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A Regulatory Framework for UMTS

UMTS Forum Report 1, 1997

Recommendations

In order to reach the described market opportunity, the following recommendations are intended to advise policy makers on the optimal way forward to ensuring the success of UMTS in Europe. The success of UMTS will depend on many factors, of which the most important will be spectrum availability, cost, coverage and quality. Competition between various standards will be fierce and UMTS will have to prove itself in this competitive environment.

UMTS networks will support a host of new service providers and independent content creators, in a similar way to the Internet. Today's airtime resellers will be joined by a new breed of "value adding" service providers who will come from market environments as diverse as telecommunications, entertainment, utilities, publishing, retailing, banking. As a result, competition for subscribers, and their revenue, will be intense at these levels.

To achieve this will require the establishment of a "virtuous circle". Spectrum, standards and regulation are the key enabling factors. Getting the framework for these right will enable sustainable, high competition and lead to a wide range of attractive services. In turn, this may require more spectrum.

The essence of UMTS is to enable a new end-user proposition which provides ubiquity and universality of services, and which cost effectively accommodates the shift over the coming decade from real-time voice to data and multimedia services, requiring higher bandwidth. Third generation systems, regulation and spectrum licensing economics must accommodate and enable a new cost profile to meet the emerging user demand.

9.1 Spectrum

Spectrum for UMTS needs to be


  • adequate, which means in the order of 2x20 MHz per licensee. With minimum two licensees in any given geographical area this means a total minimum of 2x40 MHz by the year 2002,
  • available early to allow both technical and market trials,
  • available for full use in time. At least the Core band as identified in the ERC Decision on UMTS needs to be fully available across Europe, even if extension bands may be specific to individual countries,
  • available at a price that is fair and does not discriminate against UMTS services.

Recommendation 1

The UMTS Forum has calculated the total demand for terrestrial spectrum in 2010 to be 580 MHz. For terrestrial services in Europe, 240 MHz are defined for second generation standards. The Forum has earlier concluded that the full 155 MHz for terrestrial UMTS designated by the ITU should be made available. To meet the UMTS market forecast an additional 185 MHz is required. The calculated spectrum demand for the satellite component of UMTS is 50 MHz by 2005 and 90 MHz by 2010. The UMTS Forum calls upon the relevant authorities to take timely action to make sufficient spectrum available for UMTS to satisfy market demand.

Recommendation 2

For the start-up in the year 2002, each terrestrial operator will need in the order of 2x20 MHz to enable the provision of multimedia services. It is therefore recommended that at least 2x40 MHz then will be made available to provide competitive services.

Recommendation 3

There is a need to designate an additional 20 MHz as start-up band for non-public non-licensed in-building low mobility systems. This spectrum will be required from the year 2002 to help build the market for multimedia terminals and to stimulate a demand for public UMTS access.
Recommendation 4

The UMTS Core band, as identified in the ERC Decision, Extension band 1 and Refarming bands shall be used mainly for full mobility applications. Extension band 2 may be used also for low mobility applications, and for fixed applications outside regions with high traffic density.

Recommendation 5

In order to ensure excellent levels of spectrum efficiency, and indeed to facilitate the task of finding more UMTS spectrum, the regulatory and standards environments for UMTS should encourage new and innovative combinations of different transmission modes.

Recommendation 6

The UMTS Forum considers that the licensing of UMTS spectrum cannot for the present be based on the concept of imposed spectrum sharing. However, licences should allow operators to agree on spectrum sharing on economical grounds and on their capability to guarantee quality of service to subscribers.

Recommendation 7

The feasibility of sharing spectrum between satellite down-link bands and indoor unlicensed applications should be studied, provided that the satellite services are not constrained in the satellite bands. Such studies should not delay the initial release of spectrum for UMTS.

9.2 Standards

UMTS standards need to be


  • established by ETSI according to a timetable that allows commercial deployment at the latest by 2002,
  • established, if possible, in a co-operation with other standardisation organisations in order to avoid unnecessary technical differences,
  • compatible with other major standards of the IMT-2000 family in order to enable roaming and interworking.
  • established in harmonised frequency bands, starting with the UMTS Core band.
  • defined to allow the possibility of use in existing mobile bands.

Recommendation 8

The UMTS frequency spectrum, as identified by ERC, shall be reserved for systems using UMTS as defined in standards adopted by ETSI.

9.3 Regulatory environment

The regulatory environment, including the licensing regime, should be stable and encourage competition. Some elements are therefore needed, already from the start:


  • an obligation to interconnect UMTS networks with other telecommunication networks;
  • an obligation to ensure interoperability of applications on a agreed minimum level;
  • freedom to share sites, infrastructure and facilities, to combine services and operate throughout the value chain;
  • harmonised licensing conditions in different countries;
  • consistency with regulation in other related markets such as entertainment and broadcasting, so that services in these environments can converge;

Recommendation 9

The basis for licensing UMTS services should be the Licensing Directive. No additional licensing regime at European level is considered necessary for licensing of UMTS.

Recommendation 10

Wherever possible the National Regulatory Authorities should make the UMTS licensing regime known during 1998 and operators should be identified before the end of 1998.

Recommendation 11

Increased competition will come from the commercial development of the market roles in various organisations. Any proposed licensing regime should not preclude the integration of different roles within a specific organisation, provided that this does not prevent any competitive opportunities.

Recommendation 12

Coverage conditions for terrestrial UMTS components, if imposed, should consider the constraints of technology. In areas where terrestrial coverage is not economically or technically viable, UMTS services may be provided over satellite components.

Recommendation 13

If spectrum pricing is introduced for UMTS frequencies, it is important that this pricing does not hinder the uptake of UMTS services.

Recommendation 14

The UMTS Forum considers that no further regulation for UMTS interconnection is required.

Recommendation 15

The UMTS Forum considers that the regulatory control of the UMTS interfaces and interconnection requirements should be minimised. Self-regulation, within the framework of the Interconnection Directive, (such as was observed for the GSM MoU) is deemed preferable, provided that workable competition is achieved.

Recommendation 16

In general, the UMTS licensing processes should ensure that there is competition in infrastructure provision. For economic reasons there may be a need to consider infrastructure sharing or roaming between networks. The regulatory framework should not present barriers to such arrangements if they do not have negative impact on competition between operators.

Recommendation 17

Existing second generation networks can provide the terrestrial foundation infrastructure from which UMTS networks can evolve. Therefore, the existing mobile operators should not be excluded from the UMTS licensing process.

Recommendation 18

There should be no regulatory barriers to the integration of different technologies (terrestrial and satellite systems) and services (telecommunication services and broadcasting services) from the telecommunication, satellite and broadcasting fields, subject to spectrum and network constraints.

Recommendation 19

It is highly desirable that UMTS terminal equipment type approval is recognised on a global scale as a basis for placing on the market, free circulation and use.

Recommendation 20

It is assumed that a new type approval regime will apply to UMTS terminal equipment. The likely extent of the essential requirements for UMTS terminal equipment will have to be discussed by all parties concerned as soon as possible.

Recommendation 21

The future regulatory regime should take into account the multi-band/multi-mode terminal development for interworking between second and third generation systems.

Recommendation 22

The Commission, the Council and the Parliament of the European Union should ensure that there is ample time for the Forum to put forward further comments during the elaboration of the CTE Directive.



9.4 Other government initiatives

Whilst this report shows there is a substantial and growing market for UMTS services, a further spur to its growth could also be provided by government initiatives making use of mobile multimedia. Such initiatives could include, for instance, making government databases available 'on-air' as well as 'on-line', and encouraging Intelligent Transport Services and Electronic Commerce to embrace the capability offered by UMTS.

Within the field of access to other markets, there are a number of actions the European Union can undertake to remove barriers to the use of UMTS beyond Europe.

Recommendation 23

The European Union could usefully assess to what extent UMTS might be covered by the commitments made within the Group on Basic Telecommunications and take steps in the World Trade Organisation to encourage other countries to permit market access for UMTS services.

Recommendation 24

The European Union could usefully take steps to ensure that UMTS products are explicitly covered by the Information Technology Agreement and to encourage more countries to sign the Agreement.

Recommendation 25

The European Union should take steps to increase its participation in the World Customs Organisation with a view to adopting the Istanbul Convention and/or the Professional Equipment Convention and to encourage other countries to do likewise and to ensure that UMTS products are covered by one or the other or both agreements.

Recommendation 26

The European Union should take a proactive role in ensuring that barriers for free circulation of mobile terminals are removed, preferably well in advance of the deployment of the first UMTS systems, and that the scope of its actions concern the terrestrial component as well as the satellite component of UMTS.

Recommendation 27

The European Union should present to countries around the world a set of measures, agreed with operators, manufacturers and service providers, aiming at encouraging adoption of a policy and regulatory framework conducive to the availability of UMTS services and equipment.