The discussion here on spectrum management has shown that shortage of spectrum is still very much a problem. Predictions that digital modu- lation and microcells would lead to a world where spectrum scarcity was a thing of the past have not come about [3]. Digital modulation has offered only slight improvements in capacity over analog modulation, and micro- cells remain expensive and are deployed only where absolutely necessary.
A shortage of spectrum leads the spectrum manager to consider carefully how it should be distributed and has important implications for the WLL operator.
Getting a License 217
For the operator, the implications of a spectrum shortage are as follows:
■ Spectrum is available only at higher frequencies, preventing the use of many of the available technologies and restricting the range and coverage to LOS propagation.
■ It is important to deploy the more technically efficient technolo- gies, such as CDMA, to maximize capacity and demonstrate to the spectrum manager that the spectrum is being used as efficiently as possible.
■ High-bandwidth applications, such as 384-Kbps bearers, will re- quire significant amounts of spectrum, requiring a more dense infrastructure. Thus, although a technology may offer a high data rate bearer, lack of spectrum may prevent operators from deploy- ing that service unless they are prepared to build a high density of cell sites.
For the spectrum manager, the implications of a shortage of spectrum are the following:
■ Users must be required to demonstrate the economic value of their application to retain spectrum. Statistics kept by the operator showing the value added to the economy by their business and their success in meeting coverage and competition objectives will be valuable.
■ In distributing the spectrum, market forces such as auctioning and pricing are likely to be used to ensure that the most economically efficient use of the spectrum is achieved.
Some spectrum managers may feel that it is their task to advise WLL operators on which technology they should adopt. To date, there has been little tendency to do that for WLL, but in some countries it is likely.
WLL operators in those countries will need to determine whether the mandated technology is appropriate; if it is not, the operators will have to petition the government to be allowed to use a different technology.
Another potential area for obligation is coverage. Regulators can see coverage obligations as a way of preventing cream-skimming and ensur- ing that the operator remains serious in its investment in the network. As argued in Chapter 5, that is a form of USO requiring cross-subsidy and should be avoided in a competitive environment. Nevertheless, it seems extremely common. In practice, few spectrum managers will rescind a license when a network provides 50% coverage rather than the required 60% coverage, so there will be some latitude in not meeting that obligation. (In any case, the lack of real power to enforce such an obligation makes it inappropriate for the spectrum manager to make it part of the license condition.)
References
[1] NERA, Smith,Review and Update of 1995 Economic Impact Study, Radiocommunications Agency, London, U.K., 1997.
[2] Study into the Use of Spectrum Pricing, U.K. Radiocommunications Agency, April 1996. (Also available on the Internet at http://www.open.gov.uk/radiocom.) [3] Calhoun, C.,Wireless Access and the Local Telephone Network, Norwood, MA:
Artech House, 1992.
Getting a License 219
15
Choosing a Service Offering
D have different capabilities, as was indi- cated in Part IV. It is important that the appropriate mix of capa- bilities, or services, is selected for the target market. If the total service package is insufficient, customers will migrate to competitors who offer a better service. If the service package is excessive, the system cost will be high and competitors can attract customers by offering a lower-cost service.
Choosing the right mix is a task for the marketing department. They should understand the services available, the services that the potential customers say they require, and the services that customers reasonably might be expected to require but do not yet realize they need, given global trends in telecommunications and local trends in growth and modern- ization. The marketing department needs to understand how much customers likely will pay for each of the services, the distribution of de- mand, and the strategy that the competition is likely to adopt. One of the key trends driving increased service is the need for Internet access.
221
Internet users, as explained in Chapter 2, often require an additional line coupled with relatively high-rate data capabilities. That will drive WLL systems to offer at least two lines in all but the least developed countries.
More details about how to determine which service offerings to adopt based on predictions of penetration and revenue are provided in the Chapter 16.