Commission Spectrum Proposals May Curb Growth Of 3G

17 July 2006

17th July 2006 - London: European Commission proposals to change the way in which radio spectrum is allocated could affect the future progress and availability of advanced mobile phone services, such as video downloads, high-speed Internet access and mobile TV, according to the GSM Association (GSMA), the global trade association for mobile operators.

The European Commission is proposing to establish the principle that specific spectrum bands shouldn't be tied to any one technology. The GSMA is concerned that this will lead to fragmentation, where the same spectrum is used for many different technologies and different services across Europe. Such an outcome would make it difficult for manufacturers to sell the same equipment worldwide and realize the economies of scale that have dramatically reduced the cost of GSM handsets and network infrastructure. The GSMA is particularly concerned about the fate of the 3G extension bands (2.5 - 2.690 GHz), which it believes must be reserved for the IMT2000 family of technologies*.

"The harmonisation of spectrum, in markets where economies of scale are important, has been a universal benefit - to governments, users and operators alike," said Tom Phillips, Chief Government and Regulatory Affairs Officer of the GSMA. "Standardisation has created a healthy, open global mobile market with huge economies of scale and fierce competition amongst vendors and operators."

The GSMA fears that the long-term socio-economic benefits of third-generation (3G) mobile services are at risk without the kind of regulatory harmonisation which supported GSM in its infancy and which is needed now to protect 3G extension bands. The fast pace of change means that advanced technologies such as mobile TV and HSDPA are already being deployed, but the GSMA believes they will require the extension bands in order to realise their full potential.

"By reserving 3G extension bands for IMT2000 technologies, governments will protect and leverage their country's existing investment in 3G, rather than artificially constraining its potential," added Mr. Phillips. "A lot rides on these decisions, which will set the path for the evolution of mobile technologies over the next ten to 20 years."

The GSMA also fears that developing nations will be the hardest hit by the fragmentation of spectrum usage, as people in these countries are the most price-sensitive, especially for handsets. "If a lack of spectrum harmonization means the price of a low-end 3G phone increases by$30, the effect will be severe," said Mr. Phillips. GSMA studies have shown the strong link between mobile phone penetration and economic growth in developing markets.

Notes for Editors
*The ITU, which is part of the UN, has specified a number of frequency bands for use globally for third generation mobile services. The 3G standards identified by the ITU are referred to as the IMT 2000 family of technologies. Any new technology can enter this family if it meets certain criteria, such as minimum data rates and mobility.

*The GSMA has just published a white paper: "Optimising spectrum for future mobile service needs".

About the GSM Association
The GSM Association (GSMA) is the global trade association representing more than 690 GSM mobile phone operators across 213 countries of the world. In addition, more than 150 manufacturers and suppliers support the Association's initiatives as key partners The primary goals of the GSMA are to ensure mobile phones and wireless services work globally and are easily accessible, enhancing their value to individual customers and national economies, while creating new business opportunities for operators and their suppliers. The Association's members serve more than 2 billion customers - 78% of the world's mobile phone users.

For further information contact:

Mark Smith
GSM Association

Email: press@gsm.org

David Pringle
GSM Association
Tel: +44 795 755 6069
Email:press@gsm.org

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