Europe’s a 4G laggard because of a lack of regulatory certainty

5 Jun 2013

Despite Europe being the original leader in terms of GSM and 3G technologies, the region is considerably behind the US and Asia when it comes to 4G. An expert warns that operators need greater certainty when it comes to planning for future spectrum.

In a report last week the GSM Association said that the European mobile wireless market is underperforming relative to other advanced economies, particularly the US which was once upon a time a laggard in the mobile space.

However, by the end of this year 19pc of mobile connections in the US will be on LTE (Long Term Evolution) networks.

In Europe only 2pc of mobile connections will be on LTE.

Ireland only concluded its 4G auction process in November with operators paying €850m for their licenses. Various operators are expected to launch their LTE services in September.

The UK 4G spectrum auction concluded in February, netting the UK Government stg£1bn less than it had hoped for. While Everything Everywhere (EE) has been active in the UK since late last year with 4G services it will be later this year before rival operators are active in the UK market with competing 4G services.

Slow regulatory and political system

Considering the amounts raised and their timing, I put it to John Strand, analyst with Strand Consulting that perhaps the various European governments had been hoping for a repeat of the lucrative 3G auctions of over 10 years ago when various EU countries reaped up to €160bn in revenues from license auctions.

Strand said the timing and availability issue for 4G in Europe was mainly due to a slow regulatory and political system in Europe.

“The reason the US is ahead on LTE is related to the fact that CDMA is a dead technology and Verizon and Sprint have to convert their network to the technology of the future – LTE.

“When Verizon and Sprint make this conversation, AT&T and T-Mobile will have to follow – it is an arms race.”

Strand said that in Europe the operators have been upgrading their networks slowly, replacing base stations with new base station and while some countries have great LTE based on 1800MHz signals, the rollout of services based on 800MHz frequencies is slowing down development in Europe.

The 800MHz frequencies were the spectrum ranges previously occupied by terrestrial TV and 2G.

Many operators struggled to secure investment from their parent companies as they awaited regulatory clarity on 800MHz spectrum.

As operators look beyond the current 4G networks to higher frequencies for more dense mobile networks such as in the 2.6MHz range, they will need greater clarity and swifter deliberation by regulators.

“Operators can’t do network planning before they know what type of spectrum they will have in the future.

“This is not a repeat of the first 3G market – it is the political/regulatory slowdown in Europe,” Strand said.

4G image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years