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Mexico’s adoption of the APT band plan is good news for Latin America and Asia

On Friday, the 21st of September, COFETEL, Mexico’s telecoms regulator, confirmed that Mexico has adopted the APT band plan for 700MHz digital dividend spectrum. In the arcane world of spectrum management this is a very exciting step. The interesting bit is that Mexico set the scene for the rest of Latin America not to adopt the convoluted and inefficient US 700MHz band plan. This splits the ITU Region 2 into two.

With an allocation of 2x45MHz, the APT band plan is of course much better than the US 700MHz mess.  Not only is the US 700MHz plan inefficient in its overall use of spectrum, but matters are made worse because in part of the band the uplink and downlink are reversed, the lower D&E blocks cannot be downlink aggregated with B&C because they are adjacent to the uplink portion of B&C, as well as other issues which fly in face of the goal of spectrum management to use scarce radio spectrum resources efficiently.

The band plan debate is hugely important in the context of the device eco-system, i.e. which technology and band combinations are included in chipsets, handsets and other devices. The Mexican decision leads to a situation where Mexico and potentially many other Latin American countries will require handsets that incorporate Region 2 bands as in the US (for example the PCS band 2, 850MHz band 5), but not in 700MHz, where they require the APT band. While there are some differences within Region 2, hitherto Region 2 markets where “technology takers”, i.e. they followed the US to benefit from technology harmonisation. Because of the sheer size of its market, whatever the US adopted became the standard for the region.

The consolidation of the wireless industry in the US made matters worse because AT&T on the one hand and Verizon on the other hand are so large that they can in effect create their own LTE handset eco-system. While the US always suffered from technology barriers to competition i.e. EVDO vs. HSPA, instead of alleviating it the US 700MHz band plan exacerbated technology barriers to competition.  Verizon is camped in the upper C block and AT&T in the lower B and C blocks.  Chipsets used in phones work on one network or the other, but not on both. The recent launches of the new iPad and the iPhon5 is a perfect illustration of this issue, with  Apple launching different versions for AT&T and Verizon, both with very different LTE band combinations.

 mex lte 1

The lack of harmonisation issues does not end here.  AT&T specified handsets that work in IMT Band 17 (the lower B&C blocks) but not in Band 12 (the lower A, B, C blocks).  According to statements made by AT&T and Qualcomm, Bands 17 and 12 are incompatible although they overlap.  This means that AT&T will not specify Band 17 devices any time soon and US operators who hold A block spectrum cannot obtain devices that make use of the A block. As a result 2x5MHz of digital dividend spectrum is currently wasted and the two largest US operators managed to reinforced their competitive advantage on the back of the iPhone5 launch by taking advantage of the technology barriers erected as a result of the US 700MHz band plan.

In addition to the 700MHz mess, the US also managed to make a hash of the 2.6GHz IMT Band 7. Band 7 is potentially globally the most harmonised LTE capacity band.  The standard allocation of 2x70MHz FDD and 50MHz of TDD in centre provides a total of 190MHz, badly needed to cope with the growth in mobile data traffic in high density areas.  In Europe the band has been allocated to multiple operators in a sensible manner, whereas in the US the spectrum is owned by Clearwire who first tried to introduce WiMax in the band and now decided to switch to TDD-LTE. But neither AT&T nor Verizon hold 2.6GHz spectrum and hence they do not specify Band 7 in their handsets. This is an issue for example for the Canadian wireless operators who find it hard to procure handsets which include the US LTE bands and also LTE in Band 7.

This demonstrates that due to the handset band combination issue the ill effects of the US spectrum policy are felt beyond the US borders. This is why Mexico must be congratulated for not aligning with the US.

Mexico represents a market with 133 people. While in terms of their age profile and income the population is not directly comparable to the US market with 312 million, it is nevertheless a sufficiently large market to have an impact on the device eco-system development.  If Brazil adopts the APT band plan, this would add 197 million and Argentina would add 41 million to the market for Region 2 handsets with LTE in the 700MHz APT band plan. This is good news for the whole of Latin America and of course Asia where the APT band plan is gaining momentum. The GSMA rightly applauded COFETEL’s decision to adopt the APT band plan.

About the author

Stefan Zehle is the Chief Executive Officer of Coleago Consulting

 

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