4G Licence Award

4G Licence Award

We in IrelandOffline are delighted that the spectrum auctions raised badly need revenue for the state and hope this revenue can be used wisely for the benefit of the Irish people. One of the key goals of the auction was a 70% population coverage clause (cf 98% for UK auctions). We would, however like to take this opportunity to publicise what 70% geographic coverage actually means for rural consumers. It is less than 13% of the national area.(1)

Even worse only 50% of the population need be served by the new technology and by the end of 2015 and existing technology such as 3G may be used to ‘fill in’ the remaining 20%. This raises the possibility that 4G coverage, even in 3 years time, could be well below 10% of the state by area and still comply fully with the insipid targets set by Comreg. By contrast the Esat Digifone licence awarded in 1996  had to cover 5 times more area, in a country with far fewer masts and in only half the time.

Eamonn Wallace, chairman of IrelandOffline said: “While it is good for the state that a reasonable amount of revenue was raised, people should be wary of the total figure as outlined in the Comreg Press Release. It will be subject to as yet uncalculated rebates not to mention the cost of three different sets of consultants and the hire of extremely expensive auction software.

The deliberate failure of Comreg to mandate any meaningful geographic coverage after 2015 is the clearest message to the market that that the regulator is now only prepared to regulate for urban areas.  ComReg has not substantiated any reasoning for it’s low coverage conditions, preferring instead to defer to UK based consultants.

One of the goals at the outset, bizarrely, was to increase the number of operators from four to five. This singularly stupid idea was based on the work of an early 19th century economist, Cournot,  using a set of simplistic assumptions. That premise underpinned the entire consultation. In the end, in effect, they have accepted the minimum bids for minimal spectrum from 2 bidding cartels masquerading as 4 separate entities. Another early goal was that the licensees  would each build their own networks. The operators wisely ignored that condition and proceeded to coalesce into two infrastructures. We believe that a better network, better speeds and more money could have been achieved by simple common sense.”

IrelandOffline regrets that a huge opportunity has been missed to share spectrum. Seventy five percent of the functionality of mobile cells will be lost, resulting in greatly lowered average speeds and more disconnections. Rural residents, if they get any 4G service at all, will be dependent on on a service that has been crippled from its inception.“

Wallace continued “ the deliberate rollback of the coverage requirements to urban areas only is scandalous and shows that Comreg operates under a flawed ideology of what they define as competition, competition by its very nature is supposed to give better services to all, however allowing the networks to simply concentrate on urban areas only is by no means what “competition” is all about. Rural customers need not participate is this bright and shiny future. A big thank you to Comreg from all Irish rural consumers!”

Notes
(1) http://irelandoffline.org/2012/06/comreg-and-70-population-coverage/