Co-Operative LTE

Introduction

Australia’s on the way to getting “seperate” LTE networks, by Telstra, Optus and others. Each taking about 20Mhz of spectrum each. Each of these networks will overlap, representing a poor allocation of resources.

Why not build a government or industry body organisation to build a single network which will reach further and be able to provide faster speeds than any of the smaller individuals.

Imagine if a single wholesale network had all 100Mhz of spectrum! You could achieve gigabit speeds and would be very cost effective for customers.

A better picture

Consider the status quo:
+ provider A use 10 towers to cover a town with 95% coverage, 20Mhz of spectrum and up to 300Mbps at a cost of $2bn, and;
+ provider B use 10 towers to cover the same town with 95% coverage a seperate 20Mhz slice and up to 300Mbps at a cost of $2bn, and;
+ provider C use 10 towers to cover the same town with 95% coverage, another 20Mhz of spectrum and up to 300Mbps at a cost of $2bn.

In total you will have 30 towers, 95% coverage, top speeds of 300Mbps and a total cost of $6bn. The customers are the losers here.

If instead a wholesaler uses 15 towers to cover a town with 99% coverage, 60Mhz of spectrum and up to 900Mbps of speed at a cost of $3bn. Then there is:
+ a big saving of $3bn dollars.
+ lower cost for service
+ an improvement in coverage
+ an improvement in speed

A possible business plan

Remember this is only #one way# of acheiving this. Let’s call the wholesale company (WholeMobile):
+ Each of the providers (A-C) would invest $1bn
+ Each of the providers would provide information of their currently owned mobile tower sites and current backhaul arrangements WholeMobile.
+ WholeMobile would pay the appropriate providers to upgrade the best sites to LTE (selecting from sites from all three providers)
+ WholeMobile would receive free access to the LTE services and ownership of the LTE components.
+ The tower property could remain property of the providers.
+ Co-located equipment would remain property of the respective owners.
+ The spectrum would be owned by WholeMobile.
+ WholeMobile would pay the relevent providers to upgrade backhaul to the various sites, with all the additional bandwidth belonging to WholeMobile.
++ Where upgrading backhaul does not suffice, new links will be commissioned by WholeMobile and fully owned by WholeMobile.
+ Profit from WholeMobile is saved for future network upgrades. Any excess profit is returned as a profit to investors.
+ The government may make a small investment to help inspire the process.

Operationally:
+ WholeMobile represents the full $3bn investment, with ownership of the use of the LTE network
+ Only a few sites should be required, where coverage is to be improved
+ Rural customers now can have premier coverage and speed (no need for satellite), in fact coverage can potentially be 99.9999% of the population and roads.
+ All providers and retailers regardless of investment pay for access (No need for ACCC to regulate prices).
+ Example of access business model: Use a [per KB weighted model]. Traffic on a congested tower results in penalty accounting. Eg. 1KB from a maxed out tower accounts to 10KB for the customer instead. This ensures customers don’t try to use all 900Mb of bandwidth all the time.

The approaching revolution

By the way 300Mbps * 11.5 is 3.5Gbps not 3.5Tbps (my mistake). But keep in mind that the digital dividend is just the beginning. Take into consideration the 403-520Mhz spectrum, and existing licensed spectrum.

Digital technology has been exploding in the wireless domain {Digital TV, Digital Radio, 4G etc}. It is obvious that digital encoding is much more efficient than analog. If the whole spectrum was re-assessed and applied with mostly digital technology, most government, military, navel and air services could be greatly condensed, leaving huge chunks of spectrum for commercial purposes. We are only seeing the beginning of a wireless revolution.

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