Research Notes

Many councils are handsomely rewarding DSL providers – at the expense of the mobile operators

Around the world, many mobile operators are fighting local authorities to receive permission to erect mobile telephony antennas – antennas that are the foundation of the future mobile broadband market. In reality, the mobile industry often experiences slow and complex administrative processes when applying for permission to erect new mobile antennas.

The reasons for the long and slow case handling can vary a great deal and can range from local protests from inhabitants that fear mobile radiation, to local community desires that mobile antennas should be invisible or camouflaged, and over to traditional bureaucracy, that simply means that things take time.

Very often people forget to discuss the competitive consequences of the time spent in acquiring building permission for mobile antennas and people forget to discuss who will achieve a financial and marketing advantage from what councils are doing around the world.

Here at Strand Consult we have examined this subject in the report Successfull strategies for the mobile broadband market and our conclusion is that the slow speed of case handling for mobile antenna permissions is resulting in the incumbents that are offering DSL based on their national copper network being very handsomely rewarded. We have also reached the conclusion that the long case handling time is slowing down technological development.

The council’s slower case handling is in fact resulting in the slower expansion of mobile broadband, which is thereby limiting the competition that ought to be coming from the mobile broadband operators, targeted at the operators that own the copper networks currently delivering most of the broadband that many Europeans are using – copper networks the National incumbents usually own and operate.
Today, mobile broadband has become the fastest selling product in the mobile world. Currently over 15% of all Danish broadband connections are mobile and we expect that by the end of the year, around 600,000 Danes, out of a total of 5.5 million, will have a mobile broadband connection. In countries like Finland and Sweden, over 20% of all broadband connections are mobile and in Austria, that figure is 35%.
In the report we have a number of surveys from Finland, Norway and a number of other countries that show, that if customers had to choose between a mobile and fixed line broadband connection with the same specifications, most customers would choose the mobile broadband connection.
Similarly we know that the number of ADSL customers in countries like Norway and Finland are decreasing and that a great number of these customers are migrating from ADSL to mobile broadband. In Finland the number of ADSL customers fell last year by 19,000 and in Norway that figure was 14,000. We will see the same development in a number of other countries over the coming years. In a country like Denmark where the electricity industry is aggressively rolling out fibre to the home, each time one Dane purchased fibre in 2008, five Danes chose mobile broadband.
It is no secret that the mobile industry has gone to great lengths to inform the political system about their need for faster case handling for building permissions, but a great deal points towards that we have not seen the consequences of this:
1. Mobile broadband networks are not expanding as much, or reaching the quality, that they ought to be able to.
2. Customers are not getting access to the product they are demanding.
3. The companies can not sell all the products that customers are demanding.
4. Technological development is being limited.
5. Some customers are clinging to ADSL solutions, instead of converting to mobile solutions.
6. There ought to be a higher level of competition in the broadband area.
7. The lifespan of the ADSL network is being extended, thereby rewarding the old incumbents and their shareholders.
8. Broadband pricing is not under the pressure it otherwise would have been.
9. Competition on the broadband market is being distorted.

Basically it is obvious that the slow case handling for building permissions for mobile antennas is resulting in competition on the broadband market being limited, which is both a disadvantage for consumers and society. If I may be a little blunt; around the world there is an iron-clad council guarantee resulting in many citizens being forced to use an expensive and inflexible broadband solution.

It is sad that we have a number of companies that have received money from their shareholders to invest in mobile broadband networks and that are finding it difficult to receive permission to erect the antennas that can create a serious competitor to the copper networks, that are annually giving the old fixed line companies a multi-billion euro revenue.

When we look into the future, this problem will grow over the coming years as operators partly need to roll out UMTS on 2100 MHz, LTE on 2600, 900 and 800 MHz, and restructure their GSM networks to function on 900 and 1800 MHz. In addition to this there are a number of WIMAX operators using 2000 and 3600 MHz, and CDMA operators using 450 and 850 MHz. In practice this means that all mobile networks need to be redesigned over the coming years and that operators will be using a combination of various technologies and frequencies to create the mobile broadband networks that will have a central role in our future societies.

At the end of the day a great number of antennas need to be erected and many others need to be relocated to ensure that population will receive a good and stable mobile broadband coverage. Again let me emphasise that city and county councils around the world are facing the choice of whether to continue to reward fixed line companies offering DSL, or whether they want to create jobs and ensure their citizens and companies access to the most modern technologies that can give society increased flexibility and the possibility to be online when and where people desire.
In the report, Strand Consult describes the current mobile broadband market and how it will develop in the future. We have analysed this market and described how a mobile broadband provider can achieve success in the future.

More information: Successful Strategies for the Mobile Broadband Market

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