Quality of services in mobile telecom: Challenges and way forward

While acknowledging 70 percent improvement in country-wide mobile internet speed over the last one year, OOKLA SpeedtestGlobal Index (1) released in Dec 2023 has ranked Bangladesh 101st in terms of speed. When we consider global Mobile Internet speed which has improved by 30 percent (2) throughout 2023, there is good reason to feel disappointed to find Bangladesh languishing at the 101st place in the table. So, how come even after outperforming the rest of the world by a long margin, we find ourselves at the bottom of the pile! Let’s take a deep dive into the ranking to get a better picture.

How did mobile internet speed improve by 70 percent in 2023 in Bangladesh?

Aggressive data network capacity expansion by MNOs over 2300/2600 MHz band all through 2023 was the main driver behind this phenomenal improvement in country-wide mobile internet speed. This was largely facilitated by the regulator when they allocated 190 MHz of spectrum in the mid bands to all four MNOs in the local market through an auction held in Mar 2022. On the other hand, the improvement in mobile internet speed observed in the rest of the world was largely driven by 5G penetration.

SPEED RANKING VS SPECTRUM HOLDINGS

When we carefully study the top 15 countries in the ranking, the first thing that stands out is the profile of spectrum holdings. In general, on average, each country has released approximately 1 GHz of spectrum in low and mid band range (3) from 8 different bands. Bangladesh, on the contrary, allocated 503 MHz of spectrum (equivalent unpaired) from 5 bands for Mobile services. In this connection, it is worth noting that the industry experts strongly recommend securing a minimum 1 GHz of spectrum in low/mid band to be able to give a taste of true Mobile Broadband.

Let’s change the perspective of the study by analysing the spectrum allocation profile of the countries having similar market size (taking population into consideration) to Bangladesh4. On average, each country has allocated approx. 800 MHz of spectrum from 8 bands. Average speed ranking for the study group is 60 (5). Therefore, it is abundantly clear that allocating sufficient spectrum and ensuring its optimum utilisation are the key factors to ensure reasonable mobile internet experience. However, it is important to acknowledge that an impactful spectrum allocation is a comprehensive process involving careful consideration of timing, amount, roadmap and above all pricing of the allocated spectrum.

It is recommended to release spectrum to the market as soon as there is a business case for the operators to use it. From an empirical study, a delay of two years to launch services resulted in 11 – 16 percentage point lower (6) 4G population coverage (on average). Not just the limited coverage, limiting the supply of spectrum comes with great risk in terms of customer experience. On an average, every 20 MHz of additional spectrum results in 15 percent increase in download speed (7).

SPECTRUM PRICING

Spectrum Pricing:

According to the study by GSMA, the final spectrum prices in developing countries (Bangladesh included) were, on an average, more than three times those in developed countries, once the differences in income per capita are taken into account (8). In case of reserve prices, it was five times with similar modality. With regards to the reserve and final price following the auction process, it has been found that the ratio is higher in the developing countries, which is 0.8, compared to the 0.6 of developed countries (9). Higher ratio means the auction outcome was predominantly driven by reserve price. It is commonly observed that higher spectrum cost leads to negative customer experience in the form of slower data speed, substandard coverage and slowed down rollout by restricting MNO’s ability to further spend on network.

SPECTRUM ALLOCATION: BANGLADESH PERSPECTIVE

Bangladesh concluded three spectrum auctions for mobile services in 2018, 2021 and 2022. The auction held in Feb 2018 was the most significant one as it paved the way for the introduction of 4G licence with 2x25 MHz in 2100 band, 2x18 MHz in 1800 band and 2x3.4 MHz in 900 band on the auction table.

However, the reserve price of $30mn per MHz for 900/1800 band and $27 million per MHz for 2100 band considered by the market to be extremely high resulted in two thirds of the spectrum available for auction remaining unsold. When adjusted against GDP per capita, these prices were almost three times the Asia Pacific average final prices over 2000 – 2017 (10).

In March 2021, Bangladesh launched an auction process to assign 2x7.4 MHz in 1800 band, 2x20 MHz in 2100 band. The last 2x5 MHz block from the 2100 band was finally sold for$46.75 million per MHz against the reserve price of $27 million. This clearly shows how competition over scarce available spectrum ends up taking the price to an abnormally high level. Finally, the last auction was held in Mar 2022 where two new bands – 2300 and 2600 were introduced for the first time, 30 MHz spectrum remained unsold from the 2300 band.

GLOBAL BEST REGULATORY PRACTICES

There is unanimous agreement among the industry experts the world over that policymakers should prioritise improved and affordable mobile broadband services over state revenue maximisation when awarding spectrum. It is strongly recommended that reserve price is set at a modest level andallow the market to determine the final price.

In terms of what to avoid, limiting supply of spectrum should be avoided at any cost. Also, it really helps the industry to strategize its long-term investment plan for a country if the regulator publishes its long-term spectrum awarding plan well in advance (next 3- 5 years).

We cannot deny the fact that the MNOs are struggling with almost flat ARPU and average growth in industry. In this backdrop, deviation from best practices that leaves the spectrum price hiking unreasonably will further aggravate concerns on sustainability of the telecom business.

It should be noted that there is no single best practice to estimate the value of spectrum and the global benchmarks should be used with care. Nevertheless, this has become quite evident from global reference that at least 1 GHz of spectrum in low/mid bandshould be made available to the operators through a reasonable pricing model to ensure quality mobile internet experience and a respectable standing in the ranking table.

EFFICIENT USE OF SPECTRUM

Once the spectrum is released, it is important to have good management in place to ensure efficient utilisation of spectrum. In this connection, it’s worth noting that co-existence of proximity bands’ operation is critical for customer experience.Moreover, in Bangladesh, there is a challenge to manage radio network quality and therefore customer experience due to the illegal use of licensed spectrum, (RF repeater, booster etc. installed by the customers themselves) especially in dense urban area.

CHALLENGES IN ACQUIRING SPACE FOR TELECOM TOWERS IN BANGLADESH

There are instances where customers live in areas that are not covered by the telecom network due to the absence of cell sites. Challenges in acquiring sites or finding a sustainable business case in remote areas are the major reasons in this regard. On many occasions, MNOs have found it difficult to secure sites for setting up telecom tower due to the prevalence of fear from EMF radiation in the society, which by the way has no scientific grounding as confirmed by the World Health Organization (WHO) and the International Commission on Non-Ionizing Radiation Protection or ICNIRP (11). The regulator together with stakeholders should work closely to address such fears among people through robust awareness campaigns by engaging the media and the academia.PROMOTING ACTIVE/PASSIVE INFRA SHARING

Setting up an in-building solution (IBS) to address indoor coverage in certain cases is a critical and probably the only available solution to strengthen the network. However, it’s worth noting that IBS is approx. five times more expensive but generate an insignificant amount of revenue compared to a regular site. In this backdrop, the regulator in collaboration with stakeholders should promote both passive/active infra sharing which could serve customer interest better.

Ensure reliable power supply:

Operation of mobile cell sites heavily depends on reliable commercial power. On an average, 60 percent of the total service interruption recorded by the MNOs is linked with power outage. Recently, some improvement in power management in urban areas has been observed. However, the situation in rural and remote areas is yet to catch up. As of now, quality of commercial power in approximately 30 percent of the area where MNOs are serving is not conducive to ensure quality mobile service (12). It is an irrefutable fact that unreliable commercial power supply severely impacts customer experience and creates stress on MNOs cost structure.  ROBUST FIBRE OPTIC NETWORK

Optical fibre is an integral part of the mobile network transmission system. On average, 20% - 25% of total service interruption is contributed by fibre. Since a significant portion of fibre is hanging overhead, it is exposed to all sorts of vulnerabilities. In addition, over the last few years, the fibre cut increased significantly because of massive civil works project undertaken by the Government. Considering the huge impact fibre optic cable network has on customer experience, the fibre service provider and the regulator should work closely with stakeholders to ensure robust fibre across the country. In addition, fibre cables should be declared as basic utility to ensure adequate protection during development works. 

CHANNELLING VOICE TRAFFIC THROUGH IP NETWORK It is very encouraging to observe that the basic performance indicator of voice services like accessibility, drop call and voice quality are gaining momentum. This is happening as legacy voice traffic (Circuit Switched voice over 2G/3G) is declining organically, which leaves the mobile operators in a better position to refarm spectrum for relatively efficient technologies and thereby optimise spectral load by channelling voice traffic through IP network (VoLTE). It is imperative that the Regulator together with the industry stakeholders devise suitable policy to encourage VoLTE capability in devices from the current 50 percent approximate rate. 

Conclusion:

Mobile telecom business encompasses an ecosystem that involves core network components, resources utilised, supporting infrastructure down to customer devices and many others. The concept of managing mobile service quality is thus versatile and complicated. Ensuring quality of services in line with the industry standard and customers’ expectation is one of the core tasks in telecom business. 

However, it should be noted that there are many stakeholders other than the MNOs that contribute to the quality of services(QoS) experienced at the customers’ end. Singling out MNOs for all shortcomings in QoS is grossly unfair. MNOs alone cannot ensure a fool-proof network. Policymakers, Regulatorand the entire set of stakeholders, including the ecosystem partners, have to join hands to make sure we have customers happy with the QoS they experience.

 [Syed Md Samshur Rahman is a seasoned telecom professional with more than 25 years of experience in strategy, business plan and network design. He is currently working as Executive Vice President (EVP), Technology Planning in Robi Axiata Limited.]

References

1. https://www.speedtest.net/global-index

2. https://www.speedtest.net/global-index

3. Low Band: less than 1 GHz, Mid Band: 1 – 7 GHz

4. Mexico, Brazil, Philippine, Egypt, Thailand, Malaysia, Japan, Nigeria, Turkey, Germany

5. https://www.speedtest.net/global-index (excluding outliers; Egypt and Mexico)

6. https://data.gsmaintelligence.com/signin?returnPath=%2Fdata > The Impact of Spectrum Prices on Consumers, Sep 2019

7. https://data.gsmaintelligence.com/signin?returnPath=%2Fdata > The Impact of Spectrum Prices on Consumers, Sep 2019

8. https://data.gsmaintelligence.com/signin?returnPath=%2Fdata > Spectrum Pricing in Developing Countries, Jul 2018

9. https://data.gsmaintelligence.com/signin?returnPath=%2Fdata > Spectrum Pricing in Developing Countries, Jul 2018

10. https://data.gsmaintelligence.com/signin?returnPath=%2Fdata > Spectrum Pricing in Developing Countries, Jul 2018

11. https://www.icnirp.org/en/activities/news/news-article/rf-guidelines-2020-published.html

12. MNOs operational data & analytics.