3G rollout - final rapport 2005 - PTS-ER-2006:4

23/02/2006

From time to time the licence holders have requested that PTS should amend the licence conditions as regards the rate of rollout and coverage requirements. PTS has nevertheless not consented to any amendment to the original time schedule. However, a joint application resulted in PTS, in December 2004, allowing a reduction of the requirement concerning the pilot signal outside urban areas. Hi3G and SULAB appealed against the decision to the County Administrative Court. During the course of the proceedings, PTS has allowed a further reduction of the so-called ‘buffer zones’, but otherwise opposes the companies’ appeal.

The operators have reported details of population coverage to PTS on an ongoing basis. With the assistance of this information PTS has been able to conclude that the UMTS licence holders do not satisfy the requirements for population coverage, which has resulted in notice being given to the operators, in March and December 2004, that they do not satisfy the requirements contained in the licence conditions. In December 2005, PTS once again requested details of population coverage. As of 30 November 2005, the operators covered 92% (Hi3G), 89 % (SULAB) and 92 % (Vodafone) respectively of 8 860 000 people.

During 2005, Hi3G and Vodafone presented a request to be allowed to implement the remaining 3G rollout with the alternative technology CDMA2000, in collaboration with Nordisk Mobiltelefon AS. In October 2005, PTS rejected the request for a change to an alternative technology as the authority – set against the background of an analysis of the effects that a combined network would have regarding service operability, access to terminals, environmental and competition aspects – could not ensure in an acceptable way that end-users would not be negatively affected by a change of conditions.

PTS is currently conducting a review of the radio conditions to conduct UMTS operations, as these cease to apply on 31 March 2006 and new conditions will then be issued. In the review of the conditions, the change of the pilot signal proposed by PTS will be considered.

In a judgment from October 2005, the Environmental Court of Appeal concluded that mobile masts and antennae for 3G constitute an environmentally hazardous operation according to the Environment Code. It is sufficient that an activity can cause mental anxiety among nearby residents for it to be designated as environmentally hazardous according to the Environment Code. As a consequence of this judgment the municipal environment boards, as a step in the municipality’s Environment Code compliance work, can request various kinds of details about the operators’ 3G infrastructure in the municipality.

An international survey, conducted by the consultancy company AB Stelacon on the assignment of PTS, shows that development of 3G offers and the growth of subscriptions has not accompanied the rate of rollout of the infrastructure. Japan and Korea are the countries where 3G development has advanced furthest, both as regards population coverage and the use of mobile content services. Sweden, whose 3G penetration lies at a level among the countries in the lead within Europe, has one of the best developed 3G networks in the world. On the other hand, the use of the more advanced 3G services has not had the breakthrough in Sweden that the operators expected. However, all the stakeholders within the sector are convinced that music, television and video are the services that will tempt subscribers to change from 2G to 3G. The fact that Sweden enjoys such a good position as regards the rollout of 3G infrastructure is considered by most evaluators to depend upon first the competition generated by the operator Hi3G, second the stringent demands contained in the licence conditions regarding population coverage.

It is PTS’s opinion that the operators should be given an opportunity to complete the rollout of the 3G networks with the greatest possible cost efficiency without this entailing a deterioration for the consumer. The reduction by PTS of the pilot signal aimed to facilitate savings for the operators’ remaining infrastructure costs of up to 25 per cent. Moreover, the rules concerning cooperation between the operators mean that these have already from the beginning been able to have up to 100 per cent sharing of masts. However, it has been difficult to get the operators to cooperate concerning mast sharing. PTS has on repeated occasions proposed to the Government that the Act be amended so that it is possible to compel the operators to share masts. The Committee of Inquiry on Co-location, appointed by the Government, has in an interim report recommended that the legislator introduce mandatory measures if voluntary cooperation does not work.

The convergence of telephony, data communications and digital broadcasts of radio and television facilitate a transfer of various kinds of services across different kinds of network and terminals having increasing numbers of functions. It is the opinion of PTS that this development will affect competition, security and service development within mobile communications. More beneficial combination subscriptions with fixed network, broadband, mobile telephony and digital television services enhance opportunities for operators with access to several different kinds of networks to take market shares from operators who have difficulties in offering packeted services to the same extent. As regards the development of these aspects, PTS is analysing the market’s stakeholders on an ongoing basis. Also, set against the background of the wave of consolidation in progress in Europe, PTS considers that there are great advantages to be gained for those 3G operators in the Swedish market who can offer their customers access to several different networks.