OIL MAY BE BECOMING an ever-scarcer commodity but there's another trillion-dollar industry grappling with short supply. Telecoms companies are vying to get the rights to what's left of the available radio spectrum. In the United States search engine Google has put an offer of US$4,6bn on the table for the upcoming auction of the 700MHz band to break the stranglehold of the incumbent operators. And in South Africa, thanks to a closely regulated environment, a showdown is looming over the allocation of the 2,5 to 2,69GHz frequency band. <\/p>\n
Cellphone equipment manufacturers, such as Ericsson, and GSM operators (the cellular standard that accounts for 80% of the world's cellphone subscribers) need the spectrum to supply the capacity to further develop 3G as a wireless broadband technology. On the other side are chip giant Intel and US-based operators such as Sprint-Nextel, that are betting billions on rolling out a countrywide Mobile WiMax network, a competing technology that's also in search of spectrum. Many equipment makers, including Nokia and Motorola, are playing both sides.<\/p>\n
While regulatory bodies in Europe and the US have proposed most of the band be given over to GSM, in SA regulator Icasa is still working out the details of allocating the spectrum and it may even opt to auction it off to the highest bidder. Telkom, iBurst, Neotel, the cellphone operators and a number of ISPs already have WiMax trial licences – but that's for the fixed-wireless version of WiMax, which is more of ADSL replacement technology or is often used for network backhaul and uses the 3,5GHz band. <\/p>\n
Global standards for Mobile WiMax, which isn't compatible with fixed-wireless WiMax, is being finalised, but so far no equipment is available in the marketplace (or has even been certified) and the commercial launch of Mobile WiMax networks, such as that of Sprint (its CEO was recently forced out over doubts regarding its $5bn WiMax investment), are some way off. <\/p>\n
Regulators, including Icasa, want to limit the power of incumbents and encourage new players to enter the market, including municipalities and other non-traditional tele-com providers. However, first mover advantage and scale should tip the balance in favour of the GSM and HSPA camp. HSPA – the broadband evolution of 3G – has been around since 2005, there are more than 140 commercial networks, including Vodacom and MTN, in 68 countries and more than 300 different devices (including 137 cellphones and one camera) are available now. <\/p>\n
Research firm Strategy Analytics predicts that there will be 600m mobile broadband subscribers worldwide by 2010 and that 71% will be using HSPA. That compares with only 2,5% for Mobile WiMax, 0,2% for iBurst and 24% for the CDMA-equivalent of HSPA called EV-DO, the cellular technology mainly in use in Asia and South America. The number of mobile broadband subs will also surpass fixed line users by 2010. <\/p>\n
Pieter van der Westhuizen, of Ericsson South Africa, says the sheer scale of cellphone deployment worldwide (3,1bn subs globally in third quarter 2007) brings down costs of equipment, handsets and network rollout. Over 12 years the lowest selling price of a cellphone has dropped from around $350 to currently between $20 and $30. And 80% of the world's population are within cellular signal range, with just 1,5m people out of reach in SA. <\/p>\n
"When you're putting up a GSM base station, the equipment isn't the most expensive portion, it's the site. And Mobile WiMax needs many more base stations to cover the same area." <\/p>\n
Apart from coverage, HSPA has also been closing the gap and download speeds of 14,4Mbps (lab conditions maximum, or so-called peak data rates) and uploads of more than that are already available. SA's networks offer download speeds of 1,8Mbps. <\/p>\n
When Mobile WiMax becomes available in the field it's expected to be able to carry data at rates of up to 32Mbps and 7,1Mbps on up and downlinks respectively. By 2009, HSPA will come in at 42Mbps and 11,6Mbps. LTE (or long-term evolution) of cellular technology will see speeds in excess of 100Mbps. <\/p>\n
The higher the speed, the more bandwidth is needed. In the fixed networks, data traffic overtook that of voice in 2000. In mobile networks the same is set to happen around 2010.<\/p>\n