Why the Spectrum Management Authority moved 700MHz Spectrum License Auction to Wednesday May 22 2013

Wednesday May 22^nd 2013is a day that will forever be etched in History for Jamaica.

Wednesday May 22^nd 2013 is fast approaching for interested parties to submit their Proposals and bids to the SMA (Spectrum Management Authority)  for one of the two (2) 700MHz Spectrum to provide 4G LTE Wireless Broadband Internet as stated in the article “Jamaica to tender 700 MHz licences in May”, published Wednesday April 17, 2013, The Jamaica Gleaner.

If I’m reading this right, the SMA sanctioned Auction has being moved up from Monday July 15^th 2013 to Wednesday May 22^nd 2013!

In essence, it’s an acceleration of the date for the Bidding for the blocks of the 700MHz Spectrum announced by Minister Paulwell on Tuesday March 26^th, 2013  in Parliament in my blog article entitled “Minister Paulwell in Parliament debut two 700MHz Licenses for 4G LTE for Monday July 15 2013 Auction - 4G LTE Means After Earth Everything is Possible”.

Spectrum Management Authority Sale – 4G LTE being auctioned to Telecom Providers

Up for grabs on Wednesday May 22^nd 2013 is two (2) blocks of 700MHz Spectrum out of a possible three (3) blocks, each roughly about 20MHz in size:

1.      Band 13

2.      Band 17

Asking price is a tad steep for what will be a very historic Telecoms License Bid:

1.      US$40 million for one block of 20MHz without the requirement of a Fiber Optic Interconnectivity for International Calling; piggyback on another Provider e.g. FLOW

2.      US$45 million for one block of 20MHz with the requirement of a Fiber Optic Interconnectivity for International Calling

3.      US$3 million to reserve a Bid on either block of Spectrum

This is exactly as detailed in my blog article entitled “Minister Paulwell in Parliament debut two 700MHz Licenses for 4G LTE for Monday July 15 2013 Auction - 4G LTE Means After Earth Everything is Possible”.

 

The basic requirements for the Bidders are as follows:

1.      4G LTE Wireless Broadband Network can be either LTE (Long Term Evolution) or WiMaX IEEE 802.16m

2.      4G LTE Wireless Broadband Network has to be built in five (5) years

3.      Telecoms Licenses are 15 Year Leases on Spectrum, not inclusive of any microwave Spectrum that the incumbent may chooses to utilize

4.      4G LTE Wireless Broadband Network has to achieve 90% Geographical coverage of the island within that period of time

5.      Tower and Infrastructure sharing is now mandatory, with ALL Telecom Providers having to share Towers and all other Infrastructure such as Building space to minimize the Environmental Impact

So how does the bidding process work for these blocks of spectrum?

Telecom License Details – CAPEX makes 4G LTE prohibitively expensive

However, the article “US$40-MILLION broadband licences”, published Wednesday, April 17, 2013 by CAMILO THAME Business co-ordinator, The Jamaica Observer provides some more tantalizing details.

Bids will have to include a business plan, detailing:

1.      Projected Percentage population coverage per year during the 5 year build-out

2.      CAPEX (Capital Expenditure) during the 5 year build-out

As it relates to the 5 year build-out, progress should be as follows:

1.      For established Telecom Provider already in Jamaica, launch of 4G LTE Networks to the Public within 1 year and 6 months

2.      For New Telecom Provider debutante in Jamaica, launch of 4G LTE Networks to the Public within 2 years

Progress is scaled differently for Established and New Telecom Providers as well. For Established Telecom Providers:

1.      50% 4G LTE Networks Coverage in 1 year and 6 months

2.      90% 4G LTE Networks Coverage in 4 years

For New Telecom Providers:

1.      30% 4G LTE Networks Coverage in 2 years

2.      90% 4G LTE Networks Coverage in 5 years

Failure to achieve any of the above will result in a loss of the license. If there are more Bidders than Bands, the prices can go higher, much higher. But this is unlikely as the CAPEX (Capital Expenditure) for providing speeds higher than 10MBps going up to 100MBps which 4G LTE is capable would make the service too expensive for mere mortals in Jamaica to afford.

LIME outsources to Ericsson - LIME gearing up for 4G LTE Build-out

Thus, what’s more likely come Wednesday May 22^nd 2013 will be groups of Telecom Providers banding together to bid for either of the two (2) 700MHz Spectrum Licenses. Cost containment will most likely be foremost on their minds, especially for Telecom Provider Digicel and Telecom Provider LIME who I speculated may possibly be banding together to bid for the Bid for lower cost US$40 million 700MHz Spectrum License and subsequent build-out.

Telecom Provider LIME has already long begun the process to outsource it 300 strong Maintenance team to Telecom Equiptment Provider Ericsson, an unprecedented move for those like myself who’ve worked with C&W and know the culture very well.

They made the announcement on Tuesday, March 26^th, 2013 in the Media of its intentions as mentioned in the article “LIME to lay off 300 as it partners with Ericsson”, published Tuesday, March 26, 2013 6:28 AM, The Jamaica Observer  and “LIME outsources operations to Ericsson”, published Wednesday March 27, 2013, The Jamaica Gleaner.

This is the same Telecom Equiptment Provider for Telecom Provider Digicel as noted in my blog article entitled “Minister Paulwell in Parliament debut two 700MHz Licenses for 4G LTE for Monday July 15 2013 Auction - 4G LTE Means After Earth Everything is Possible”.

Upon being laid off, LIME Maintenance personnel will be re-employed by Telecom Equiptment Provider Ericsson and Ericson will assume full responsibility for Telecom Provider LIME’s Network by Thursday May 30^th 2013.

4G LTE on the horizon – Future growth of 4G LTE in the hands of Teenagers

Meanwhile April’s been one busy PR (Public Relations) Swirl.

Digicel announced on Friday April 5^th, 2013 the upcoming launch of the sub-US$100 smartphone, the DL600 in May 2013 as per Digicel’s Press Release on March 27^th2013. Digicel made this announcement out of nowhere on, with no press announcement and no grand launch, save for a posting on their Website.

I was lucky enough to spot it early and I’d speculated this was a push for increased smartphone sales and usage of their 4G Mobile as concluded in my blog article entitled “Digicel to launch the DL600 Smartphone by Mid-May 2013 starting below US$100 - Alcatel One Touch running Firefox OS marketed like The Incredible Burt Wondersone”.

Less than a week later on Monday April 8^th 2013 and Tuesday April 9^th 2013, BOTH Telecom Provider LIME and Telecom Provider Digicel made donations of Tablets to schools in Kingston and St. Andrew as noted in my blog article entitled “LIME and Digicel both make Donations of Tablets to Preparatory and Primary Schools - How Indiana Jones and the Raiders of the Lost Ark started a Love for Computer Programming Languages in Jamaica”.

More signs of Telecom Providers realizing that any future growth of 4G LTE would have to be predicated on the very young being introduced to the latest technology as they’ll need access to the Internet for educational purposes on a device that can be easily controlled. Best of all, Tablets reduce the need to build more Labs by enabling the use of Wi-Fi in the Classroom, thereby turning any schoolroom into an IT Lab. IT can now be taught in any classroom like any other subject, requiring no special room.

Thus the E-Learning II Project got a boost with planned subsidized gifting of 20,000 Tablets to some 30 under-performing schools as noted in my blog article entitled “Minister Paulwell gives Parliamentarians and 20,000 Students in 30 Schools Tablets - Future in Science and Technology now rescued Indiana Jones and the Palace of Doom” to help improve their IT competency.

Not only will it improve their school performance and inspire them to be their best and not feel society has abandoned them, but it’ll also encourage them to pursue careers in Science and Technology, particularly Programming and take an interest in learning Languages. Hopefully too, Private Sector Companies may take a second look at the E-Learning II’s initial phase, the Schools Tablet Computer Programme and decided to contribute Tablets or even lend their expertise in installing Wi-Fi Hotspots.

So there you have it.

Tag-Teams to acquire very expensive 15 year Telecom Licenses and build them within a 5 year span, with very rigid timelines. Already the Telecom Providers are creating the very market by seeding the minds of the very young with devices that can access these 4G Networks, stepped down via LTE to Wi-Fi Routers of course, a big hint as to how to reduce the CAPEX at the Customer end.

Truly a Mission Impossible - Ghost Protocol (2011), but as is now well known from my experience with CLARO, with the future of Jamaica at stake, Everything is Possible as we push Jamaica forward into the 21^st Century come Wednesday May 22^nd 2013.