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Thriving in Harmony: UMTS Forum releases major new study

- Study for the UMTS Forum by Booz Allen Hamilton investigates economic impact of harmonised and liberalised spectrum usage on EU Member States
- Maintaining a harmonised approach to mobile phone frequencies will result in an increase of EUR244 billion in consumer purchasing power by 2020

- Continued harmonisation will also lead to 37% higher growth in end-user penetration plus innovative mobile services over next 15 years
- Consumers will benefit from better service quality and lower costs

According to a new study conducted on behalf of the UMTS Forum by global strategy and technology consulting firm Booz Allen Hamilton, harmonising European Union frequency spectrum policy will bring clear economic benefits to the Member States.

Analysis shows that continued harmonisation across the EU until 2020 will bring an increase in purchasing power of EUR 244 billion for European consumers. This will result from lower prices and better use of available 3G/UMTS data and speech services, for example via roaming. In addition, growth in end-user market penetration will be 37% higher within 15 years in a harmonised environment than it would be in a liberalised market.

Available as a free download from the UMTS Forum web site, the study may be seen in the context of discussions taking place within the European Commission where new stipulations on frequency spectrum policy in the European Union are being hotly debated. Two camps have emerged: Those who believe in market-driven liberalisation and those who would prefer a regulated approach to frequency harmonisation for systems such as mobile communication networks. While the liberalisers want to leave frequency spectrum policy more in the hands of market forces, the harmonisers are calling for a regulatory framework to prevent spectrum fragmentation.

"This study confirms emphatically that consumers and Europe's overall industry ecosystem are best served through continuation of the current harmonised approach to spectrum usage", comments UMTS Forum Chairman Jean-Pierre Bienaime. "In a harmonised environment - as has already been demonstrated by the overwhelming success of GSM - end users benefit from an increased pace of innovation and a greater choice of feature-rich terminals and services. The net result is a larger market size, with scale effects that impact positively on subscribers and operators alike."

Better performance and lower costs
The study finds clearly in favour of continuing the current policy of spectrum harmonisation for new mobile communications standards. "Internationally harmonised spectrum and standards reduce technological complexity and investment costs. At the same time, they bring tangible benefits to the consumer in terms of usability and the cost of data and speech services," comments Dr. Uwe Lambrette, expert in mobile communication and Principal at Booz Allen Hamilton.

Consistent harmonisation would mean better performance at a lower cost to the consumer. This would support the transparency of offers and price models. Lambrette again: "The seamless use of mobile devices and data services abroad would become simpler for consumers, plus it would be easier for them to monitor costs." A liberalised environment, according to the study, would result in higher costs and poorer performance levels. Taking such an approach would also slow down the spread of innovative mobile services and applications.

Investment security leads to greater innovation
According to the new study, a harmonised technological environment with clearly defined standards and interfaces is necessary in order for full competition to emerge. It would also increase the speed of innovation over the long term. "This would fulfil one of the key goals of European technology policy. Such an approach would increase investment security at the same time as lowering costs for everyone in the market," says Gregor Harter, expert in mobile communication and Partner at Booz Allen Hamilton. A harmonisation strategy may require a greater initial investment than liberalisation, but unified standards would allow for a stronger network effect (lower prices for setting up and running a network) and subsequently faster market penetration.

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