DAB Vs cellular - how hard can it be?
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Per Borga from Teracom looks at the differences in delivering radio over cellular data compared to DAB. What are the challenges, is it possible and what are the costs?
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DAB Vs cellular - how hard can it be?
- 1. Radio via mobile broadband - How hard can it be?
- 2. 75% daily reach 5,9 million swedes, TSL 125 min/day
- 3. 270 billion minutes/year 10 times more than all voice calls
- 4. 190 000 Terabyte/year More than all transferred data, for a full year, in all mobile phone networks
- 5. € 860 millions/year The alternative is €10-20 millions per year for terrestrial broadcasting
- 6. Will new technology change this? LTE and broadcasting mode (eMBMS) is required to handle peak loads, but it will not lower the costs or capacity needed
- 7. Mobile data will come down in price? Might happen but prices will have to fall by…
- 8. 96 %
- 9. Coverage? 99% of pop, according to the MNOs
- 10. € 420 millions in additional investments For MNOs to reach 99,8% (assuming they share infrastructure)
- 11. Contingency? Mobile phone networks today are “best effort”. What if something happens?
- 12. Snapshot of mobile phone network during the storm “Simone”. Yellow means interruption. Broadcast radio worked flawlessly.
- 13. € 450 millions in additional investments If one of the MNO:s upgrade with power back-ups, redundancy, etc.
- 14. Who will pay? Q: Would you pay 50 SEK (€ 6) per month to get additional radio channels?
- 15. 3 %
- 16. The digital divide? 1,2 million Swedes are not on-line today
- 17. Consequences for the listeners Not free to air No listening cross-borders Subcriptions and SIM-card to each device Not for everyone….
- 18. Consequences for broadcasters Very expensive Must sign agreements with all MNO:s Radio services will not be prioritized Cannot serve everybody…
- 19. Summary o Large amounts of data o High costs o Not for everyone o New technology will not change this o Listeners won’t pay o Broadcasters can’t pay ... A better proposition is to remain on (and digitize!) the terrestrial broadcasting network..
Editor's Notes
- The background is the ongoing digitalization process in Sweden. The Swedish government believes that the expansion of digital radio is to be preferred instead of concentrating solely on web radio. The Swedish government are now drafting a plan for the switchover from analogue FM radio to DAB+ digital radio. This change in technology is always a difficult and almost traumatic decision to make, it is a lot at stake and it is easy to criticize. One of the major criticism is that “there is no need for terrestrial radio”, “the mobile broadband networks will handle the small traffic generated from radio listening” I have heard many people claim this “for a fact” - that audio takes so little capacity that it will barely be noticed if it is instead distributed in the mobile networks. Meaning this solution will be both cheap and good. Well, this might be true for a relatively small group of users. Myself, I am listening to IP-radio via smartphone today and in most times it works excellent, in addition to FM broadcasts. But what happens if everyone is referred to their smart phone to listen to the radio? I do not think the people claiming this scenario to be possible have done their math. They have not calculated the capacity, cost and complexity for such a scenario - but we now have. We, Teracom, decided to commission a study: Radio via Mobile Broadband - how hard can it be? We contracted the Swedish consultant firm A-FOCUS to do the calculations and analyze the scenario. These are their findings…… Oh, and I should say that this report is available free of charge. Just contact me after the presentation and I will make sure you get a copy. (NEXT)
- First some basic facts about Sweden and radio listening. It is very popular to listen to the radio. On a typical day as many as 5.9 million swedes listens on the radio, and they do it for an average of 125 minutes per day. So how does this relate to the need for capacity in the mobile networks? If you convert the 125 min/day, and 5,9 million listeners, into listening minutes per year, you get ….(NEXT)
- 270 billion minutes 10 times more than the 24 400 000 000 minutes of outgoing voice calls in mobile networks 2012. So it's a lot. But, as the technically skilled knows, it's actually not “voice” traffic you should compare. Radio in mobile networks will be transferred to the listener as data. It's true. If we convert 270 billion minutes of listening into digital data that can be distributed via, for example, a mobile network, it becomes… (NEXT)
- 190 000 Terabytes. It is an almost abstract large number and for most people this means nothing - other than that it's something big. It is therefor relevant to compare this huge number with the “normal data downloading” in the mobile networks. (NEXT) 190 000 Terabyte is more than ALL mobile data in Sweden throughout 2012, in all mobile operators networks. We are taking about huge volumes of data to be transferred. It is not a small creek as it has sometimes been referred to. It is an ocean of data. The technically skilled may think we have calculated with a very high bitrate for the audio? We have calculated at 96 kbps, which is good quality but not great, it is the lowest rate in Spotify which I think says it all. So, what is the price which such volumes of data? (NEXT)
- During 2012, the MNOs got 7 billion SEK (800 million EUR) exclusive of VAT - to transfer 176,400 Terabytes, thus slightly less than what would be needed in our case. That is market price of 40 SEK/GB. For 190 000 Terabyte that would mean 7,5 billion SEK (860 million EUR). It is clear that the broadcasters would get some discounts on pre-booked capacity of such a volume. A-focus have estimated the discount to 30 percent. A-focus have experience in price negotiations with mobile operators for both retail and wholesale and that's about where the discount is today. With discount is 5,3 billion SEK (600 million EUR). But even after the discount is the hideous amount of money - if you compare it with the option ( NEXT ) . The corresponding capacity in the FM/DAB case is 100 to 200 million SEK per year (Source: Public Service Commission Report SOU:2012) I think that by now, most of you have already realized that mobile networks can not be a substitute for FM or DAB, but you should get a little more to think about. The technically skilled be thinking that there is new technology that can do it more efficiently in mobile networks , we should look at it too.
- New technology such as UMTS/HSPA and LTE is a prerequisite if the mobile phone networks are to achieve the data speeds required for radio. eMBMS (evolved Multimedia Broadcast Multicast Service) is the technology that must be consistently used if the mobile phone networks are to cope with the peak loads when many simultaneous listeners want to access the networks. With eMBMS, capacity in LTE networks can be allocated constantly or during a limited time period. This guarantees that radio services can be delivered also when the networks are experiencing high traffic. However, this occurs at the expense of the capacity for other services. The use of eMBMS in a mobile phone network also affects the distance allowed between the base stations. In order for it to work, the distance between LTE radio base station sites must be a maximum of approximately 5 kilometres. That means that the number of base stations in todays mobile networks must be heavily increased in order for eMBMS to work. Over 20,000 mobile phone masts would be needed to achieve the equivalent base station distance, according to A-Focus. That is a lot of new masts, compared with today’s approx 7’000 masts…. But, to distribute 25 different radio stations over 4 mobile networks along with 20,000 base stations: A radio station with a 5 percent share of listening then has about 15 listeners per base station…. A that’s during a whole day, not necessarily at the same time. It becomes pretty clear that the eMBMS does not cut cost, or has any real effect, as often as one would like. Instead, it will impose cost on the MNO’s. If they were to use it is not clear they will get their money back…. Today, no operator in the world has used eMBMS, other than in very limited tests. Operators in Sweden have no plans testing it or launching it.
- Can we look forward to a radical fall in prices for mobile data in the coming years to improve the situation? Well, the price trend will benefit consumers but operators already grumbles about the low prices and have announced price increases and need for consolidations. In Sweden the trend today is clear. The operators are not cutting prices, they are cutting the amount of data you can download in a month. This means that the users must make a choice: do I want to “spend” my data to download my emails, to facebook or watch a youtube clip? OR do I want to spend it listening to the radio? In any way, if the price should fall, although no evidence exist for that scenario today, it needs to fall by…. (NEXT)
- This is how much prices for mobile data must drop, to come down to levels Broadcasters can afford. The average price of is 40 SEK / GB and month and it must be down to somewhere around 1 SEK / GB and month. This price fall is not in sight. Capital availability, 99.8% coverage and eMBMS software licenses is then not even included and must be started within a few years.
- Mobile networks have good coverage, at least according to the coverage maps. The MNOs are currently building LTE networks and claim they already cover 99 percent of all households in Sweden. It is only outdoor coverage and using phones with really good RF sensitivity, but still. Most users would argue against this. Good coverage is not the experience of the average mobile phone user today. The Swedish Ofcom (PTS) have made sample measurements of mobile phone coverage and it turned out that in 10-40% of the cases, different for different operators, the MNO:s had no coverage in areas they claim to have coverage. But, I will not stand here and “mock” the mobile operators excessive coverage maps. The fact is that LTE coverage is expanded and with time maybe 99% of the households will actually experience coverage in reality. If the mobile networks shall substitute terrestrial radio, they need to expand from 99 to 99.8 % coverage. Not by commercial interests but since it is a requirement imposed by the Government, that Public Service Radio must cover 99,8%. A-FOCUS have figured out what it costs in terms of investment in new sites (NEXT).
- This is the investment needed in the mobile networks, to increase coverage from 99 to 99.8. And we have calculated this under very moderate assumptions, ie. the mobile operators cooperate and share infrastructure to reach the last 0,8%.
- People and different authorities in Sweden expect to listen to the radio in times of crisis, storms, floods etc. Public service radio is obliged by the government to maintain high reliability for the production and distribution of radio. As a consequence, the terrestrial broadcast network is built to have high availability, 99.99%. To put it simple, It should always work. Mobile network operators do not build their networks to such requirements and availability. They have disclaims in the event of riots, sabotage , extreme weather, storm, lightning, fire , explosion, flood , natural disaster, and war. Even for accidents, labor disputes and strikes. So they do not meet the requirements of radio always working….
- It is not difficult to fix this someone thinks, it 's just a little battery backup and redundancy and it is all good. And that’s true, everything can be fixed. But it costs a lot of money. How much you ask? Lets ask A-FOCUS (NEXT)
- 450 millions EURO is the investment needed in the mobile networks, to achieve the same redundancy and availability that we have today in the terrestrial networks. And this is only for ONE operator, assuming that this operator will handle ALL subscribers in a crisis scenario. If all four operators should have the same demands, the cost of course will be much higher. The cost it is far above what the Broadcaster can pay. And it is not something the MNOs will do for free. This means there is a need for other financial solutions, maybe a substantial increase in radio and television license or higher taxes?
- We are talking of large costs as you have seen. Many million Euros of mobile data needed, extra millions for improved redundancy, extra millions for network expansion to 99.8%. It is of course money in a dignity that is completely lacking in the radio industry today. BUT - Is there a willingness among consumers for it? We asked 400 listeners if they would pay 50 SEK (6 EUR). 50 SEK is as you have already understood not nearly enough, but it's just for this survey to see how many express an interest. (In reality, 860 million EUR/year and 5,9 million listners, would mean approx 12 EURO / month). How many do you think would consider paying. How many of you would answer Yes please to that question? We'll see how many people answered Yes to that. (NEXT)
- 3 percent said yes. Our survey also shows that people want more channels - but they don’t want to pay for it. Furthermore, it is so that Public Service radio should be free to air - it should be for everyone. It is the Broadcasters that must pick up the tab. They have to pay the broadcast - just like today. It is technically possible to make this broadcasting work also in mobile networks in a future. But the money to pay for this, does not exist.
- WHAT IF --- we sort everything out. IF the cost of the broadcast would not be a problem. IF the MNOs could finance expansion to 99.8%. IF the MNOs could invest in redundancy and assure contingency in the networks. IF they could get eMBMS to work, and roaming and… THEN - We still have a problem reaching the 1.2 million individuals (14% of adult swedes) who are not online today. That never surfed the net, because they cannot or don’t want to. In order to be able to listen to the radio, we believe it must be really simple, no subscriptions, no apps, no configuring of your router, etc. 25% of Swedes 61 to 75 years have not accessed the Internet today. 55% of Swedes with a mobile phone have never used it to go on-line. If public service radio is meant to reach everyone, which is the requirement of the parliament, then “Houston, we have a problem”.
- Conclusions
- Conclusions Agreements for broadcasting must be signed with all 4 different mobile operators. The cost by far exceed the potential revenue or funds the broadcasters may receive. Far from all listeners can be reached - 1.2 million individuals in Sweden live as digital dividends