LONDON Next year's spectrum auctions in the U.K. for mobile broadband and mobile TV are likely to spur the development of new business models for operating wireless networks, such as the "NetCo" model.
U.K. regulator Office of Communications (Ofcom) will next year auction mobile broadband spectrum in the 2500MHz to 2690MHz frequency band as well as in the 2010MHz to 2025MHz band. With its technology neutral spectrum policy, Ofcom plans to make some of this spectrum technically suitable for WiMax as well as for 3G cellular.
In addition, Ofcom will also auction spectrum in the 1452MHz to 1492MHz L band, which is understood to be of interest for mobile TV services.
With the possibility of new mobile TV and WiMax networks being built as early as next year, at least one U.K. company is considering NetCo business models for operating the new networks. Arqiva, which owns a network of cell sites and towers in the U.K., primarily serves the broadcast media industry and offers tower and mast space to cellular operators.
Arqiva wants to expand its business beyond renting tower space to include designing, building, owning, operating, and managing wireless networks regardless of the technology, according to Tim Cook, business development manager for wireless solutions at Arqiva.
"We want to provide not just a rate card of something to hang off a mast," says Cook. "We want to be the wholesale network operator for a mobile TV consortium or operator... a wholesale 'WiMaxCo' model is something we would also consider."
In pursuit of this kind of wholesale model for mobile TV as well as WiMax networks, Arqiva could even emerge as one of the bidders in the spectrum auctions. But Cook would not confirm or reveal Arqiva's plans for either spectrum auction.
"We want to contribute new business models to make it easier for operators to go to market," says Cook.
Unstrung Insider chief analyst Gabriel Brown finds in his reports Evolved HSPA & the Roadmap to LTE and RAN Sharing: Cutting the Cost of Mobile Broadband, that the time may be right for a NetCo model.
"To deliver true broadband mobile services in limited spectrum, it may be better to have fewer independent operators and implement some kind of wholesale or NetCo model," says Brown.
Some operators have already taken steps to share infrastructure in order to cut costs, such as Vodafone UK and Orange UK , which have agreed to share 3G radio access networks in the U.K.
"In some markets, it's clear that the prevailing model of every operator owning and operating its own radio access network, with each providing near-identical coverage, doesn't provide a cost structure that matches the revenue opportunity from mobile services if operator margins are to be maintained," says Brown.
But Arqiva's NetCo plans for WiMax could throw the company into the path of BT Group plc for one, which is understood to be interested in the WiMax spectrum for both wholesale and retail services.