Transcript Stage 4
Spectrum Award for FWA at 3.4 GHz
PFWACC Meeting 7 th May 2002
The Team
Radiocommunications Agency
WS Atkins Management Consultants
Schema
Professor Ian Jewitt
Denton Wilde Sapte
Presentation structure
What is on offer?
Where are we in the award process?
Licence Packaging
Award process
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Payment mechanism
–
BIOLI
Auction details
What happens next?
What is the process about?
Award of radio spectrum licences at 3.4 GHz for Fixed Wireless Access or Radio in the Local Loop… … suitable for providing a range of broadband services; typically up to 2Mbps to the end user
Available Spectrum - new arrangement
Uplink Downlink 100 MHz Duplex 20 MHz FWA 3480 3500
CEPT Rec. 14-03 Compliant
6 MHz extra
Compatible with other EU 3580 20 MHz FWA 3600
Analysis carried out so far….
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Market research
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Market modelling
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Technology review
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Network and cost modelling
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Economic value analysis
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Business case valuation
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Award process design
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Spectrum re-alignment
…the calendar ahead
Consultation process
One-to-one presentations
Regional road-shows May / June Notice/ Regulations Information Memorandum Applications July July Sept Award Process Oct
Objectives of licence packaging design and award process
To ensure efficient and effective use of the available spectrum
To promote competition and innovation
To avoid spectrum sterilisation
To allow operators with viable business cases to bid
Principles in determination of licence regions (1)
Iterative process
Segmentation of market at post-code level
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Subscriber density Propensity to purchase
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analysis of SMEs and consumers
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Types of services
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Pricing – driven by market prices
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Levels of competition from other service providers ….yields potential market share for the FWA operator
Principles in determination of licence regions (2)
Engineering considerations:
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Spectrum and Capacity
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RF Performance and Range
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Interference and Co-ordination
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Products and Technologies Trade-off: bandwidth requirements, QoS required, customer numbers and amount of spectrum (service contention ratio)
Modelling of network deployment
Financing assumptions ….to analysis of the business case
NPV Sensitivity analysis
Licence packaging
UK split into 8 areas: ‘hot spots’ + contiguous ‘provincial’ areas
15 licence areas:
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7 “Metro” Licences
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cover main metropolitan areas 7 “Provincial” Licences
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cover less densely populated areas, include smaller towns
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1 “combined” for Northern Ireland
Map
– – – –
Scotland
• •
Central Scotland Metro Scotland Province
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North
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Tyne-Tees Metro
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North of England Province
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North West & Yorks
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Northern Metro
• –
North West, Yorks and North Wales Province Midlands
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Midlands Metro
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Midlands and Mid Wales Province
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South West
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Severnside Metro
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South West and South Wales Province South
• •
South Coast Metro Southern Province South East
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Greater London Metro
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South East Province Northern Ireland
Subscriber Data Highlights (Metro)
Licence Households Greater London South Coast Severnside Midlands North West & Yorks Tyne-Tees Central Scotland 4,800,000 950,000 500,000 2,160,000 3,900,000 1,000,000 1,100,000 Business Sites (by employees) 1-49 50+ 351,500 65,600 38,300 136,800 16,700 2,500 1,750 6,900 Land Area (km 2 ) 70% Coverage 1,750 650 350 1,300 228,000 51,100 64,000 10,500 2,500 3,300 2,900 800 950
Sources
: PAF, Yellow Pages
Subscriber Data Highlights (Provinces)
Licence Households Land Area (km 2 ) Scotland Northern England NW, Yorks & N Wales Midlands & Mid Wales South West & S Wales Southern South East Northern Ireland 1,130,000 400,000 1,370,000 1,460,000 2,150,000 580,000 2,670,000 660,000 Business Sites (by employees) 1-49 60,300 17,500 50+ 2,000 200 63,300 87,100 30,200 24,000 89,400 43,900 1,750 2,350 950 600 2,800 2,250 70% Coverage 10,900 3,600 5,750 5,100 7,250 2,350 9,300 6,544
Sources
: PAF, Yellow Pages
The Award Process (1)
Auction 1 Simultaneous multi-round ascending
• 15 available licences • 1 licence per area auction
Auction 2 – unsold licences
‘on the table’ for 1 year
1st price sealed-bid
auction • Same reserve price as with SMRA • 30 days from initial bid
The Award Process (2)
15-year term Licences for provision of FWA services
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to end users
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wholesale provision to ISPs and Telcos
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backhaul of own FWA traffic incl. that resulting from wholesale Technology neutral approach No restrictions on number of licences Full transparency on cross-ownership Staged payments BIOLI clause
Payment mechanism
Staged payments with no requirement for bankers’ guarantees
3 equal instalments over 15 years:
– – –
upon grant of licence 5 th 10 th anniversary of award anniversary of award
Option to return the licence at the end of the 5-year period, no further payments or penalties (12 months’ notice) … ‘renewable’ licence over 3 five-year periods
Why staged payments?
Lower up-front costs for operators
Option to return the licence:
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greater flexibility to operators “unwanted” spectrum can be reallocated
Encourage participation
BIOLI (1)
Build-It-Or-Lose-It requirement
Minimum number of base stations to be deployed by the end of year 5
Equivalent mesh technology access points
Connectivity to core network
BIOLI (2)
Metro
Greater London Midlands Northern Cent. Scotland South Coast Severnside Tyne-Tees 15 10 15 5 5 5 5 Provincial South East Midlands and Mid Wales N.West, Yorks. and North Wales Scotland Southern South West and South Wales North of England Northern Ireland 5 3 3 5 5 3 5 5
SMRA auction details (1)
Eligibility depends on activity level previous round (first round = 15)
Activity level
= Nr of licences on which current high bidder last round + Nr of licences on which bidder made valid new bid Waivers – instead of valid bid
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Allows bidder time to regroup 3 waivers allowed
SMRA auction details (2)
Withdrawals (of a single bid)
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allows bidders to pursue and change ‘aggregation’ strategies
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4 withdrawals Can withdraw current high bid Penalty equal to difference of withdrawn bid and eventual selling price (or reserve if unsold)
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No penalty if subsequently sold at higher price New current price set by the RA (normally at previous high bid – but RA reserves the right to adjust subsequently)
SMRA auction details (3)
Info given to bidders at each round:
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Current high bid on each licence
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Identity of each current high bidder
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Range of admissible bids on each licence
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Eligibility level (bidding credits) of all bidders
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Required activity level parameter
SMRA auction details (4)
Info given to bidders (cont’d):
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Details of any withdrawals
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Details of any waivers
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Details of any retirements from auction
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Nr of withdrawals each bidder has left
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Nr of waivers each bidder has left
SMRA bidding round
Start of auction round waive Proceed to next round •No loss of eligibility •With loss of 1 waiver Licences on which current high bidder not waive Licences on which NOT current high bidder hold Withdraw bid bid not bid
SMRA round (cont’d)
hold withdraw bid not bid Counts for act. level RA compares with other new bids to determine new high bid Does not count for act. level RA takes other new bid or reverts to previous high bid Pay winning bid Pay withdrawal penalty if no further higher bid No penalty if subsequent higher bid Counts for act. level RA compares with other new bids to determine new high bid Does not count for act. level RA takes other new bid or reverts to previous high bid Begin next round
Unsold Licences?
– – – – –
Left on table until an application is made (1 year) Application triggers : Sale at reserve if no other interested party Simple auction for each licence (not simultaneous) if 2 or more bidders Initiator committed to bid at least reserve price Sealed bid auction (30 days) Straightforward: highest bid wins Winner pays bid
What next?
Closing date for comments 30 May 2002
Summary to be made available by 10 June
Individual presentations by the Consultants to interested operators
Regional roadshows