5G Will Play a Key Role in Economic Recovery but Spectrum Availability is Key

S. Soh

Summary Bullets:

• 5G and the ecosystem around it will be a major contributor to the economy and facilitate economic recovery post-COVID.

• Regulators need to provide greater certainty on spectrum availability to allow operators to plan their investment and activities to get new 5G services to the market in a timely manner.

2020 is expected to be the year of 5G. With leading carriers already launched 5G in 2019, the rollout of 5G was ramping up and new 5G-ready devices were in the product pipelines of major manufacturers. However, 5G’s momentum, like many other segments of the economy, has been impacted by the global COVID-19 pandemic. One of the key challenges for mobile operators is the availability of 5G spectrum. Mobile operators’ 5G rollout plans are often closely linked to the spectrum availability made by regulators. Unfortunately, the virus outbreak has led to some regulators putting planned spectrum allocations/auctions on hold due to health and financial reasons. Meantime, operators are also seeing a significant spike in mobile data services over the last two months. For example, in Spain, the telecom operators saw a 40 percent increase in IP traffic, a 25 percent increase in mobile data, and a five-fold increase in OTT messaging traffic (e.g., WhatsApp).

Some regulators recognize the need to move forward with 5G spectrum allocation. In New Zealand for example, the regulator has decided to directly allocate 5G spectrum in the 3.5GHz band to operators (Dense Air, Spark, and 2degrees) without conducting an auction. It is also possible for spectrum auctions to be carried out while addressing health concerns. Regulators could set up online auctions or take extra precautions for on-site auctions. Hungary for example, had on-site health monitoring during its 5G auction process and enforced social-distancing precautions. The Hungarian regulator NMHH concluded the spectrum auction on March 26, 2020 giving operators access to spectrum in the 700 MHz, 2.1 GHz, and 3.6 GHz bands. NMHH has encouraged operators to install 5G at locations of social importance including hospitals and transport networks. In the longer term, the regulator also views 5G playing a key role in economic development and enabling a faster recovery of the economy post-COVID.

In other jurisdictions, regulators undertook temporary relief measures to give mobile operators access to additional spectrum to increase network capacity. In the U.S. for example, the FCC has allowed major operators Verizon, AT&T, T-Mobile, and U.S. Cellular to temporarily borrow spectrum from existing licensees in the 600 MHz and AWS frequency bands (1700 MHz / 2100 MHz) for a 60-day period. In Ireland, the regulator CommReg has allowed operators to utilize spectrum in the 700 MHz band on a temporary three-month basis. Further, the regulator will allow spectrum in the 2.6 GHz band to be used at select locations such as hospitals and allow operators to utilize the 2.1 GHz band for 4G as well as the previously assigned 3G. In Saudi Arabia the regulator CITC released 40 MHz across the 700 MHz and 800 MHz band on a temporary basis, to boost performance of 4G and 5G networks. Similarly, South Africa’s ICASA has assigned spectrum on a temporary basis to Vodacom, MTN, Telkom, Rain and Liquid Telecom.

Besides these temporary relief measures, there are other techniques that can be used to improve spectral efficiency. The licensed shared access (LSA) or shared spectrum approach allows licensees to access underutilized licensed spectrum while protecting incumbent user from harmful interference. FCC’s authorization of the 3.5 GHz CBRS band is one example. This allows operators to access spectrum that is not used by the incumbent licensees in a particular geographical area to offer 5G services. Some operators are also looking at dynamic spectrum sharing (DSS) for re-farming existing 4G spectrum for 5G. In Germany for instance, Deutsche Telekom and Vodafone Germany have recently indicated the use of DSS to accelerate their 5G coverage expansion by using spectrum previously used for 4G or 3G.

5G is not just 4G with faster speeds. A technology ecosystem is now being developed around 5G to enable many new possibilities. Particularly in the enterprise space, 5G will become an important element of the corporate network that drives innovation, business transformation and productivity. Combining the ultra-low latency characteristic of 5G with network slicing and edge computing, different players are collaborating to develop solutions for a myriad of industry-specific use cases. For example, cloud providers (e.g., AWS Wavelength and Microsoft Azure Edge Zone) are partnering with telecom providers to enable cloud developers to build applications by accessing cloud compute and storage services at the edge of the telecom network. In February 2020, China Unicom, Deutsche Telekom, EE, KDDI, Orange, Singtel, SK Telecom, Telefonica, and Telecom Italia Mobile (TIM) joined forces, with the support of the GSMA, to develop an interoperable platform that will make edge computing capabilities widely and easily available to developers and software companies that sell to enterprises.

The pandemic is slowing down 5G rollout to some extent, but it is also bringing industry players together to accelerate the development of 5G-enabled solutions. In the longer term, 5G and the ecosystem around it will be a major contributor to the economy touching all industry sectors and will facilitate economic recovery. However, the availability of 5G spectrum will be a constant challenge. There are different approaches that regulators can adopt to improve spectrum efficiency. However, it is crucial that regulators provide greater transparency and visibility into their spectrum planning and allocation timeframe as well as regulatory changes to the use of spectrum (e.g., sharing and leasing). Greater certainty on spectrum availability will enable mobile operators to plan their investment and activities to get new 5G services to the market in a timely manner.

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