Broadband access is still prohibitively expensive in many emerging markets, and according to the Dynamic Spectrum Alliance, things are unlikely to improve if these regions follow the course charted by developed markets.
Capitalising on underutilised spectrum is crucial to extending coverage to the world’s remotest areas while making it affordable for those in the lowest bracket, according to the DSA’s Executive Director H Nwana. DT Editor James Barton spoke to Nwana about the role that dynamic spectrum allocation can play in bridging the digital divide, expanding the Internet of Things, and keeping connectivity costs low in emerging markets.
Tell me a little about your background in spectrum policy.
I used to run spectrum policy at Ofcom; I was responsible for the 4G auction and digital switchover in the UK, as well as 3G liberalisation.
What do you consider the role of the DSA?
The DSA was founded in late 2013 by members such as Google, Facebook and Microsoft; it is a global cross-industry alliance focused on increasing dynamic access to unused radio frequencies. While I was overseeing the UK’s 4G auctions I was also heavily pushing TV white space policy, and the reason for this is very simple: most spectrum is not in use for most of the time. To me, this is crazy – it might even be generous to say that 90% of airwaves are not being used in 90% of places, 90% of the time. Take Singapore for example – one of the world’s most technologically developed nations, but their regulator has stated that they are only using 6% of their spectrum. For this reason, dynamic spectrum access must be the future of spectrum policy.
Could you explain how dynamic spectrum access is defined?
Ultimately, it’s about sharing unused spectrum. In fact, you could define dynamic spectrum access as a spectrum-sharing approach that allows secondary users to access abundant spectrum ‘holes’, or white spaces, in licensed spectrum bands.
During my time at Ofcom, the first licensed band we chose to go after was broadcasting, which yielded the whole issue of TV white spaces. These frequencies have fantastic propagation characteristics – which is why they were chosen for TV in the first place – but despite this they are very inefficiently used. Certain frequency channels will be used in three particular major transmitters – which will be spaced very far apart - and the rest of the country won’t use them at all, so there are significant areas where these frequency channels aren’t in use at all. These are the ‘white spaces’ – and they can be employed by secondary users to offer other services such as broadband. Any good regulator should be looking at dynamic spectrum access anyway; not only is all spectrum underused, but some frequencies are incredibly useful and need to be shared.
So how does the Alliance aim to advocate this?
The first goal of the Dynamic Spectrum Alliance is to close the digital divide – hence, why we consider the full utilisation of spectrum to be of key importance. The second goal is enabling the Internet of Things; when spectrum policies were first established, my predecessors never could have imagined a world where billions of things are accessing the airwaves - they figured it would only ever be large companies accessing spectrum, not wireless microphones, smart meters or cars. That world was not envisioned, but now that it’s happening regulators have realised that there’s no way for billions of devices to access spectrum unless it is shared – we can’t give every single thing its own piece of spectrum to use! A traffic light can use spectrum one minute that’s being used by a smart meter or a car the next minute; they need to be able to share spectrum.
The final goal is alleviating the artificial spectrum crunch; the static way spectrum is allocated today means that huge swathes of it lie dormant or simply unused, and we want to provide ways for this spectrum to be used in productive ways. There’s practically limitless potential; the only criterion is making sure that the spectrum’s key function isn’t affected.
The DSA probably spends most of its time currently on the first and third of these goals, although the second is of course becoming increasingly important.
How will spectrum utilisation help to bridge the digital divide in emerging markets?
In terms of the digital divide facing emerging markets, the key issues are affordability and reach – because reach without affordability is futile. This is the case in some parts of urban Africa; there is broadband access but no one can afford it, and conversely if you can afford it but don’t have access to it, then what’s the point?
Africa essentially faces both a lack of reach and affordability. It is an enormous continent; it eclipses Europe, China and North America’s sizes combined, so deriving spectrum policy from somewhere far smaller such as the UK simply doesn’t make sense. It needs to use its UHF frequencies as much as possible to get the required reach, but these frequencies have been assigned for broadcasting. Therefore, until the frequencies are reassigned, the only way this spectrum will be available for communications is via sharing – and the only way to do this is via TV white space regulations that I am advocating for.
The issue of affordability is even more pernicious. If we talk about the global population as being 7 billion, then we can roughly divide it up as follows:
- The first billion have an average annual income of $49,000, and are willing to spend $205 on communications per month.
- The second billion drops very quickly to $12,000 average annual income. They’re prepared to spend $53 per month on communications.
- The third billion has $5450 average income, vs. $23 on monthly communications spend.
- The fourth is $3000 vs. $12.
- The fifth is $1750 vs. $7.
- The sixth is $1065 vs. $4.4.
- And the final billion, the one that lives on less than $1 a day, has an average annual income of anywhere between $350-$540, and is willing to spend $2.25 a month on communications.
If you scan those numbers, it is no surprise that there are 3.3 billion people connected to broadband – anything below $23/month is unaffordable. Carriers are not going to build expansive 3G/4G networks when the size of the purse for voice, TV and data is $12/month. If the fourth billion are already spending $3-$4 a day on communications, they don’t exactly have much left over for broadband. It goes without saying that geographically, the sixth and seventh billions are dominated by Africa and South Asia. In India only 20% of people are connected to broadband; in Africa it’s 19%. The quality of broadband is also fairly poor.
So, how do we resolve these issues of affordability and reach? I do not believe for a second that the current 3GPP ecosystem is going to connect the next four billion any time soon. 70% of Africans and 66% of Indians live in rural areas; they aren’t going to expand into these regions without a strong incentive – so, we need to throw competition at them. Twenty years ago in Nigeria, there were only 300,000 fixed lines. When the market was liberalised and mobile competition was introduced – there are now 140 million connections in the country. That came through competition from another ecosystem. Similarly, the mobile ecosystem is now reaching its limits of profitability – most operators in Africa are getting 50% of their revenue from less than 10% of their base stations. This means that most of their base stations are running at a loss – and this is as it stands currently, when most base stations are based in urban areas. So, there’s very little incentive for operators to move into rural areas. Competition needs to come from within the 3GPP ecosystem itself – they need to be promoting LTE in 450MHz in Africa for broad LTE coverage. But there also needs to be competition from outside, companies using TV white space regulations and deploying Wi-Fi type technologies to provide broadband in rural areas. For a significant number of people living in rural areas, this is likely to be their first experience of broadband – via Wi-Fi rather than LTE.
There needs to be an alternative, complementary ecosystem around Wi-Fi to balance out the 3GPP ecosystem. A lot of current 4G operators are already offloading a lot of the data to Wi-Fi; in Africa, it’s a valid blueprint to use low-cost 2G/3G to carry voice, then Wi-Fi to carry data.
What are the policy lessons that emerging markets can learn from developed markets?
I advocate making telecommunications the nerve centre of developing economies, particularly within Africa. I think it’s important that people like me, who come from an African origin, are able to articulate the issues in a telecoms/media/technology landscape and do something about it from an African perspective. I say this bluntly as a lot of regulation in Africa and other emerging markets is derived from Ofcom and other developed market regulators – and this is a mistake.
H Nwana is the Executive Director of the Dynamic Spectrum Alliance.
The DSA Global Summit takes place in Bogota, Colombia on 26th-28th April.