Digital Dividend

Digital Dividend A technology disruption in Mobile broadband A unique opportunity for connecting India Manas Ganguly

Telecom is a large economic multiplier A 10% increase in tele-density leads to a 0.6% p.a. increase in GDP growth Potential growth dividend for India from telecom sector GDP ($ bn.) Extrapolation of current GDP growth trajectory Higher GDP growth owing to increased tele-density Present value difference of $250-300 bn However, this incremental value does not all accrue to the operators, but rather to other beneficiaries Furthermore, it occurs over time – the “cost” has to be borne upfront Thrust in Rural Telecom sector can further increase GDP by $520 bn. over 8 1 / 3 year period

Of Telecom Opportunity and Rural Upliftment

Need for a communications model that reaches out to the remotest rural citizen
Wireless technologies provide low cost reach to the end customer with ICT solving many rural problems
Appropriate wireless spectrum that provides widest possible reach (upto 30 km) must be dedicated for rural use
What ails Rural Up-liftment?

E-Connectivity
Broadband connectivity
Data Centre services
VoIP & Value Added Services
Web hosting for Portal based information services
Video Conferencing
VPN Extranet services
Applications that can secure quality of life in agri - economies 19th June 2009
E-Agriculture
On-line commodity procurement
Commodity information portal
Agricultural credit
Pre-harvest
Post-harvest
Insurance
Irrigation
E-Governance
State Electricity Board
Water Supply
Municipality
Telephone
Roadways
Railways
Regional Passport Office
Commercial taxes Department
Income Tax
Education
Health
Public Service Commission
Police
Sports
Labor Department
Election office
Census office
E-Commerce
E-Banking
Rural ATM
E-Payment
E-Procurement
Wholesale (Mandi)
Retail
Tele-marketing
PKI services
Secured transaction portal
E-Education
Extensive use of Web casting/ Multicasting to educational institutions
High bandwidth at Seminar Hall/Information Hall at Community Center
Tele-Medicine
Connectivity to super specialty hospitals and medical institutions
E-Entertainment
Video broadcast
Video-on-demand

Agenda
Growth Bottleneck
What is Digital Dividend
Present usage
Proposed usage
Benchmarking with other countries
Key Benefits
Challenges
Way Ahead

Spectrum Requirement
In India there is a real shortage of spectrum suitable for the roll-out of mobile broadband
Already spectrum in 900 MHz, 1800 MHz is much fragmented.
More spectrum must be made available quickly to ensure the full social and economic benefits of mobile broadband can be achieved
Allocation of the 2.1GHz and 2.6GHz spectrum bands will help to drive the deployment of mobile broadband across India.
Limited spectrum available in 2.1 GHz for 3G.
Issues still needs to be resolved in 2.5-2.6 GHz band.
India needs to consider new frequency bands (like 700 MHz) for the future growth of mobile/ mobile broadband services.

Spectrum bands for mobile broadband for mobile broadband Making Mobile Broadband a reality
For rural coverage, allocation of the 698-806MHz band – the Digital Dividend – is critical for widespread coverage
The 700 MHz band and is ideal for deployment of LTE being considered by many operators worldwide

Globally, for broadband - mobile is the answer 1.1 Billion Lines Only 1/6 world’s population 4 Billion Connections Mobile networks will connect the world Fixed Broadband Mobile

Mobile Broadband: Making a real impact in India
3G investment* in India will deliver over $70 billion economic benefit
India would have gained over $16 billion (PPP) in the last 2 years but for delay in introduction of high speed mobile BB.
10% increase in broadband penetration can deliver up to 1.4% increase in GDP
* Investment of $20 billion over 5 years Source: McKinsey, 2009; LECG, 2009. $ Mobile Broadband has a significant impact on the economy GDP

Agenda
Growth Bottleneck
Present usage
Proposed usage
Key Benefits
Challenges
Way Ahead

Digital Dividend
Digital TV is many times more spectrally efficient than analogue TV, which means UHF spectrum will be freed up
Large amount of spectrum that would be freed up in case of switchover from analogue to digital terrestrial TV is known as the Digital Dividend.
Digital compression technologies and coding systems make it possible to squeeze much more information into a radio signal than in the case of analogue technology

Digital Dividend
The analogue TV switch-off represents a “once in a generation” opportunity for a significant reallocation of spectrum
This spectrum has excellent propagation characteristics and can be used very effectively to roll out mobile broadband services in rural areas and to provide in-building coverage
ITU-R identified digital dividend spectrum for IMT in the frequency band 698-806 MHz in India as well as seven other countries of Region 3
Mobile broadband will be the most effective way to use this band, especially in rural areas without fixed networks, where many consumers now use only a mobile phone or have only mobile broadband

Digital Dividend
It is approximately 70% cheaper to provide mobile broadband coverage in the 698-806MHz band than at 2100MHz
This means networks can be rolled out quickly and cost-effectively, bringing cheaper services to consumers

Agenda
Growth Bottleneck
Present usage
Proposed usage
Key Benefits
Challenges
Way Ahead

Present usage of 700 MHz in India
Doordarshan uses this band for connecting outdoor broadcast vans to their studios.
In addition, other users have deployed both fixed and mobile networks in this band.
Coordination with or vacating the incumbent users of this band is time consuming.

700 MHz band – Uses/users
700 MHz band - Mainly being used by the analog TV broadcast services, at present
Digital broadcasting is roughly six times more efficient than analogue, allowing more channels to be carried across fewer airwaves.
Plans for digital switchover will allow for an increase in the efficiency
This cleared spectrum – the Digital Dividend – offers real opportunities for wireless innovation.

Status of 700 MHz Band
UHF Band IV
14 TV channels available in the UHF Band-IV (470 -582 MHz) with 8 MHz channel bandwidth.
Doordarshan operating about 330 transmitters in this band.
Doordarshan’s three digital TV transmitters at Kolkata, Chennai and Mumbai are also operating on an experimental basis in this band.
Recently, Doordarshan started its Mobile TV service in Delhi (using DVB-H technology) in this band at channel 26 on experimental basis.
Band Spectrum Number of TV Channels available in analogue mode TV Channel Number UHF Band IV 470-582 MHz 14 21 to 34 UHF Band V 582-806 MHz 806-960 MHz 28 --- 35 to 62 ----

Status of 700 Mhz Band
UHF Band V
In this frequency band, there are 28 channels available with 8 MHz bandwidth in the sub-band from 582 to 806 MHz.
Doordarshan has not been assigned any channel in this sub-band for analogue TV transmission.
However, frequency earmarking has been made in favor of Doordarshan to operate Digital Transmitters in four Metros.
In UHF band V, Defence and BSNL are operating point to point microwave links in 610 – 806 MHz,
The UHF Band V above 806 MHz has been extensively assigned to cellular mobile services etc.

Agenda
Growth Bottleneck
Present usage
Proposed usage
Key Benefits
Challenges
Way Ahead

Why is the 698-862 MHz band critical?
It is approximately 70% cheaper to provide mobile broadband coverage at frequencies (approx. 800MHz) than over 2100MHz
This means networks can be rolled out quickly, cost effectively, bringing cheaper services to consumers
Source: SCF Associates Study Source: SCF Associates Study Statistic shows the variation in Capex and no of base stations in different frequency bands x1 x1.5 x3 x5 x7 x12 Number of base stations 2 5 7 10 20 15 x1 x1.5 x3 x5 x7 x12 UHF Band

Mobile’s share of Digital Dividend is essential
25% of the 400 MHz analogue TV spectrum allocated to new Mobile Broadband services
The soaring demand for Mobile Broadband requires additional spectrum
LTE needs harmonised spectrum – the lower the band, the better
700MHz and 2.6 GHz bands
No spectrum; no incentive to invest in LTE
Mobile broadband facilitates economic growth arising from the Digital Dividend
450MHz 470MHz 698MHz 790MHz 3400MHz 2100MHz 862MHz 2500MHz 3600MHz 900MHz 1800MHz COVERAGE Low Cost of Deployment CAPACITY High Cost of Deployment MOBILE MOBILE MOBILE MOBILE

700 MHz band – Potential Uses/user
Wireless broadband
Digital terrestrial television
High definition TV
Mobile television
Data broadcasting

Proposed Band Plan for India
UHF Digital Dividend 698-806 MHz
698-790 MHz band identified by World Radio-communication Conference (WRC) 2007
Characteristics of the proposed band – Dual duplex – Reverse duplex
700 MHz band should be reserved for FDD to improve overall spectral efficiency & allow deployment of LTE by multiple operators.
Most efficient solution is a 2 X 50 MHz arrangement (with 8 MHz gap)
698 806 8MHz 748 756 Downlink Uplink Description of 2x50MHz band plan

This plan has several advantages, as listed below:
will minimize risk of unfavorable fragmentation of the band for mobile broadband usages, thereby reducing complexity of terminals.
utilizes largest amount of available spectrum hence most spectrally efficient.
Provides reversed duplex transmission arrangement, i.e., higher frequency band for uplink for better co-existence with adjacent radio communication (broadcast) services.

Largest amount of the available 108 MHz in the 698-806 MHz band
Reversed duplex arrangement is to avoid and limit interference between broadcasting and mobile services at 698 MHz and 806 MHz respectively
Two adjacent duplex arrangements can make the gap between DL (downlink) and UL (uplink) blocks smaller
Two-duplexer arrangement can be implemented by current standard filter technology and no state-of-art filter design is needed
806 MHz 698 MHz (2x50 MHz)

Spectrum defines the choice of technology * Not possible in present scenario because of non availability of spectrum inline with global harmonization.

Agenda
Growth Bottleneck
Present usage
Proposed usage
Key Benefits
Challenges
Way Ahead

ICT readiness drives economic development 0 2.5 3.5 3.0 0 6.0 5.5 5.0 4.5 4.0 3.5 3.0 4.5 4.0 5.0 5.5 6.0 Increasing ICT readiness (Digital opportunity index)** Increasing economic competitiveness (Global competitive index)* * Composite index of indicators relating to institutions, infrastructure, macro-economy, health, education, market efficiency, technological readiness, business sophistication, and innovation ** Composite index of indicators relating to coverage/access, tariffs, equipment penetration and broadband adoption Source: World Economic Forum; McKinsey Developed economies Emerging and developing economies

The band 698-960 MHz in ITU 698 MHz 790 MHz 862 MHz IMT-2000 GSM/WCDMA Region 2 (Americas) Region 1 (EMEA) Region 3 (APAC) 894 MHz IMT-2000 cdma2000/WCDMA BROADCASTING 880 MHz 824 MHz 806 MHz 960 MHz 894 MHz IMT-2000 cdma2000/WCDMA 824 MHz IMT-2000 GSM/WCDMA 880 MHz 960 MHz 698 MHz 790 MHz 862 MHz MOBILE & IMT MOBILE & IMT MOBILE & IMT (9 countries) MOBILE & IMT Momentum

European Digital Dividend band
In Europe, Digital Dividend band is 790 – 862 MHz which is different from the US, India and most of the region 3 countries.
Following band plan is being considered at ECC for 790 – 862 MHz band for IMT applications.
791 – 821 MHz D/L frequency paired with 832 – 862 MHz U/L frequency using reversed duplex directions
30 + 30 MHz FDD with 41 MHz duplex separation and 820 – 832 MHz (11 MHz) as the centre gap.
791 MHz 821 832 862 MHz

US considerations
Parts of the 698-806 MHz band auctioned for mobile communications
Arrangement segmented into two major bands with services related to mobile, high power broadcasting and public safety
(2x18 MHz) + (2x10 + 2x10 MHz) 716 728 746 756 776 786 768 798 698 758 788

The maximum use of this arrangement with specifications in 3GPP is this 2x18 MHz + 2x20 MHz.
Actual 3GPP implementation is limited to band 13 (primarily Verizon) and band 17 (primarily AT&T)
Inclusion of broadcasting and public safety and division into two segments
There is a risk that other countries with the intention to follow with a “US-like arrangement” will have similar type of inclusions of services that are not mobile communications,
Country specific requirements may lead to the need for “country specific” solutions, specifications, and implementations.
“ US-like arrangement” will lead to global fragmentation of the UHF-band.
US considerations

Regional harmonisation
To achieve the full benefits of the Digital Dividend, markets must align regionally to realise potential economies of scale, and drive down handset and network equipment costs
It is therefore important that India aligns with an internationally recognised band plan to facilitate roaming and interoperability
The ‘2x50MHz option’ offers India’s businesses and consumers the best opportunity to realise the greatest social and economic benefits of the spectrum, other options are available

Agenda
Growth Bottleneck
Present usage
Proposed usage
Key Benefits
Challenges
Way Ahead

BTS deployment in different spectrum bands Lower the spectrum, more the coverage per BTS z 19th June 2009

700 MHz vs. 3500 MHz – Half the range, 5 times more expensive Operating frequency (Mhz) Cost and range of wireless networks vs. frequency Cell radius (km) Wireless network costs ($k per km 2) Weighted average cost Urban Suburban Rural range 0 5 10 15 0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 5500 0 10 20 30 Source: Deutsche Bank & BCG Analysis 700 Mhz 3500 Mhz Underlying spectral band is critical to performance and cost 19th June 2009

Advantages of 700 MHz Band
Better coverage – On street & in-building
Low network deployment cost
Strong ecosystem
Less equipment complexity – both terminal & BTS

700 MHz band in India
700 MHz band in India can provide the future growth of IMT because of the following reasons-
Spectrum below 1 GHz extremely useful for mobile services
Better coverage characteristics ensure network deployments to cover larger areas with fewer base stations
Reduce capital expenditure, which makes deployment in rural or high-cost regions economically viable
Better in-building coverage
This band especially relevant for India, as majority of future growth expected from rural India

Advantages of Proposed band plan
Minimize the complexity of the terminals
High cell capacities
Minimize the cost and complexity of equipments
Spectrum efficient 2x50 MHz
Better co-existence with adjacent radio communication services

Benefits of UHF 700 MHz Band
The possibility to use 698-806 MHz band for mobile communications provides a rare opportunity for providing cost effective wireless broadband services.
Because of its excellent signal propagation characteristics, less infrastructure is required to provide wider coverage
Communication services can be provided in rural areas at lower cost( savings in capex)
Will help to bridge the ‘digital divide’ in India
Provide affordable mobile broadband to help develop a knowledge based economy.
Access to harmonized spectrum in UHF is a key to deliver mobile broadband services specially to the masses

Benefits of Mobile Broadband Services
Allocating the band to mobile broadband services, would have several economic and social benefits.
Economically, it would lead to employment generation, increased innovation, productivity and competitiveness.
- Several reports also suggest that 10% increase in broadband penetration would lead to upto 1.4% increase in GDP.
Mobile broadband would improve the overall quality of life
Mobile broadband would also play a critical role in improving health, education, tele-medicine, and social mobility, thereby bringing rural communities online.

Advantage: 700 MHz Higher Coverage + Lower costs

Advantage 700 MHz Higher Coverage + Lower costs

700 MHz band advantage
Better propagation characteristics.
Ideal for providing wireless service in low population density regions, such as rural India
Target resource for rural broadband wireless access worldwide.
Less Infrastructure – Reduced costs
Reduce capital expenditure, which makes deployment in rural or high-cost regions economically viable.
An LTE network at 700 MHz would be 70% cheaper to deploy than an LTE network at 2.1 GHz - GSMA.
Two to three times as many less sites required for initial coverage at 700 MHz compared to 2.1 or 2.5 GHz

Agenda
Growth Bottleneck
Present usage
Proposed usage
Key Benefits
Challenges
Way Ahead

Conclusions
India has limited bandwidth available in other internationally harmonised mobile bands such as the 900, 1800 and 2100 MHz bands
The 700Mhz band has the wide bandwidth required to support FDD/LTE deployment
The rapid roll-out of mobile networks and extensive subscriber growth in the Indian market, mean that making maximum spectrum available in the Digital Dividend band is critical.
Harmonisation with an international band plan will benefit Indian businesses, consumers, government and the mobile industry. Fragmentation creates unnecessary costs.
India can take an international leadership position by choosing an option such as the 2x50MHz option for the band or other proposed Band plan , ensuring it will benefit from economies of scale

Regulatory Levers that influence economics for rural broadband deployment

TRAI’s recommendations
Growth of Telecom Services in Rural India (Oct.2005)
DoT should allocate this band for use by advanced wireless technologies for rural connectivity.
Allocation and pricing of spectrum for 3G and broadband wireless access services (Sept.2006)
DoT should coordinate some part of this spectrum for making it available for rural wireless networks in the near future.

COAI Recommendations
585-698 MHz be earmarked for Mobile TV / Digital Broadcasting
698–806 MHz be earmarked for IMT applications
Thus, there is a need to allocate 100 MHz of digital dividend band to mobile services

Mobile’s role in economic value
Spectrum release
700MHz
2.1GHz
2.6GHz
Private capital investment
Chinese operators to invest $59bn in 3 years upon receipt of 3G licenses
Job creation
Chinese 3G investment could create up to 36 million new jobs
In Africa, 1 direct mobile job creates 100 indirect jobs
GDP
10% increase in mobile penetration boosts GDP 1.2%
Faster broadband uptake in Europe could increase GDP by €450bn and create 1.8m new jobs
Green
ICT can reduce total emissions by 15% by 2020, a volume of carbon dioxide five times the ICT sector’s own footprint (GeSI)
Meet consumer media demands
Media access habits changing:
Mobile broadband internet content
IPTV
Broadband infrastructure roll out
Mobile costs 1/10 th that of a fixed line connection (World Bank)
100 million Europeans beyond the reach of fixed line broadband
Productivity, growth, innovation
New tax receipts
€ 124bn contributed by mobile in EU in 2007, 71% of total mobile revenues
$1 invested in mobile in Africa generates around $0.75 in tax revenue
Government Enabler Immediate benefits Long term benefits

Conclusion
Digital Dividend Band can spur rapid socio economic growth of Rural India
Last lap for communication in rural areas can be cost effective only through the UHF spectrum band
A shared model between rural commercial and public safety services can be an effective answer to Disaster Management
Aggregate of 60 MHz band is required for rural in the sub-GHz spectrum to plan rural GDP creation of $ 520 bn. in 8 years
Decision on Digital Dividend Band can
Bridge the Digital Divide in India in the shortest possible time, say 5 years
Significantly enhance Rural GDP and quality of life in Rural India

References
Sandeep Saxena: Nokia Siemens Networks
T V Ramachandran, Director General, COAI
Robindhra Mangtani, Senior Director, GSMA
R.N. Padukone, Pr. GM (Corporate Planning) BSNL
Arif Khan, Director Regulatory Affairs, Ericsson India
Sudhir Gupta, Advisor, TRAI

Thanks Please add your comments to enrich the discussion Reach me: [email_address] , Profile: www.linkedin.com/in/manasganguly Blogs:www.ronnie05.wordpress.com www.newspaper-posts.blogspot.com Tweeting @ronnie051178

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Digital Dividend

by Manas Ganguly

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