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BARCELONA, Spain–Mobile network operators traditionally use Mobile World Congress to call for lower taxes and more wireless spectrum. This year, a new word has entered the wish list: harmonization.
The mobile industry today must deal with a hodgepodge of electromagnetic frequencies that differ from carrier to carrier and country to country. Franco Bernabe, chief executive of Telecom Italia, wants to see not just more spectrum for wireless operators, but also spectrum that’s not so fragmented.
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“It’s not just about having the right amount of spectrum. It’s critical that the spectrum is harmonized on a global basis,” Bernabe said in a speech here at the mobile conference.
That harmonization will increase “cost efficiencies,” which is to say that the same phones and network equipment will work across a broader part of the world, he said.
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One cautionary tale about what’s wrong was illustrated by the launch of Apple’s iPhone 5. “Europe supports three different LTE spectrum bands, so LTE is only enabled in certain countries and for certain operators,” he said.
Trying to make the case that harmonization is good for consumers and not just carriers’ bank accounts, he added that harmonization “ultimately will make mobile services more accessible and affordable for consumers” and that “users will be confident they will have service as they roam from country to country.”
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But harmonization is easier said than done. Countries already have plenty of difficulties grappling with demand for radio-frequency spectrum even without trying to iron out cooperation with other countries.
Mobile World Congress is run by the GSMA, an association of mobile operators originally based in Europe but now spanning the globe. Year after year at the show, the operators call for more spectrum, less regulation, and less onerous taxation.
It may sound selfish, but the companies do indeed face tremendous challenges. They must build huge, complicated wireless networks, and often they’re obsolete before they’re even fully deployed. The current transition is to the 4G LTE (Long-Term Evolution) standard, which offers not just higher data-transfer speeds but also a snappier response because of lower communication delays.
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LTE will further the explosion in mobile data traffic growth, which continues to explode. At AT&T, it’s jumped by 30,000 percent over the last six years, said AT&T CEO Randall Stephenson. And China Mobile Chairman Xi Guohua added, “In 2012, China Mobile data traffic volume increased by 187 percent.”
The carriers must make these investments as earlier revenue sources — voice communications and text messaging, for example — dwindle. Replacing them are “over-the-top” (OTT) services from companies like Google and Facebook. Those services run over the carriers’ networks, but the profits from them go to the OTT companies, and governments take a much more laissez-faire view of them.
“OTTs are not regulated in the same ways we are,” said Vittorio Colao, CEO of Vodafone Group during his time on the stage.
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And it’s hard to find new revenue sources, Guohua said. “The growth model driven by customer net addition cannot [be] sustained,” he said, even in China, where there are 1.1 billion mobile phones already in the market. At the same time, competition takes place at a higher level with more companies.
“It’s no longer the competition with a single company, but an ecosystem,” he said, pointing to constellations of mobile devices, app stores, and online services.
One way the carriers are fighting back is with open, ecosystem-resistant technology — specifically Firefox OS, which 18 carriers endorsed yesterday. Telefonica CEO Cesar Alierta, the earliest Firefox partner, called Firefox OS “the answer to make the Web the platform and break monopolies.”
Each of the five carrier leaders who spoke today complained about regulations — difficulties that incumbents face with some preferential treatment of new operators, for example, and that require operators in Europe to bid for the same wireless spectrum every 15 years.
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AT&T’s Stephenson said he prefers the U.S. auction approach with perpetual licenses to “big blocks” of spectrum and governmental oversight that makes it possible for carrier to sell it to one another.
“In the U.S., you’ve seen over the last three years spectrum changing hands at a very fast pace,” which means it ends up used very efficiently, Stephenson said. “The term of licensing is critical. Regulators can help spectrum be fluid and liquid.” Short-term licenses mean that mobile operators can’t be sure it’s worthwhile to invest in network infrastructure, investments that take years to pay off.
Stephenson also called for lower taxation to encourage expensive capital equipment purchases.
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