Spectrum Sharing: New Operator Business Models a Requirement

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Leading Competitive Intelligence Firm, Current Analysis, Looks at Databases and Small Cells as the Future of Spectrum Licensing

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Current Analysis, the market leader in real-time, tactical competitive intelligence for the telecommunications and information technology markets, released an advisory report that concludes spectrum sharing will be an inevitable part of the U.S. government’s spectrum policy going forward, requiring mobile operators, infrastructure suppliers and device makers to invest in the technologies and develop new business models to make spectrum sharing a reality. Analysts Lynnette Luna and Peter Jarich lend their perspective and recommended actions in this complimentary report.

The lack of spectrum for mobile broadband services and the continued forecast for a spectrum shortage crisis has been a major operator grievance. Against this backdrop, the President’s Council of Advisors on Science and Technology (PCAST) took on the topic of spectrum sharing, suggesting that federal and commercial users look for ways to share federally owned spectrum. PCAST recommends that at least 1,000 MHz of spectrum should identified for sharing and that a hierarchy of sharing is enacted: federal users have highest priority, followed by exclusive commercial systems (such as LTE systems) and lastly generalized open access.

“The FCC has already granted T-Mobile an experimental license to test sharing in the 1,755-1,780 MHz band currently in use by the federal government,” stated Jerry Caron, SVP Analysis at Current Analysis. “The federal government is moving quickly, and operators and suppliers need to be prepared to capitalize.”

Spectrum sharing isn’t just a U.S. consideration. UK telecom regulator Ofcom was the first to propose the idea of auctioning off spectrum for small cells on a shared-spectrum basis last year, and other countries are studying spectrum sharing as a way to ease demand for mobile broadband spectrum.

While spectrum sharing is seen as an unproven concept, some of the foundational technologies are already in place. Database management of spectrum—the ability to move wireless signals from one frequency to another to avoid bands used by other signals—is proving itself out in the white space market. Companies acting as white space database coordinators openly admit that they see broader applications of their work, applications which extend to sharing spectrum in other bands.

“Database technology paves the way to ways to manage spectrum on a more granular level, based on combinations of location, frequency, time, and device type,” commented Lynnette Luna, Senior Analyst, Mobile Ecosystem for Current Analysis. “Interference, QoS, and priority access—factors important for spectrum sharing between commercial and government users—can eventually be managed with a database.”

Small-cell technology is seen as another facilitator of spectrum sharing. The FCC has talked up plans to issue a rulemaking that involves deploying small cells in the 3.5 GHz band, which is already in use by federal users.

“Small cells are actually ideal solutions for spectrum sharing,” noted Peter Jarich, VP Consumer and Infrastructure with Current Analysis. “Because small cells are designed to deliver targeted coverage, their chances of interfering with other services in a shared-spectrum environment are limited.”

However, business models surrounding spectrum sharing are still unknown. For example, device vendors will have to understand how to support spectrum sharing and the various spectrum bands that might come with it, while operators will need to determine what services would best fit in a shared-spectrum environment.

Operators are accustomed to exclusively owning spectrum, and the industry is already seeing some key opposition to the idea. AT&T, for example, while not totally dismissing spectrum sharing, recently declared that regulators cannot ignore what it calls a proven model around exclusive licensing when it comes to investment, innovation, and jobs.

“T-Mobile USA’s test of spectrum sharing in the 1755 MHz band will serve as a critical step in understanding what extent spectrum sharing will be a viable option to help solve the nation’s spectrum shortages,” concluded Luna. “It will be important for infrastructure suppliers, device vendors and competing operators to participate to gain early insight into spectrum sharing.”

For more on database management, small cells, and operator business model issues for spectrum sharing, as well as Current Analysis’ key recommendations, download the full report at http://www.currentanalysis.com/f/2012/spectrumsharing.

About Current Analysis

Current Analysis (http://www.currentanalysis.com) has been helping leading telecommunications, information technology and business software companies improve their competitive intelligence, differentiate themselves in the market, and win more business. Current Analysis is the only provider of real-time, in-depth tactical competitive intelligence, analysis, and advice. For more than 15 years, sales teams, product managers, marketing professionals, and executives have relied on Current Analysis as a trusted partner to improve their ability to anticipate and quickly take action on market opportunities and competitive threats. The company serves more than 35,000 professionals at over 1,600 global enterprises.


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