One-Stop Shop Pooh-Poohed for European Mobile-Satellite Licenses
A European Commission plan for a one-stop shop for mobile satellite service licenses is good news for Europe’s satellite industry but may not matter much, Phil Kendall, Strategy Analytics’ global wireless practice director, said Wednesday. Under the proposal, which aims to boost high speed data communications, the EC, with member nations, would pick licensees to operate in the 2 GHz band across Europe. But mobile phones’ predominance and the European satellite sector’s woes, make the plan’s success iffy, Kendall said.
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EU-wide mobile satellite services’ potential is “massive,” said Information Society & Media Commissioner Viviane Reding. They could be used for mobile TV, broadband for all, public protection and disaster relief, she said. The EC’s proposed legal framework for choosing operators will embolden industry about investing in such services, she said.
Europe has no mobile satellite service for Europe because at present it’s not feasible financially, Reding’s spokesman said at a briefing. International rules for satellite communications don’t cover licensing, and EU telecom regulations leave selection of operators to national authorities, creating divergent approaches to selection and authorization and potentially hampering growth of pan-EU mobile satellite systems, the commission said.
The proposed comparative selection system would include a single open call for applications, an EC document said. Candidates will be rated first on technical and commercial development based on reaching certain milestones. If no spectrum scarcity is identified, eligible applicants will be picked and authorized by relevant national authorities. If spectrum scarcity exists, eligible applicants will be held to further criteria, including pan-EU geographic coverage, consumer and competitive benefits, spectrum efficiency and public policy objectives.
The proposal needs approval by the Europan Parliament and Council of Telecommunications Ministers. The commission wants to complete selections in early 2009, but acknowledged that the procedure for getting there is “lengthy and quite cumbersome.” The EC will propose an even faster means of approving such pan-EU services in reviewing its electronic communications regulatory framework, expected in late October, Reding’s spokesman said.
The plan is good for the mobile satellite industry “but that isn’t really saying too much,” Kendall said. Demand is low for mobile satellite services due to high mobile phone use and cellular network build-out, he said. In many places mobile signals aren’t available, he said, but the number of people needing a signal is “pretty limited.” There may be maritime and aviation opportunities and niches in mining, construction, road-hauling and logistics, he said.
The mobile satellite sector’s “troubled past” includes financial challenges and failures suffered by Iridium, ICO Global, Globalstar, Teledesic and others, Kendall said. Europe’s three major players, Thuraya, Iridium and Globalstar, have only around 800,000 total terminals in use, he said, and the vast majority probably are used outside the EU, he said.
It’s difficult to gauge the potential of any system emerging from the EC proposal, Kendall said. With its brief time lines, continued mobile network deployment and ongoing EU efforts to scale back international mobile roaming rates, a problem the original satellite providers wanted to solve in the 1990s, “this is going to be a really tough proposition to break into the market,” he said.
No major roadblocks appear to impede the proposal, and it’s a valuable step toward helping to license a mobile satellite system for Europe, Kendall said, but analysts are “just not convinced” it will fare well. The EU correctly suggests that financial considerations leave the currently reserved spectrum mostly unused, he said, but “I wouldn’t place all of the economic problems on the cost of acquiring 27 separate country-level licenses.”