to improve the quality of people’s lives.”

The phenomenal growth of HSPA is set to continue, with 200 million connections expected by Q1 2010. Indeed, with the number of mobile operators in and vendors committed to the GSM family of technologies (HSPA, HSPA+ and LTE) the success of HSPA mobile broadband is attracting a lot of attention from outside the ‘traditional’ mobile industry:

  • The consumer electronics, automotive, energy and utility industries are beginning to understand the possibilities of embedding mobile broadband into their products
  • Governments around the world are making the right spectrum available to support mobile broadband services today and into the future, ensuring their economies benefit from the GDP growth associated with the technology
  • Businesses and end users are embracing the freedom and productivity benefits offered by mobile broadband, driving flexible working practices and enabling impulsive mobile consumers to access the mobile internet on the move

HSPA mobile broadband technology continues to drive diversification across new markets as the true benefits of mobility continue to be embraced in new and innovative ways.

WCDMA HSPA data and forecasts from Wireless Intelligence and are correct as at 20 July 2009.

About the GSMA
The GSMA represents the interests of the worldwide mobile communications industry. Spanning 219 countries, the GSMA unites nearly 800 of the world’s mobile operators, as well as more than 200 companies in the broader mobile ecosystem, including handset makers, software companies, equipment providers, Internet companies, and media and entertainment organisations. The GSMA is focused on innovating, incubating and creating new opportunities for its membership, all with the end goal of driving the growth of the mobile communications industry.

About Wireless Intelligence
Wireless Intelligence is a comprehensive database on the global mobile market which delivers a granular view of the operational performance of the world’s mobile network operators. It is the de facto industry tool for market intelligence with a subscriber base of over 550 of the world’s mobile operators, leading equipment manufacturers, software vendors, content suppliers and consultancies. The service covers all cellular technologies and includes 2,215,000 individual data points spanning 800 mobile network operators and 1,300 networks in over 200 countries.

For more information, please visit GSM World or http://hspa.gsmworld.com

or contact:

GSMA
Paul Nolan, Becky Kiely, Alexia da Silva, CCgroup
mobilebroadband@ccgrouppr.com
T: +44 118 9207650

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Future Mobile Broadband Services Jeopardised By Regulation

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Network spending in decline as regulation puts further pressure on profitability

Europe’s mobile industry is cutting back spending on new networks and services as a growing regulatory burden from the European Union puts profitability under pressure. To justify the imposition of retail price caps, the European Commission has claimed that mobile operators are making excessive profits, but the European mobile industry’s return on capital employed (ROCE) was just 9%* in 2006 compared with more than 20% in software, pharmaceuticals and several other sectors, according to management consultancy A.T. Kearney.

In its response to the European Commission’s public consultation on the voice roaming regulation, the GSMA, the global trade body for the mobile industry, warns that European mobile operators, on average, are only just covering their weighted cost of capital and some of them are making an economic loss. A.T. Kearney estimates that ROCE for the mobile industry in 2007 was equal to or slightly lower than the 2006 figure.

The European Commission predicted that the introduction of regulated price caps on voice roaming calls last summer would lead to a major increase in usage – thereby offsetting possible revenue losses of operators. Yet A.T. Kearney calculates that voice roaming call volumes have increased by only 11% year-on-year to July 2008 while operators’ voice roaming revenues have decreased by 26%**.

Historically, one of the leading investors in Europe, the EU mobile industry’s capital spending has slipped from 13% of revenue in 2005 to 12% in 2006 to 11% in 2007. However, heavy capital investment is needed to ensure the widespread availability of advanced 3G networks, which enable mobile users to access the Internet and other multimedia services at broadband speeds. While the mobile industry’s technology roadmap envisages further dramatic improvements in network performance and capacity, the speed of deployment of new networks may be constrained by the mobile industry’s relatively low level of profitability.

“Europe’s mobile industry is in the midst of another major investment cycle to deploy new services, such as mobile broadband, video downloads, mobile television and mobile email, which enhance Europeans’ daily lives and the economic competitiveness of the continent,” said Tom Phillips, Chief Government & Regulatory Affairs Officer of the GSMA. “However, it is clear that the high level of investment required to provide these services across Europe won’t happen if regulators continue to distort the market by setting prices.”

In contrast to rising prices in other sectors, the average price of mobile services is falling rapidly. In the EU25, domestic mobile voice prices fell by about 13% per annum from 2004 to 2007. Moreover, the average price of data roaming services in the EU fell by 25% in the 12 months to April 2008, while the average price of SMS roaming services fell by 18% in the same period. Recent announcements by individual operators suggest average prices will continue to fall and the GSMA believes there is no need for the European Commission to also introduce price caps on these services.

Drawing on analysis by Professor David Newbery of the University of Cambridge’s Faculty of Economics, the GSMA consultation response also warns that retail price regulation undermines basic microeconomic principles. The most efficient way for a business to cover its costs is to set low mark-ups on products aimed at price-sensitive customers, such as those on low incomes, subsidised by higher mark-ups on products aimed at more affluent customers. This is the logic which explains higher prices for hotel rooms booked in peak holiday season, flexible airline tickets or newspaper advertisements placed on the front page. The primary beneficiaries of the voice roaming regulation are international businesses with relatively low price sensitivity.

“Using different price structures for different customer groups and services to maximise total demand for mobile services is economically efficient, bringing down costs for users,” said Professor Newbery. “But the price caps imposed by Europe’s roaming regulation risk undermining the principle of differentiated pricing, limiting mobile operators’ ability to cover the overhead costs of supplying services for lower-income or more price sensitive customers.”

“The Commission built its case for roaming regulation on two flawed arguments,” added Mark Page, a partner at A.T. Kearney. “Sharp price cuts have not been offset by a corresponding increase in the volumes of calls; and the mobile industry does not earn exceptionally high profits which could offer a buffer against the loss of revenues. These are the facts to counter the Commission’s assertions and anecdotes. We can only hope that they look at the full body of evidence as they consider the future of the roaming regulation.”

*This ROCE figure relates solely to mobile operations in Europe and does not include telecoms companies’ fixed-line networks or their operations outside Europe. It was collated specifically for the GSMA using confidential information supplied by operators for this purpose.
**Based on data supplied by a representative sample of European operators covering approximately half of all roaming traffic.

Notes to Editors:

A full copy of the GSMA’s response to the European Commission’s public consultation on the voice roaming regulation is available.

About the GSMA:

The GSM Association (GSMA) is the global trade association representing more than 750 GSM mobile phone operators across 218 countries and territories of the world. The Association’s members represent more than 3 billion GSM and 3GSM connections – over 86% of the world’s mobile phone connections. In addition, more than 200 manufacturers and suppliers support the Association’s initiatives as key partners.

The primary goals of the GSMA are to ensure mobile phones and wireless services work globally and are easily accessible, enhancing their value to individual customers and national economies, while creating new business opportunities for operators and their suppliers.

For further information contact:
David Pringle
Email: press@gsm.org

GSMA And NGMN Alliance Will Work Together To Steer The Future Of Mobile Broadband

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The GSMA, the global trade body for the mobile industry, and the NGMN Alliance, the group focused on the evolution to the next generation of mobile networks, have agreed to cooperate to help steer the development of mobile broadband communications to give customers a compelling mobile broadband experience.

The two groups will cooperate to ensure that users of next generation mobile networks, such as those based on the Long Term Evolution (LTE) standard, will be able to roam on to existing GSM, W-CDMA and HSPA networks, which now cover more than 80% of the world’s population. The GSMA and the NGMN Alliance will also develop the commercial frameworks and technical platforms necessary to ensure that all mobile services will be able to travel across both next generation networks and existing networks based on the GSM family of technologies.

The two groups have also agreed to co-operate in other essential areas related to the development of next generation mobile broadband services, such as intellectual property rights and spectrum requirements.

“Now is the time for the mobile operator community to bring together all the pieces that are needed to ensure that our industry can meet the rapidly rising global demand for mobile broadband services in the decade beyond 2010,” said Alex Sinclair, Chief Technology Officer of the GSMA. “This agreement with the NGMN Alliance will help ensure that users of the mobile broadband networks of the future will enjoy all the benefits, such as economies of scale, global roaming and interoperability, inherent in the GSM ecosystem today.“

“This cooperation will certainly help to steer the future of mobile broadband and will support the rapid deployment of NGMN technologies,” said Dr. Peter Meissner, Operating Officer of the NGMN Alliance. “Our agreement is not just about liaison, it is project driven and we have clearly identified those areas where the mobile industry needs to cooperate. We are happy to share our milestone achievements in technology evaluation, trials, IPR and spectrum.”

About the GSMA:

The GSM Association (GSMA) is the global trade association representing more than 750 GSM mobile phone operators across 218 countries and territories of the world. The Association’s members represent more than 3 billion GSM and 3GSM connections – over 86% of the world’s mobile phone connections. In addition, more than 200 manufacturers and suppliers support the Association’s initiatives as key partners.

The primary goals of the GSMA are to ensure mobile phones and wireless services work globally and are easily accessible, enhancing their value to individual customers and national economies, while creating new business opportunities for operators and their suppliers.

For further information contact:
David Pringle
GSM Association
Email: press@gsm.org

About NGMN Alliance:

The Next Generation Mobile Network (NGMN) Alliance currently consists of 51 world leading global network operators, technology vendors and universities. The network operators represent more than half of all mobile phone users worldwide and technology vendors represent more than 90 percent of implemented mobile wireless infrastructure. The key objective of the Alliance is to provide a platform for innovation for mobile broadband communications that enables an exceptional mobile user experience – cost-effective and user-friendly services and a range of end user devices like mobile phones and embedded mobile devices for laptops, consumer electronics, game consoles, etc. The NGMN White Paper summarises the vision for mobile broadband communications and includes common operator recommendations as well as requirements for the standards for the next generation of mobile broadband networks, devices and services.

For further information contact:
Marie-Luise Müller
NGMN Ltd. Media Relations
Email: marie-luise.mueller@ngmn.org

HSPA Mobile Broadband overtakes fixed broadband in Indonesia

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The GSM Association, the global trade association for the mobile industry, announced that the number of Mobile Broadband (HSPA*) connections in Indonesia has surpassed the number of fixed broadband connections. At the end of 2007 – just one year after the launch of HSPA in Indonesia – 315,000 Indonesians were accessing the Internet via this high-speed mobile technology, according to Wireless Intelligence, while fixed-broadband connections were approximately 300,000*.

Indonesia is the fourth most populous country in the world with 245 million people and a mobile penetration rate of 39%. Indonesia has four HSPA networks—deployed by Indosat, Excelcom, Telkomsel, and Hutchison 3 Indonesia–and competition among operators to offer broadband services using HSPA is intense.

“Indonesia leads South East Asia in adopting Mobile Broadband services. To consolidate this leadership, it is essential that additional spectrum is released to mobile operators at a reasonable cost,” said Ricardo Tavares, Senior Vice President for Public Policy at the GSMA. “It is also very important that Indonesia develops a medium-term spectrum plan that will enable mobile operators to make broadband services as widely-available and affordable as voice and SMS services.”

Tavares also called on Indonesia to ensure that both domestic and foreign investors in mobile networks are on an equal footing so that the country can maximize investment in Mobile Broadband services and the associated economic and social benefits.

Today, there are more than 32 million HSPA connections worldwide compared with just over 3 million at the end of the first quarter of 2007, according to Wireless Intelligence, a unit of the GSMA. Mobile Broadband continues to gain momentum as more and more operators upgrade their 3G networks with HSPA technology and a growing number of advanced HSPA handsets and modems arrive on the market.

The number of HSPA Mobile Broadband networks worldwide increased by 44 percent to 166 between May 2007 and March 2008. More than 73 countries now have HSPA services. The GSMA estimates there are now more than 467 HSPA devices available worldwide compared with 128 devices in January 2007. These devices include mobile handsets, notebook PCs, data cards, wireless routers and USB modems.

Noted to Editors:

*HSPA – High Speed Packet Access, a software upgrade to W-CDMA 3G networks.

** Source: GlobalComms

The GSMA organized a seminar on, “HSPA-Affordable Broadband for All,” in Jakarta on April 15, with participation of Indonesia’s Minister of Communications, Prof. Dr. Ir. Muhammad Nuh; Commissioner of the Indonesian regulatory agency, Koesmarihati; mobile operators CEOs’ Mr. Hasnul Suhaimi (Excelcom), Erik Aas (Natrindo), and Guntur S. Siboro (on behalf of Indosat’s CEO Johny Swandi Sjam), and 150 telecommunications industry leaders in the country. The seminar was co-sponsored by the Indonesian Cellular Operators Association (ATSI).

About the GSMA:

The GSM Association (GSMA) is the global trade association representing more than 700 GSM mobile phone operators across 218 countries and territories of the world. In addition, more than 200 manufacturers and suppliers support the Association’s initiatives as key partners.

The primary goals of the GSMA are to ensure mobile phones and wireless services work globally and are easily accessible, enhancing their value to individual customers and national economies, while creating new business opportunities for operators and their suppliers. The Association’s members serve more than 2.5 billion customers – 85% of the world’s mobile phone users.

For more information please contact:

Mark Smith or David Pringle
GSMA
Email: press@gsm.org

WRC Takes Important Step Towards Closing the Digital Divide

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The consensus achieved by the International Telecommunication Union at the World Radiocommunication Conference in Geneva is an important step towards closing the digital divide between those with access to broadband and those without, according to the GSMA, the global trade association for mobile operators. The conference has agreed to identify a chunk of UHF* spectrum for mobile broadband services, and a chunk of spectrum in the higher frequency bands to create the capacity required for the next generation of advanced mobile services.

A proposal led by African Governments to identify 72MHz** of UHF spectrum for the provision of mobile broadband services in developing countries and rural areas of the developed world was adopted by Europe, Middle East and Asia. The Americas identified 108MHz of UHF spectrum for this purpose and China, India and Japan are among the countries that have agreed to harmonise their spectrum with the Americas. Harmonisation of spectrum across countries provides manufacturers with the economies of scale necessary to drive down the price of mobile devices.

“This decision by the WRC is an important step towards enabling hundreds of millions of people in the developing world and rural parts of the developed world to gain affordable access to broadband services,” said Tom Phillips, Chief Government & Regulatory Affairs Officer of the GSMA. “Radio signals in the UHF spectrum will travel further than signals in the higher bands, enabling future mobile broadband networks to reach as far as 2G networks do today.”

The GSMA also welcomes the WRC’s decision to identify 200MHz of contiguous spectrum in the 3.4-3.6GHz range available for high-capacity, next-generation mobile networks.

“This Conference has taken an important opportunity to shape the spectrum landscape for the next decade of mobile telecommunications services, giving both operators and their suppliers a valuable roadmap for future investments,” added Mr. Phillips.

Visit the GSMA 2007 WRC microsite

Notes to Editors
*The switchover to digital television will release so-called Ultra High Frequency (UHF) spectrum in the 470MHz to 806/862 MHz band, in which radio waves can travel further and deeper within buildings than is the case in existing mobile spectrum bands. These characteristics would help operators to achieve much broader and more cost-effective mobile broadband coverage, particularly in rural areas.

**790 to 862 MHz

About the GSMA:
The GSMA (The GSM Association) is the global trade association representing more than 700 GSM mobile phone operators across 218 countries and territories of the world. In addition, more than 200 manufacturers and suppliers support the Association’s initiatives as key partners.

The primary goals of the GSMA are to ensure mobile phones and wireless services work globally and are easily accessible, enhancing their value to individual customers and national economies, while creating new business opportunities for operators and their suppliers. The Association’s members serve more than 2.5 billion customers – 85% of the world’s mobile phone users.

For more information please contact:
For the GSM Association:
Mark Smith or David Pringle
Email: press@gsm.org