I’ve spent most of this week in Kiev (or should that be Kyiv?) talking to mobile network operators and various other interested parties. There’s a unique set of circumstances that makes it an interesting case study for mobile broadband. There’s only one UMTS licence awarded, to Ukrtelekom, incumbent PTO and now greenfield 3G operator. Meanwhile the other mobile operators are becoming increasingly frustrated, and rightly so, by the government dragging its heels over allocating the other 3G spectrum. This has had a real impact on 3G deployment as the economic downturn has hit the local currency hard with the result that infrastructure has become significantly more expensive. So the delays have had a possibly permanent impact on the deployment of UMTS.
As a result of the lack of 3G infrastructure is a very underdeveloped market for mobile broadband. Particularly depressing given the relative lack of fixed-line infrastructure. DSL is hampered by poor fixed line infrastructure. However, fibre-to-the-building deployments, both legal and questionable, are going ahead fairly rapidly. Kiev, for instance, is a city of tower blocks and fibre is a good way of addressing user demand.
So, does this leave mobile operators high and dry? Not at all. It just means that they have to be more creative. One operator, MTS, has reused its old NMT-450 spectrum for CDMA 1X-EVDO Rev A and deployed a mobile broadband (i.e. no voice) service using that spectrum. The others are squeezing the 2G network as much as they can.
Of course, they’re still crying out for more spectrum but given the current exchange rate it’ll be expensive to deploy mobile broadband. So we expect them – when the 3G licences are finally awarded – to focus on dense urban areas.
Despite all the problems, we’re fairly bullish about their potential. As outlined in the report Mobile broadband in Europe: forecasts and analysis 2009–2014 we’re expecting 10% penetration by 2014 and continuing growth after that.