Acting Chairman and CEO Head of Telecommunications Technologies Unit Telecommunications Regulatory Authority The Importance of Regulation for Investment Certainty and Facilitation of Further LTE Deployments Dr. Imad Hoballah Vice Chairman, Arab Spectrum Management Group (ASMG)

Outline Importance of Regulation to Facilitate Substantial Coverage Improvements Lessons Learnt from LTE Spectrum and Deployment Strategies in Europe LTE and Mobile Broadband Bands in the Arab Region What is the most effective way for regulators to work with operators? Beyond Spectrum Availability: Effective regulation to balance between Mobile spectrum and contrasting spectrum uses for Other Sectors

Importance of Regulation to Facilitate Substantial Coverage Improvements

4 301 Operators are Investing in LTE in 95 Countries & 57 Commercial Networks in 32 Countries 57 commercial LTE networks as of march LTE network planned

5 Germany Operators have to cover 90 percent of rural area’s of less than 5,000 inhabitants using 800 MHz before starting deployment in attractive regions. Spain Licensed operators on 800 MHz must jointly cover 90 percent of villages of less than 5,000 inhabitants with a speed of at least 30 Mbps by the end of 2019 Italy Licensed operators have to cover 30 percent of a list of towns of less than 3000 inhabitants three years later (by the end of 2015), 75 percent five years later (by the end of 2017), and 100 percent 7 years later (by the end of 2019) Source: Arthur D Little “LTE Spectrum and Network Strategies” 2012 France In March 2011, French cabinet has approved a plan produced by ARCEP to impose a 99.6% population coverage requirement for 800MHz licenses Sweden Licensee shall cover households and working places that do not today have basic possibilities for broadband Regulators impose coverage and speed obligations on LTE Deployments to Facilitate Substantial Coverage Improvements 90% LTE coverage of areas having less than 5000 inhabitants Opportunity to cover remote and underserved areas Underlying Theme

Lessons Learnt from LTE Spectrum and Deployment Strategies in Europe

7 Regulator Strategies in LTE Bands: Allocations and auctions timing are key factors to control the bands values

8 Lesson learned when auctioning off both Higher Band and lower Band (800MHz +2600MHz) simultaneously: 1)Bidders will focus on the Lower bands (800MHz) 2)Low Bid competition on Higher Band 3)Lower Bands Average Value per MHz can reach 10 th of times more than that of the Higher Band (2600 MHz) LTE bands allocations and auctions timing are strategic keys to control the bands values by regulators Strategy A

9 Lesson learned when Higher Band allocation and auctioning is scheduled before Lower band (2600MHz before 800MHz): 1.High Bid competition on Higher Band. 2.Low Bid competition on Lower Bands (800MHz), without loosing the real value of the band where the Average Value per MHz still can reach up to 3 times more than that of the Higher Bands (2600 MHz). LTE bands allocations and auctions timing are strategic keys to control the bands values by regulators Strategy B

Strategy A Vs Strategy B 10 Lower Band Average Value per MHz in strategy A can reach up to 2 times more than when strategy B is applied Strategy B allows the Maximization of the High Band Average Value per MHz where it can reach up to 2-3 times more than when strategy A is applied

11 LTE bands allocations and auctions timing are strategic keys to control the bands values by regulators 6x 3x 1 Year 3 Years

12 Auction Timing and market Status are essential keys to ensure a high bid competition in both Higher and lower Band Spectrum auctioning strategies are governed by Spectrum availability, Migration plans and Re-farming plans. LTE bands allocations and auctions timing are strategic keys to control the bands values by regulators

13 Mobile Operators Follow Two LTE Deployment Strategies: 800 MHz MHz OR 1800/2600 MHz 800 MHz Attractive features Enables the best indoor coverage, which is critical as people will mostly be using LTE-based data connections indoors on their smartphones, notebooks or tablet PCs Requires less than a tenth of the number of sites required for the same coverage at 2.6 GHz Source: Arthur D Little “LTE Spectrum and Network Strategies” 2012

14 Mobile Operators Follow Two LTE Deployment Strategies: 800 MHz MHz OR 1800/2600 MHz 1800 MHz Optimal Features Maximizes capacity and coverage, and optimize operator’s cost structure Likely to be an important enabler for international roaming Source: Arthur D Little “LTE Spectrum and Network Strategies” 2012

LTE and Mobile Broadband Bands in the Arab Region

16 LTE Deployments in Arab Countries Bahrain Regulator planed to offer later this year or in early GHz FDD, additional bands to be offered on 1800 MHz and 900 MHz and 15 MHz of 1.9 GHz unpaired.. UAE Regulator planed to release 790 ‒ 862 MHz by end of 2012 and make 2.6 GHz available for LTE services. Etisalat announced commercial launch of its 2.6 GHz LTE FDD network on Sep Du Commercial launch of LTE FDD on1800 MHz is expected in 2012 Egypt Vodafone Egypt is trialing LTE technology on the 2.6GHz FDD and has achieved 100 Mbps D/L and 47 Mbps U/L speeds. Mobinil and Etisalat Misr are both also trialling LTE Jordan TRC planed to make 2.6 GHz FDD available for LTE licenses. Zain Jordan is expected to commercially launch LTE service in KSA STC and Etisalat (Mobily) commercially launched LTE TDD on Sep 2011 in band 40 (2.3 GHz) Zain commercially launched LTE1800 (FDD) service on Sep 2011 Source: GSA “Evolution to LTE report” April 2012

17  High priority should be given for Re-farming of 2600 and 1800 MHz bands, ensuring at least a regional Harmonization potential Since 2600 MHz Spectrum Lead Middle Eastern LTE Deployments at this Time 1800 MHz Spectrum to Lead Middle Eastern LTE Deployments by 2015  Digital Migration should be accelerated: Congestion of sub–1 GHz Spectrum Increasing Demand and interest in the digital dividend bands (700 and 800 MHz) Lessons Learned From LTE Deployments in Arab Countries

18  1800 MHz band could serve as a primary band for LTE deployment for mobile broadband operators  3G spectrum is available for additional players as 10 MHz FDD per operator is considered sufficient Status of Prime Mobile Spectrum Bands in Lebanon Source: TRA Lebanon April 2012

19 LTE Prime Bands and Other Mobile Broadband Bands in Lebanon Source: TRA Lebanon April 2012

What is the most effective way for regulators to work with operators?

21 Regulator’s relation with operators should be driven by the golden triple Key : 1- flexibility, 2-Transparancy and 3-clarity  Public consultations, Forum organization, workshops.  Regular Public publishing and communications of spectrum allocation plans and policies.  Encouragement of Telco sector stakeholders to participate in ITU and WRC’s meetings.  Maintaining Investment Certainty Via flexibility, transparency and clarity in regulations, spectrum allocations and policies. And considering regional harmonization and potential for international roaming.

22 Regulators should demonstrate and communicates their commitment to ensure Investment Certainty  Decision on coverage obligations whether to be applied on specific spectrum bands or licensed mobile operators irrespective of the operating band  Re-farm spectrum bands thus making room for LTE (and other technologies) while insuring a minimum level of harmonization.  Decision on technology neutrality: Regulator to license the bands and letting the operator decide on the technology to use  Adopting new technologies and measures to increase efficient utilization of spectrum and to resolve interference issues such as: Cognitive radios that enable the use of noncontiguous chunks of spectrum bands Spectrum-sensing technologies that allow bands to be shared by multiple users Technologies allowing spectrum bands to support more efficient modulation  Assessment of the impact of migration on consumers, operators, and cost to economy versus long term benefits of refarming or liberalizing certain bands of the spectrum  Setting rules and procedures to adopt infrastructure sharing, particularly involving active sharing (e.g., Single RAN and Spectrum Sharing) and passive sharing of towers and ducts

Beyond Spectrum Availability: Effective regulation to balance between Mobile spectrum and contrasting spectrum uses for Other Sectors

24 International Experience to Address the Balance Between Mobile Spectrum and Contrasting Spectrum Use for Other Sectors France A Digital Coordination Council grouping the audiovisual communications and telecommunications regulatory parties will be set up to allocate the new digital dividend frequencies in an efficient manner. UK The transition from analogue to digital TV in the UK is managed by Digital UK, an independent organization that has been created to lead this process. Winners of the 800 MHz could have to shoulder the £100m cost of ensuring that signals do not interfere with digital terrestrial TV. USA Incentive Auctions to Free-Up Additional Mobile Broadband Spectrum. The FCC would auction the spectrum that licensees voluntarily return for wireless broadband services, with licensees retaining a portion of the auction proceeds. The FCC allocated a good chunk of spectrum in the recently re-farmed Digital Dividend to national Public Safety including both Narrowband and Broadband applications

25  Regulators utilize LTE deployments to facilitate substantial coverage improvements by imposing obligations such as 90% LTE coverage of areas with < 5000 inhabitants  In Europe, auction results show that LTE bands allocations and auctions timing strategies are key factors in controlling the bands values  Best practice indicate that mobile operators follow two LTE Band pairings deployment strategies: 800 MHz MHz OR 1800/2600 MHz  Regulator’s relation with operators should be driven by the golden triple Key flexibility Transparency clarity  Maintaining investment certainty dictates that regulators should address several challenges: Adopting active and passive infrastructure sharing Refarming spectrum bands to make room for LTE deployment Deciding whether coverage obligations should be per spectrum bands or on licensee basis  Government/ Regulators must address the balance between mobile spectrum and contrasting spectrum Use for other sectors (Broadcast, Public Safety, etc.) Conclusion

Thank You