900 MHz band use expands 4G coverage throughout Ukraine within 1.5 years

20-06-2019

The Radio-Frequency Resource (RFR) plays a key role in providing modern telecommunication services: mobile and satellite communications and fixed Internet access. At the same time, the resource is very limited, and the advanced Ukraine’s RFR spectrum is distributed and used inefficiently. This makes it impossible to introduce modern technologies throughout most of the country.

In Europe, the 4G communication is available to more than 90% of the population: in the Czech – to 98.8%, in Sweden – to 100% of the population. In Ukraine, according to unofficial data, this figure goes up to 65%. That is, 16 million subscribers do not have access to 4G at all, and 26 million subscribers travel without it.

A number of legislative barriers and restrictions for operators makes it economically unjustified to build communication networks in the regions. As a result, there is almost no high-quality mobile communication outside large Ukrainian cities.

The government and business representatives discussed the ways of solving the market problems during the round table “Effective Frequency Spectrum Management: Ensuring Quality Telecommunication Connection in Ukraine” on June 19. The event was organized by the BRDO with the support of EU4Business/FORBIZ as part of the Public Dialogue #PRODialogue.

“One of the reasons why Ukraine is lagging behind is the outdated regulatory framework. A new law is required to develop this sector, but a number of problems can be solved by subordinate acts. An important difference allowing European countries to have the countrywide coverage is the use of low-frequency ranges (800-900 MHz) provided their technology neutrality. The introduction of such steps in Ukraine will allow to increase the availability of 3G and 4G to 95% of the population within 1.5 years and facilitate the further 5G introduction,” Oleksandr Kubrakov, IT and Telecom Sector Head at BRDO, said.

BRDO experts conducted a systematic analysis of the sector and identified the main problems:

  • A lack of frequencies to introduce the latest mobile technologies.
  • A lack of technology neutrality: companies are prohibited to use frequencies for other technologies than those specified in the license.
  • A lack of public access to reliable information on current frequency use status.
  • Unreasonable requirements for sanitary and epidemiological safety of base stations.
  • No definition of the RFR use “effectiveness”.
  • Radio frequency interference generated by domestic users and illegal businesses.

A key feature of RFR use is that low frequencies provide a larger coverage range, while high frequencies are better suited for the transmission of large volumes of information. Therefore, 800-900 MHz frequencies are used for the countryside, roads, large open spaces, and 2100-2600 MHz frequencies – for compact urban development areas.

However, in Ukraine, 800-900 MHz range frequencies are unevenly and inefficiently distributed to users. For example, as for mobile operators, 66% of the spectrum are concentrated in Kyivstar, 28% are used by Vodafon and 6% by Lifecell. More than 80% of the 800 MHz band are used by Intertelecom for CDMA technology. Thus, Ukraine almost does not use so-called coverage-ranges for modern mobile communication.

At the same time, in Sweden, the 800 MHz band has been used for mobile communications since 2011 and in the Czech since 2014. In these countries, the frequency allocation auctions (700 MHz and 3.6 GHz) for the 5G use have already been conducted or are planned for 2019. In Ukraine, a tender for licenses on RFR using for 3G and 4G was conducted only in 2015 and 2018 respectively.

In addition, in Ukraine, the share of payments for the RFR use significantly exceeds that of the EU countries. These payments are fully made to the state budget, but there is no methodology on determining rent fees. In 2018, the fee for licenses amounted to 200 million hryvnias, while the rent fee for RFR use was 2.5 billion hryvnias. Additionally, users pay over 22% of the rent amount to the UCRF (Ukrainian State Centre of Radio Frequencies), to which some licensing functions have been transferred.

A comprehensive solution to problems requires the adoption of a new special law that will regulate electronic communications in general and the RFR in particular. At the same time, a number of important aspects can be resolved by means of subordinate acts.

For example, it is possible to start introducing the technology neutrality and increase available frequencies by amending a RFR Usage Plan indicating the possibility of using all the modern technologies used at relevant frequencies in the EU. It is important to perform the frequency refarming and redistribution, without which operators won’t be able to use advanced technologies, in the 800-900 MHz spectrum. The introduction is possible under the existing legislation through the decisions of the NCCIR and the Government.

The MOH order can regulate excessive sanitary and epidemiological safety requirements that directly affect a communication signal reception range. In spite of the fact that in Ukraine, the limit levels have been already increased in 2017, they are still 45-100 times more severe than ones recommended by the WHO and widely used in the EU.

Increasing rental rates for the use of advanced frequencies to ensure the more efficient RFR distribution to users is possible by amending the Tax Code during the annual budget process.

According to the EU-Ukraine Association Agreement, Ukraine is also obliged to implement European approaches in the sector by the end of 2019, however, the vast majority of requirements are currently not implemented. Moreover, on December 11, 2018, the European Code of Electronic Communications providing for more detailed regulation of issues related to the RFR use rights was adopted. In particular, it is technology neutrality, measures to ensure the effective RFR use and avoid distortions of competition, the shared radio-frequency spectrum and infrastructure use. Consequently, the national legislation should be amended taking into account these standards.

The event was attended by Oleksiy Honcharuk, Deputy Head of the Presidential Administration of Ukraine, Matthias Halder, FORBIZ Project Manager in Ukraine, Oleksandr Zhivotovsky, Head of the National Commission for the State Regulation of Communications and Informatization, Oleksandr Danchenko, Head of the Verkhovna Rada Committee for Informatization and Communications, representatives of the National Council of Television and Radio Broadcasting, the State Service of Special Communications, mobile operators, Internet providers and other telecom services, experts and the media.

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