Spectrum License Selection of 2.5-GHz Wireless Broadband Access in Japan

Transcription

1 Spectrum License Selection of 2.5-GHz Wireless Broadband Access in Japan Yoshihisa Matsumoto Ph.D. Candidate, Ph.D. Program in Informatics School of Multidisciplinary Sciences The Graduate University for Advanced Studies Dr. Hitoshi Okada Associate Professor, Information and Society Research Division, National Institute of Informatics Masashi Ueda Assistant Professor, Information and Society Research Division, National Institute of Informatics Abstract Spectrum licenses are being assigned for wireless broadband access in Japan in The Ministry of Internal Affairs and Communications (MIC) has responsibility for approving the next generation of high-speed wireless communication systems that will use the 2.5 GHz band. MIC will assign frequencies such as the 30 MHz bandwidths of 2,545-2,575 MHz and 2,595-2,625 MHz for mobility and the 10 MHz bandwidth from 2,575 MHz to 2,595 MHz for rural fixed band communications. It determined that each band would be assigned to new operators, not to 3G Operators and their associate companies. 3G operators however were able to invest in the candidate companies to an amount equal or less than 1/3 rd of the candidate company s value. Mid-sized mobile operators such as a Willcom or eaccess basically agreed to the guidelines on deployment of base stations. However, NTT and KDDI were critical of the guidelines. This selection process is the first beauty contest for telecommunications licenses in Japan and the number of candidates was equal to or less than in the past assignments. The four candidates that applied for licenses were: Willcom (PHS based) Open Wireless Network (WiMAX based, backed by Soft Bank, e-access, and ISPs) Wireless Broadband Planning Corporation (WiMAX Based, backed by KDDI/JR East/Kyocera and Banks) Acca Wireless (WiMAX based, backed by Acca and NTT Group) The licensees had to show they could meet a large number of requirements. The following conditions are important criteria for the mobility band licensees. 1. The service area should be nationwide. 2. The licensee must start service within three years after being granted a license.

2 3. The coverage rate should initially be at least 10%. 4. The coverage rate should be more than 50% within five years. 5. 3G operators (DoCoMo, KDDI, Soft Bank, and emobile) cannot apply for licenses. 6. The 3G operator's capital must be equal to or less than 1/3rd of the candidate's capital. 7. The licensee should promote MVNO. The evaluation criteria included the middle- to long-term fund-raising capacity of the company as well as the initial deployment cost. So far, Wireless Broadband Planning Corporation and Willcom have been granted licenses, and the Ministry is still accepting applications for regional services. Wireless Broadband Planning will use WiMAX based on the macro cell method and Willcom will use Next Generation PHS based on the micro cell method. In this paper, we analyze the spectrum allocation environment and competition of these new entries in the Japanese 2.5-GHz wireless broadband access market. We evaluate each process and parameters such as coverage rate. The definition of population coverage rate is one of the discussion points in the evaluation. In 2004, the Japanese Government decided to use a beauty contest instead of an auction to select licensees. However, the beauty contest method and its parameters are not perfect. Hence, We compare this method with the licensing methods for future spectrum assignments of mobile broadband access in other countries.

3 1. INTRODUCTION (i) Spectrum Management in Japan Telecommunication council report titled Radio Policy Vision was tabled in July The Open Frequency Policy was announced as a way to meet the growing demand for radio spectrum. It contained the following points. 1. Review of radio spectrum allocation 2. Development of frequency reallocation facilitation scheme 3. Reform of spectrum user fees 4. Promotion of R&D 5. Facilitating deployment of radio equipment 6. Improvements to international standardization strategy 7. Building a safer and securer environment for radio spectrum use Figure.1 Frequency Allocation and Licenses for 3G and BWA Source: Current Status of Mobile Communications in Japan / MIC 2008 With the growing demands for advanced wireless broadband services that allow data transmission at speeds faster than 3G mobile phone services, MIC made efforts to develop systems for the introduction of broadband mobile wireless access systems using 2.5 GHz band.

4 (ii) Status of wireless broadband in Japan Figure.2 Allocating Frequencies to BWA Source: Current Status of Mobile Communications in Japan / MIC Mobile communication The Ministry decided that 30-MHz bandwidths would be allocated to a maximum of two companies who agreed to operate on a nationwide basis. To deploy new radio services and invigorate the market by promoting competition among technologies and new entries into the market, MIC intended to allocate the bandwidth to companies other than 3G mobile communication carriers and their group companies. These companies were, however, allowed to invest in the candidate company an amount less than one-third of the total value of the candidate company. Licensees were obliged to develop a plan to promote the use of relevant radio facilities by mobile virtual network operators (MVNO). 2 Fixed communications The Ministry decided that a 10 MHz bandwidth is to be allocated to each region. MIC intends to promote deployment of wireless broadband by local governments, CATV carriers, etc. to serve areas without broadband platforms such as optical fiber and ADSL. 3 Current status MIC approved the Establishment Plans of Wireless Broadband Planning K.K. and Willcom, Inc. MIC is still receiving applications for fixed communications in each region.

5 2. 2.5GHz SPECTRUM ASSIGNMENT (i) Criteria 1. The area should be nationwide. 2. The licensee must start service within three years after being granted a license. 3. The coverage rate should initially be at least 10%. 4. The coverage rate should be more than 50% within five years. 5. 3G operators (DoCoMo, KDDI, Soft Bank, and emobile) cannot apply for licenses. 6. The 3G operator's capital must be equal to or less than 1/3rd of the candidate's capital. 7. The licensee must promote MVNO. (ii) Characteristics of Candidates 1 Willcom Inc. 1. Next-Generation PHS 2. A PHS Operator 3. No outside funding 2 Open Wireless Network 1. WiMAX 2. Of its investors, SoftBank is a 3G operator, and eaccess owns emobile (another 3G Operator). 3 Wireless Broadband Planning 1. WiMAX 2. Of its investors, KDDI is a 3G operator. 4 Acca Wireless 1. WiMAX 2. Of its investors, Acca is an ADSL operator, and DoCoMo is a 3G Operator.

6 3. NEXT GENERATION PHS Next Generation PHS is Japanese Technology. Next Generation PHS approved by ITU-R as a one of specification of BWA in Figure.3 Comparison of Cell type Source: New service expansion by Next Generation PHS/ Willcom 2008 Figure.4 Comparison of Cell size Source: New service expansion by Next Generation PHS/ Willcom 2008

7 Figure.5 Specification Comparison 3G,WiMAX and Next Generation PHS

8 4. COMPARATIVE ASSESSMENT (i) Comparative Judging Several discussions were held by the Ministry on the design of a judging methodology suitable for Japan. In 2002, Research Committee on the Use and Benefit of Electromagnetic Waves reported that comparative judging, i.e. comparing the merits, including the financial stability, of the applicants, is better than the spectrum auction method for the Japanese market. (ii) Evaluation Items and Results 1 Appropriateness of Deployment Plan and Assuredness of Implementation 1. Service coverage and fast deployment (b) (c) (d) Planned in-service date Population coverage rate Number of service areas Deployment of base stations for in-door services 2. Smooth base station deployment according to a schedule (b) (c) Deployment of base stations Procurement of base station equipment Base station construction work 3. Capability of telecommunication equipment installation and operation (b) (c) Transit circuit Technological know-how: network implementation and operation Engineering resources and operational structure 4. Financial base for starting service without fail and continuing operations (b) (c) Equipment investment Financing Business profitability 5. Maintenance, administration, and support structure when failure occurs (b) (c) Assignment licensed engineers Network management organization structure Operation structure for recovery from system failures 6. Observation of laws such as the Radio Law, the Telecommunication Business Law and other related laws and assurance of users' benefit (b) (c) Compliance Personal information protection Complaint processing system 2 Avoiding Interference with Existing Services 1. Implement novel technology of avoid interference with existing radio service or perform radio wave monitoring Install technology to avoid interference with adjacent systems

9 2. Measures to avoid interference with existing radio services or perform radio wave monitoring Process to avoid interference with adjacent systems 3. Implementation and development plan for smaller cells and spatial multiplexing technologies to improve frequency efficiency (b) (c) (d) Frequency allocation Technical development Plan for future business expansion Compliant with operation restrictions 3 Contribution to Healthy Development of Telecommunications Business and Smooth Operations 1. Specific MVNO business plan (b) Open and fair access for MVNs Proven MVNO service 2. Contribute to sound development of telecommunications business and smooth operations by providing wireless broadband service (b) (c) Overview of service Form of business organization Contribution to standardization Radio Regulatory Council on approval of the establishment plans of Wireless Broadband Planning K.K. and Willcom, Inc. In response, the Council submitted its report that states it is appropriate to approve the Establishment Plans of the two companies, together with the requests to be made to the approved providers. The Radio Regulatory Council required to MIC to approved operators to promote establishment plans, especially 1-1, 1-2, 1-4, 2-3, 3-1 and 3-2.

10 5. REMAINING PROBLEMS: POPURATION COVERAGE RATE In this chapter we argue on remaining problems of this evaluation. The most serious issue would be estimation model of population coverage rate so we propose new methodology for this problem. (i) Current Population Coverage Rate Model The population coverage rate is calculated as follows. Divide the population able to receive mobile communication service from the location of the municipal office by the total population of the municipality. This method is used to evaluate mobile phone services for business purposes. The municipal office is usually located in the center of town in a rural area.weassume that a base station at the municipal office can cover the town. However, the current trend of cell phone usage is shifting from business use to private use. Population coverage rate will increase even if an operator sets up just one base station at a municipal office as a way of reducing costs in a profit-losing area. (ii) Proposed Population Coverage Rate Model Other numerical values such as area coverage rate and area mesh statistics were proposed by the MIC study group in Future calculations of accurate population coverage rates may use area simulation software which shown in fig.7 to Fig.9 and mapping of the Downlink RSS result which shown in fig.10 on a Digital mesh map of the MIC Statistics Bureau. Upper Value: number of households Lower Value: Total population in each mesh area Figure.6 Digital Mesh Map example Source: / MIC Statistics Bureau 2008

11 Figure.7 to Figure.10 shows examples of mobile optimization tools. Software: Aircom International, The Enterprise Suite Input Antenna data such as vertical and horizontal gain every degree. Figure.7 Antenna Gain Chart / Vertical and Horizontal Gain every 1 degree. Figure.8 Terrain Map Figure.9 Map with terrain profile

12 Input antenna position and height then we can get RSS data. Figure.10 RSS (Receive Signal Strength) Indicator on terrain map Software: Aircom International, The Enterprise Suite

13 6. CONCLUSIONS This comparative judgement was the first telecommunications Beauty Contest in Japan. WBB and Willcom were highly evaluated. Although Willcom will use the micro cell method, it is supposed to have the same number of base stations in 2012 as WBB, which is to use a macro cell method. In its application, Willcom gave the minimum number of base stations. In fact, Willcom will have to set up more than 10 times this number of base stations to cover enough area. This kind of confusion happened because the calculation of population coverage rate was unsuited for the actual situation. Although losers posted several negative comments, it was not bad at all because no one brought suit against the government. However, the evaluation of the population coverage rate does not fit the current situation. For fixed wireless broadband applications that have already started operations, we can say another methodology such as the one proposed in this paper would be better in a viewpoint of expansion of coverage area. MIC has emphasized speed of deployment within individual areas because IP Mobile is not yet ready for licenses of 2.1GHz mobile communications.

14 7. REFFERENCES Ministry of Internal Affairs and Communications, (2007), 'Approval of Establishment Plans based on the Guideline for Establishment of Specified Base Stations Using 2.5 GHz Band', Ministry of Internal Affairs and Communications. PHS MOU Group, (2007), 'Network Image of Next Generation PHS', PHS MOU Group. Syed Ahson and Mohammad Ilyas eds., (2007), "WiMAX Applications", CRC Press, Ga Willcom Inc. (2008), 'New Service Deployment by Next Generation PHS, Willcom Inc.. Takeshi Hattori, Masanori Fujioka eds., (2006), Wireless Broadband", Impress. Yoshiyuki Takeda (2005), A Radio Wave and Frequency Textbook, Impress. The IEEE Working Group on Broadband Wireless Access Standards, (2008), ' Working Group on Broadband Wireless Access Standards', Radio Regulatory Council Minutes:

15 APPENDIX A1. EVALUATION RESULTS Comparative Judging Criteria Willcom Openwireless WBB Acca 1-1 Plan for rapid and wide deployment of base stations for providing service B+ B A B- 1-2 Smooth base station deployment capability B+ B A B 1-3 Capability of installing and operating telecommunication equipment 1-4 Financial base for starting service without fail and continuing operations 1-5 Maintenance, administration and support structure when failure occurs B B B B A B B+ B B B B B 1-6 Observation of laws B B B B 2-1 Implementation of novel technology to avoid interference with existing radio service or radio wave B B B B monitoring 2-2 Measures to avoid interference with existing radio service or radio wave monitoring B B B B 2-3 Implementation and development plan for smaller cells and spatial multiplexing technologies to improve frequency A B A B efficiency 3-1 Specific MVNO business plan B+ A B B 3-2 Contribution to sound development of telecommunications business and smooth operations by B- B B+ A providing wireless broadband service A = 2 A= has advantage in comparison with the other B+ = 1 B+= Slightly dominant B = 0 B=Equal with others B B-=Slightly inferior C + -2 C=Inferior in comparison with the others Total Table 1. Result of Assessment concerning the approval of the establishment plans for specified base stations Source: Approval of Establishment Plans based on the Guideline for Establishment of Specified Base Stations Using 2.5 GHz Band / MIC 2007

16 A2. ABRIDGED DETAILS OF EVALUATION Willcom Openwireless WBB Acca B+ B A B- Planned in-service date Apr Mar Feb Mar Reach 50% coverage in each region Population coverage rate In 2009 (%) In 2010 (%) In 2011 (%) In 2012 (%) Service area (number of municipality areas) in , Number of base stations In ,498 5,685 4,000 3,350 In ,361 10,184 9,000 5,492 In ,359 12,652 14,000 7,409 In ,972 14,961 19,000 8,946 7,000 indoor base Combine WiMAX 19,000 Indoor base Combine WiMAX Indoor service stations by end of with Wi-Fi and stations by end of with Wi-Fi and 2012 beam forming 2012 beam forming Table 2. Assessment result of 1-1. Plan for rapid and wide deployment of base stations for providing service

17 Willcom Openwireless WBB Acca B+ B A B Shared use with Deployment of base stations current PHS facilities. Deploy dual-type base station after Use autonomous decentralized radio Use current 3G base stations at 15,000 locations. Cell design completed for 6,000 3G base station locations. Use NTT's PHS or 3G base station facilities at 8,700 selected locations. channel control. Developing with Procurement of base station equipment vendor. Commercial production will be Dual-type (PHS and NxG PHS) base station will be Under development with vendors. Already co-developed a small macro base station with several vendors. Purchase from partner vendors. Procure general-purpose equipment for commercial use. Will select vendor after getting license. deployed after Base station construction work Use current construction partners. Will select construction partners after getting license. 10 construction partners in 2008 and 50 construction partners after Will select partners from list of experienced construction vendors. Table 3. Assessment result of 1-2. Smooth base station deployment capability

18 Willcom Openwireless WBB Acca A B B+ B Make equipment Co-develop Equipment investment from 2008 to 2012 investment more efficient by using 1981 inexpensive compact base 1496 current service station with several facilities. partner vendors. Financing Transfer from current PHS business. Capital: 700 Debt loan: 1300 Capital: 170 Debt loan: 1280 Capital: 800 Debt loan: 1300 Business profitability (When expected to turn a profit on an annual basis) Table 4. Assessment result of 1-4 financial base for starting service without fail and continuing operations

19 Willcom Open Wireless WBB Acca A B A B Use segmentation Participate in Frequency allocation Use distributed autonomous system. system to divide 10 MHz into three sectors to avoid inter developing FFR and use FFR technology for frequency 10-MHz channel with 3-frequency reuse. cell interference. allocation. Already co-developed Technical development Develop small base station for in-door use and specific plan of implementation. Will consider beam forming, null steering and FFR. Base station under development compact macro base station with several vendors. Have practical FFR through co-development and performed Will consider beam forming and FFR demonstration experiment. Standardized Plan to implement 10-MHz system Plan for future expansion 20-MHz system in lieu of Plan to implement 20-MHz system. using FFR. Already prepared frequency Will not implement 20-MHz system. standardization trend. allocation for future 20-MHz system. Cell design not Use 10-MHz system required because of with segmentation. Compliant with operation restrictions use of distributed autonomous system and no need to comply with operation restrictions Implementation of FFR will be considered. Discuss revision of use restrictions if Already prepared frequency allocation plan for 10-MHz system with FFR. Use 10-MHz system with segmentation. Implementation of FFR will be considered. because of use of traffic usage micro cells. explodes. Table 5. Assessment result of 2-3. Implementation and development plan for smaller cells and spatial multiplexing technologies to improve frequency efficiency

20 Willcom Openwireless WBB Acca B+ A B B Open-standard Open and fair access to the network for MVNOs terminal using W-SIM. Use open-standard interface such as Resell model only. Will not directly sell to consumers. Will provide standard MVNO menu. Will provide standard MVNO menu. IMS, SIP, and SDP. Already provides Proven MVNO service MVNO model in current PHS. 7 MVNOs. 20% of data card No actual experience with MVNO. No actual experience with MVNO. No actual experience with MVNO. users are via MVNO. Table 6. Assessment result of 3-1. Specific MVNO business plan

21 Willcom Openwireless WBB Acca B- B B+ A Overview of service Monthly charge 3,000-4, M users and expected profit of 1.488B in Monthly wholesale price 2,350. 3M users and expected profit of 0.797B in Monthly charge 3,200. 5M users and expected profit of 1.243B in Monthly charge 3, M users and expected profit of 1.048B in Form of business organization Existing Operator. 3G. Operator's controlling share: 10% Establish new company for BWA business. 3G Operator's controlling share: 32% Establish new company for BWA business. 3G Operator's controlling share: 32% Establish new company for BWA business. 3G Operator's controlling share: 0% 23% after 2009 Already provides Contribution to standardization MVNO model in current PHS. 7 MVNOs. 20% of data card No actual experience with MVNO. No actual experience with MVNO. No actual experience with MVNO. users are via MVNO. Table 7. Assessment result of 3-2 Contribution to sound development of telecommunications business and smooth operations by providing wireless broadband service