Comments of Vodafone Albania on allocation of usage rights for frequencies in 800 MHz band (790-862MHz)

Following the Decision of Executive Council no. 10, dated 15.02.2018 “On allocation of usage rights for frequencies in 800MHz band (790-862MHz), Vodafone Albania Sh.a. (“Vodafone”) together with Vodafone Group welcome any initiative of National Regulatory Authority on spectrum assignment since it serves the objective of new investments in innovative technologies and improves the quality of services provided to consumers.

Vodafone, due to its development needs, has always shown great interest to the position of the Albanian Government on the digital dividend starting with Decision of Council of Ministers (“DCM”) no. 322, dated 05.05.2010 “On approval of the Policies Document on Electronic Communications in the Republic of Albania; the strategy to switch from analog transmissions to numeric ones as approved with DCM no. 292, dated 02.05.2012; continuing with the DCM no. 468, dated 30.05.2013 “On approval of the Broadband Development National Plan”, as amended.

Vodafone, from the first moment it entered the Albanian market, has established itself as a relentless investor and a pioneer in the development of new technologies. This has been achieved with the support of Vodafone Group, which has driven Vodafone Albania towards high service standard that proudly classified it among the top companies with regard to mobile network speed as per the latest Speedtest Global Index of February 2018 where Albania ranks in the 39th place1, above other countries such as United States, United Kingdom, Germany, Japan etc thanks to the Speed Score of Vodafone Albania.
 
In addition, Vodafone has always shown concern with regards to this particular spectrum clearance process initiated by AKEP, AMA and the Albanian government in order to provide a spectrum free from any interference that might be caused by television channels that transmit analog signal. However, this process has not been concluded yet as in some cities such as Fier, Lushnje, Divjake etc. the clearing process has just started. This would be in any case a pre-requisite for any spectrum assignment to be implemented.
The benefits of using this band vary and are multi-dimensional. As AKEP has stated in its document, in Europe the band of 800 MHz has been more than 5 years that is being used also for the mobile services. Awarding of this band has come not only as a necessity due to data traffic increase, but also considering its direct impact in the economic level of the country (GDP). With regards to direct consumer benefits from usage of this band, the main component is the Internet of Things – IoT – which is gradually being developed globally.

The various services and applications of user cases of IoT have been classified under the following four categories:

1. IoT Public (applications that serves the general public).
a. Smart metering (electricity, gas and water);
b. Alarms & event detectors (security and home safety against fire or intrusions);
c. Smart garbage bins.

2. IoT Industry (applications that help to improve general enterprise and industrial efficiency).
a. Logistics tracking (real time tracking of shipments’ location);
b. Asset tracking;
c. Smart agriculture.

3. IoT Applicance (smart home).

4. IoT Personal.
a. Wearables (smartwatches);
b. Smart bicycle;
c. Kids monitoring;
d. Smart parking;
e. Pet tracking.

Although the IoT opportunity is viewed by the industry as significant and multi-dimensional in the long run (5-10 year horizon) the current business cases are very questionable and require substantial upfront investment in infrastructure with very limited short term returns.

As per above, the required upfront investment for exploiting narrow bands such as 800 MHz amounts to tens of millions of euros. The amount of purchasing the spectrum is only the initial part of the investment and, considering the benchmark European prices for 800 MHz, it varies between 5-6 million Euros for 2x10 MHz.

On top of this amount, the rolling out and deployment of new technologies to support industries such as agriculture, health care, manufacturing, energy & utilities, etc., require and additional investment of more than 20 million Euros.
Given the level of upfront investment needed (spectrum + infrastructure), coupled with the recent hostile and uncertain regulatory environment (where severe and disproportional measures are being introduced in the market by distorting competition, in contradiction with the European regulatory framework), Vodafone cannot possibly consider to participate in this spectrum auction.

VODAFONE ALBANIA