A substantial amount of low-frequency spectrum is being freed up by the switchover from analogue to digital terrestrial television. This is known as the Digital Dividend. The 700MHz band (698–806MHz) offers an excellent balance between transmission capacity and geographic coverage. Because of the good propagation characteristics of radio signals in low frequencies, base stations can serve relatively large geographic areas, providing communications services in rural areas at a lower cost.
However, as the 700 MHz band is currently allocated to broadcasting services in many countries in Latin America, releasing Digital Dividend spectrum to enable universal mobile broadband requires a change in current paradigm.
What is the Digital Dividend?
Digital Dividend spectrum is defined as the upper part of the UHF band — 700MHz in the case of Latin America — and is currently allocated to broadcasting services in many countries in the region. As a result of the switchover from analogue to digital terrestrial television, more than 100MHz of spectrum will be freed up, enabling mobile operators to provide broadband services in this band. This represents more than 40% of the current spectrum allocated to mobile services, on average, in Latin American countries
Because the 700MHz band can provide higher transmission capacity to mobile services, it will enable mobile operators to respond to the growth of data traffic and improve indoor coverage. In many countries it is not necessary to wait for the analogue switch-off to free up the spectrum and use it to speed up broadband development.
The significance of the Digital Dividend for increased transmission capacity and coverage for mobile broadband
Latin America has experienced an explosion in the use of mobile broadband, with data traffic increasing exponentially. Additional spectrum is required to meet consumer demand. Today, the average amount of spectrum allocated to mobile is around 220MHz per country. The Digital Dividend allows an additional 90MHz to be added in each market.
Not only does the Digital Dividend create an efficient use of spectrum to keep up with the increasing demand for mobile broadband services from citizens, but by extending broadband networks to rural areas of the continent, it has the potential to make a significant social impact. In urban areas, the same band can improve signal reception in buildings.
The role of the Digital Dividend in democratizing internet access
The Digital Dividend offers a great opportunity to create universal access to broadband services in Latin America, if the 700MHz band is allocated for mobile broadband.
With this spectrum, coverage would reach up to 92.7% of the Latin American population, increasing coverage by up to 31.5%.
With an average annual growth of 6.8% in broadband usage in Latin America, the additional mobile broadband coverage would significantly increase broadband penetration, which is a public policy objective of most governments in the region.
Economic benefits from the Digital Dividend in Latin America
Increasing mobile broadband penetration in Latin America through the Digital Dividend will not only improve consumers’ lives but bring economic benefits including employment, productivity, competition and higher GDP. At the same time, it will lay the foundations for new commercial and public services such as eCommerce, eLearning, mobile health and many others.
In 2011, the GSMA commissioned research from AHCIET to better understand the potential economic benefits from the Digital Dividend in Latin America, measuring the impact of allocating the 700MHz band for mobile broadband services. Renowned researchers Raul Katz and Ernesto Flores- Roux (TelecomAdvisoryServices, or TAS) conducted the study, the first to investigate this subject for Latin America.
The concludes that allocating the 700MHz band to expand mobile broadband could contribute up to US$14.8 billion to the Latin American economy and spreading service coverage to 93% of the population. This figure represents the full economic impact generated by mobile broadband, starting from the auction of Digital Dividend spectrum and the acquisition of network infrastructure, support and marketing services. This greatly surpasses the projected benefits of allocating the band to digital television broadcasting over channel 51 — approximately US$3.5 billion.
Citizens demand mobile broadband with the same geographic coverage they have gotten with voice services, and with the same performance they experience with fixed-line broadband. In Latin America, mobile networks are the only effective way to provide widespread broadband, and Digital Dividend spectrum will play a key role in making this possible.