Fast-track mobile spectrum allocations to meet surging demand and boost economy

The Australian Government needs to fast-track spectrum allocation decisions to ensure the mobile telecommunications industry can meet surging demand.

Despite the economic slowdown, mobile broadband new subscribers tripled in the first half of this financial year.[i]

The Chief Executive of the Australian Mobile Telecommunications Association (AMTA), Chris Althaus, told the RadComms09 Conference in Sydney today that Australia could not afford indecision on three key spectrum allocation issues at a time of unprecedented economic volatility.

He said mobile operators needed certainty about retention of their existing spectrum allocations, access to the 2.6GHz band and at least 120MHz of useable spectrum from the Digital Dividend so Australia can meet and benefit from the rapid surge in demand for mobile broadband services.

At RadComms09 AMTA released a report it commissioned Spectrum Value Partners, in association with Venture Consulting, to undertake on the potential economic value of the Digital Dividend in a range of scenarios.

The report found that the Australian economy would be boosted by up to $10 billion if at least 120Mhz of useable spectrum unlocked from the Digital Dividend was made available for mobile broadband use.

The report derived an “optimal split” of Digital Dividend spectrum between mobile telecommunications and broadcasting use. The optimal split occurs when the net economic value generated from combined mobile and broadcasting services is at a maximum.

Justin Jameson, CEO of Venture Consulting, said: “This study uses the same methodology as our respected European study and shows that allocating 120MHz of useable UHF spectrum to the mobile industry would maximise the net economic value to the Australian economy.”

Mr Althaus said: “The mobile telecommunications industry needs access to sufficient spectrum to ensure the deployment of new and competitive mobile broadband technologies, such as Long-Term Evolution (LTE), will not be delayed into the Australian market.”

LTE will significantly enhance the mobile broadband experience for users, who will be able to access more performance-demanding applications with peak download speeds up to 100 Mbps.

Mr Althaus said: “It is critical that network owners have sufficient lead time to secure the capital for investment in spectrum. If the industry fails to get sufficient spectrum there will be fewer services on offer, potential service delays and disruptions.

“Spectrum is the infrastructure highway that carries mobile services – without it service is not possible. What’s more, the type and amount of spectrum made available for all mobile telecommunications services influences performance and service levels.”

Mr Althaus said mobile telecommunications played a key role in streamlining business processes, reducing costs and increasing productivity of workers who are no longer constrained by a ‘fixed’ work environment.

Increasing take up of 3G and the ability to access and exchange complex data wirelessly will contribute an additional $2.1 billion to Australia’s economic output by 2010[ii].

Analysts predict that mobile broadband will make up more than two-thirds of global broadband subscriptions by 2012 and mobile devices will be the primary tool to connect to the internet by 2020[iii]

“The mobile industry is one of consistent growth and will contribute to Australia’s recovery from the economic downturn. The industry is poised to continue investing in next generation networks that will drive Australia’s productivity and boost growth, but only if there is a degree of certainty about the availability of key spectrum allocations,” Mr Althaus said.

A copy of the SVP report is available here

[i] Goldman Sachs JB Were, Telecommunications Services, April 3, 2009. Figure compared to first half 2007-08 [ii] Access Economics, Australian Mobile Telecommunications Industry: Economic significance and contribution, June 2008 [iii] Pew Internet & American Life Project , The Future of the Internet III, 14 December 2008