The Tribune

By NEIL HARTNELL Tribune Business Editor THE Bahamian communications regulator has reversed course by deciding not to reserve space in the key 700 MHz radio frequency spectrum for a third cellular operator, while noting that this band could enable the Bahamas Telecommunications Company (BTC) to deliver data to its clients six times' faster. The Utilities Regulation & Competition Authority (URCA), in its statement of results on the consultation dealing with the licensing and allocation of new spectrum bands, decided to commit something of a 'u-turn' from the draft sector policy by reserving space in the 700 MHz range for just two cellular operators, as opposed to the initial three. This is likely to raise some concerns that the Bahamian cellular telecommunications market, when eventually liberalised from 2014 onwards, while have an environment that encourages a duopoly, rather than the extra competition a third player would create. However, URCA said the future needs of Bahamas-based cellular operators, who would rival incumbent BTC, were outweighed by the current demand for spectrum in the 700 MHZ range from non-cellular/mobile telecommunications operators. Explaining the rationale for its decision, the Bahamian communications regulator said: "URCA has reviewed its position based on the likely period of time which will elapse before a third mobile provider will be legally permissible in the Bahamas (i.e. not before 2016). "URCA has considered whether the need to reserve 700 MHz spectrum for that possibility may be outweighed by the current demand for that spectrum in the market. URCA believes that the immediate need for spectrum by non-mobile operators warrants greater consideration, particularly in light of possible technological and market changes that may occur before 2016, and the fact that other bands, which are already reserved for mobile services, are able to accommodate LTE (Long-Term Evolution) technology. "Accordingly, URCA has reconsidered its approach and adopted a revised band plan which will make available an additional 24 MHz of spectrum for non-mobile operators, by reserving spectrum for only two mobile operators, rather than the three mobile operators for which URCA reserved spectrum in the draft policy." URCA explained that the 700 MHz band was set to generate "significant interest" from communications industry players, given that its broad coverage and high capacity were ideally suited to the latest mobile and fixed data technologies. It is the dominant band globally for the likes of fourth generation (4G) cellular technology just launched by BTC and its new majority owner, Cable & Wireless Communications (CWC), and the LTE technology employed. As a result, URCA said it was making 72 MHz, of the available 108 MHz, available for licensing now. When it came to the remaining radio frequency in the band width, URCA said some 12 MHz was being reserved for public health and safety, with another 24 MHz being allocated to the second cellular provider that will enter the market in 2015, following the April 2014 expiration of BTC's monopoly. Responding to Cable Bahamas' argument that BTC should not be allocated any more space in the 700 MHz frequency until two years after its cellular monopoly expired, so as to 'level the playing field', URCA said an upgraded 4G LTE service could offer the latter's existing cellular clients "theoretical peak data rates that are more than six times' the rates offered by the current HSPA+ technology being used". The regulator added: "URCA's understanding of BTC's interest in the 700 MHz band is that it can be used to upgrade its existing 4G services from the current technology (which is provided using BTC's existing spectrum allocation) to LTE technology, offering faster speeds and more and better services to its mobile customers. "URCA does not consider it appropriate to deny the public in the Bahamas the benefit of those services, or to delay their introduction because BTC is, by law, the only company entitled to provide mobile services, and it may offer them a head start against their competition at the point when that market is opened." When it came to pricing, URCA said spectrum blocks in the 700 MHz range not used for mobile communications services would attract a $6,000 per year fee, and those employed for mobile some $8,000 per year. These prices will remain in effect until URCA carries out a review of spectrum fees in 2013. As for roll-out timetables, licensees awarded spectrum for non-cellular services must start active operations on New Providence and Grand Bahama after 18 months. And, after 30 months, roll-out with 75 per cent coverage on Abaco and Eleuthera must start, and 99 per cent coverage on New Providence and Grand Bahama be achieved. Similar timetables were also imposed on 700 MHz spectrum permitting mobile communications. After 18 months, licensees must have 75 per cent population coverage on New Providence, Grand Bahama, Abaco and Eleuthera, increasing this to 99 per cent after 30 months and rolling-out to two other Family Islands.