Ecc report 173 Fixed Service in Europe

European FS market and its regulation

General market trends

This new market environment has enabled real competition in telecommunications, which has had an impact not just on the provision of telecommunication services, but also on the supporting infrastructure, whether wireless or cable.

Aside from mobile communications, which are by now well and long established users of radio technologies, many other “traditional” telecom operators started to look more attentively to wireless communications to facilitate speedy implementation, flexibility and economical provision of their networks. This trend, started during the 1990’s, has continued to happen and may be observed both in the provisioning of fixed wireless access for customer connections and in other areas like, for example, in supporting infrastructure for public mobile networks or for other telecommunication networks. This new demand for using radio technologies comes in addition to a considerable fixed radio network infrastructures already for long time in use by incumbent operators, as part of their PSTN network, national broadcast distribution (feeder links to regional VHF/UHF transmitters) networks, etc.

The most significant increases of FS assignments over the last two decades still came in particular from the area of infrastructure support for public mobile networks, where the reported number of Point to Point (P-P) links increased by more than 24.5% per year in average between 1997 and 2010. This demand is expected to increase further with the expected growth in capacity and number of connected nodes (base stations) with the introduction of UMTS/HSPA/HSPA+/LTE/IMT-Advanced. Provisioning of infrastructure support through various Point-to-MultiPoint (P-MP) technologies (e.g. universally licensed FWA networks and tailored P-MP backbone networks) is also being considered, or already implemented in some countries as a viable alternative option in the environment with high density of served base stations (e.g. dense urban areas).

The growth in number of FS links is likely to continue for the foreseeable future. In that respect it may be noted, that CEPT has already made several successful moves towards ensuring favourable conditions for such growth, by developing ERC and ECC Decisions, Recommendations with relevant channel arrangements and identifying additional bands for high density applications in the FS, including FWA and infrastructure support. The objective of new recommendations and the approach to management of the radio spectrum is to promote innovation and competition in the provision of wireless services. Radio spectrum is a key resource for communication services and its efficient utilisation is critical in the future.

Role of Fixed Service

Figure : Example of fixed links deployment within the infrastructure of mobile network

Figure : Example of a private radio relay link (e.g. for LAN, PABX inter-connection of premises)

Fixed radio links, instead of cable and fibre, are often the preferred solution where constraints such as cost, local topography (e.g., mountainous terrain or paths across water) and the need for access to remote rural regions are fundamental considerations. In many such cases fixed radio links are the only practical solution.

Also in today’s competitive environment the ability to further roll out a network rapidly by using radio as transmission media provides an operator with the flexibility to install and scale transmission paths as and when required. This is particularly important as it allows the possibility to reduce and better distribute the required investments, by testing the service and directing revenues as they appear into further development of a network where most use occurs.

It is appropriate to note that being the integral and indispensable part of overall telecommunication infrastructure, fixed service provides a significant contribution to national economies in financial terms.

Furthermore public mobile service is currently one of the most significant users of spectrum in Europe and all forecasts estimate that it will also be the source of the highest demand for spectrum over the next 10 years. This is primarily due to the expected growth in data traffic over the coming years. Figure presents an Alcatel-Lucent forecast of global mobile yearly traffic up to the year 2015 where several Exabytes are foreseen (1 Exabyte = 1 million Terabytes).




Figure : Global mobile yearly data traffic forecast for year 2015 (source Alcatel-Lucent)

Similar projections are also coming from other companies: Cisco (Cisco VNI 2011) estimates that data traffic in Europe will grow at a Compound Annual Growth Rate (CAGR) of 91% in 2010-15 as indicated in Figure .

Figure : Mobile data traffic forecast for Western Europe (source Cisco)

As a further example, in France 80% of fixed service link capacity is used by mobile operators. In the near future it is expected an important growth of data traffic due to broadband backhaul links supporting terrestrial cellular networks. For instance the increased smartphone usage with several new applications running is likely to increase network congestion. The growth trend for some of such devices over the last two years is presented in Figure .

Figure : Total global number of smartphones sold (source: Plum Consulting, Apple quarterly financial results, Gartner)