Ddo8 Peter Anker Digital Dividend In Nl

Competition in broadcasting services orcompetition between broadcasting and mobile

A case study of the Netherlands

Peter Anker

Digital dividend in the Netherlands - Page 2

This provides us with a remarkable competition conclusion:

as wireless broadband speeds start to match wired broadband we will have a second infrastructure capable of competing with the traditional telco incumbent … This would mean more competition, permit lighter regulation and would spur the fixed network operators to move to next generation access so as to differentiate themselves from the threat of the mobile competitors.

Vivianne Reading, Dublin, 1 October 2008

cable television

dtt

Peter Anker, Gent, 17 October 2008

digital terrestrial television

cable tvcatv


Contents

� Potential use of the digital dividend

� The situation on the relevant markets in the Netherlands

� The potential use of the digital dividend in the Netherlands

� What to do?


Potential use of the digital dividend


Television distribution in the Netherlands

Cable TerrestrialSatellite IPTV (ADSL)


Market share of Digital Terrestrial Television

Market share DTT

0,0%1,0%2,0%3,0%4,0%5,0%6,0%7,0%8,0%9,0%

2002 2003 2004 2005 2006 Q22007

Q42007

Q22008

Analogue switch off


Terrestrial TV in the Netherlands

� Digital Terrestrial TV

- Switch-off in december 2006

� 23 TV and 19 radio programmes

- Comparable to analogue cable TV package

� 5 multiplexes in use

- 1 multiplex public services (3 national and a regional channel)‏

- Free-to-air

- 3 multiplexes commercial service

- Subscription

- 1 multiplex mobile TV (DVB-H)‏


Mobile communications


Mobile communications (2)

� 3 mobile operators

� Nearly national mobile internet coverage

- Only small portion of 2 GHz spectrum is used

- Possibility for flexible use of GSM bands in the near future

- All three mobile players have GSM900 spectrum

� All 3 mobile operators offer mobile TV

- KPN on DVB-H

- Vodafone and T-Mobile on their mobile network


Internet connectivity

� 80% of the Dutch households has an Internet connection

� 92% of the internet connections is broadband

- 61% ADSL

- 38% cable TV network

� ADSL coverage of PSTN is nearly 99%

� Cable TV coverage of 95%

Source: TNO, Q2 2007


Wrap-up of the Dutch situation

� High penetration of cable TV (95%)‏

� DTT is in direct competition with cable TV

� Huge share of digital dividend already allocated to DTT

� Lower level of demand for wireless broadband services in rural areas- More urban nature of demographic make-up of the Netherlands

- ADSL coverage of PSTN is nearly 99%

- Cable TV used for broadband access

� Nearly full coverage of mobile internet


DTT – Outcome of the RCC

Layer 1

24-29-30-33-34-65

Layer 2

25-27-28-31-35-44-60

Layer 3 Layer 4

32-33-35-36-37-40-49-51-58

23-24-31-41-45-48-53-54-55-57

Layer 5 Layer 6Layer 7

21-43-46-47-51-56-56-64-66-67

21-22-26-30-32-39-42-50-52-54-60-66

61-62-68-69


Digital Dividend – What is available?

� 7 layers available

� 5 layers in use by the DTT operator

� 2 layers available

- 1 layer of good quality

- 1 layer with a reduced quality

- Available in 2012


Digital Dividend – Where to use it for?

� Broadcasting

- Enhancing competition between cable TV and DTT

- More possibilites for more programmes, mobile TV (DVB-H) or HDTV

� Mobile communications

- Enhancing the coverage in rural areas

� No need to use the digital dividend for internet connectivity in rural areas


Scenario 1 – Digital broadcasting

The additional frequencies freed from 2012 are allocated to DVB services, either using DVB-T (DTT standard) or DVB-H (mo bile TV).

� This scenario does not require any rearrangement of the band.

� DTT is a strong competitor to cable operators in the TV market.

� Strengthening the existing operator or introduction of a new competingoperator for mobile television.

� Mobile services are rolled out using other, higher frequency bands (e.g. GSM900, GSM1800, UMTS or 2.6GHz spectrum).

�Will the competition between cable TV and DTT remain viable if the cable TV is digitized?


Scenario 2 – Mobile communications

� DTT is still a competitor to cable operators in the TV market, but not as strong as in Scenario 1.

� Three assignments of 2×10MHz each possible, assuming a 12MHz guard band is required between the downlink and the uplink.

� This scenario requires the frequencies used at some DTT transmitter sites to be changed (retuned).

� Additionally, probability of interference to DTT at the band edge; additional DTT fill in transmitters might be needed.

The subband 790-862 MHz is allocated to mobile commu nications to provide larger cell radius in rural areas and better in-h ouse coverage

�Is there enough capacity available for a truly broadba nd serviceand a larger cell radius?


How about PMSE?

� Currently provisions to use the whole band on non-interference basis- 1 channel (63) free for wireless microphones

� Highly localized use

� Fragmented market with many small players and users

⇒Long time needed to effectuate a change

� Need for more sophisticated equipment- Larger tuning range

- Dynamic frequency selection

� Especially a problem in the 790-862 MHz if this is used for mobile communications- Can the duplex gap be used?

- Is there enough capacity in this gap?


How about technology neutrality?

� Scenario 1 uses the existing layers hence is optimized for broadcasting

� Scenario 2 frees the upper subband and makes it available for mobile communications

� Questions around both scenario’s

� Need for a possibility in which the market chooses the optimal scenario


Conclusion

� Large part of the digital dividend already used for competition in broadcasting services

� Remaining part can be used for

- Broadcasting

- Mobile communications

� Flexible award process with 2 simultaneous competing auctions which leads to either 2 broadcasting layers or 3 mobile licenses of 2x10MHz

Questions?

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