According to a new report from Australian Mobile Telecommunications Association (AMTA) delays in the commercial launch of LTE will place increasing pressure on capacity and increase costs as operators seek to implement strategies for managing expected traffic loads. 

This may have the effect of reductions in service quality, and higher prices, which may constrain demand and usage, and thus also the anticipated economic benefits.

The report 2.5GHz in Australia: The future deployment of mobile broadband services, was undertaken by Network Strategies and examines the links between mobile broadband, productivity and the role of new spectrum in 700MHz (Digital Dividend) and 2.5GHz bands.

“We estimated gross productivity benefits for mobile broadband over the period 2013 to 2020 to be around $143 billion,” says the report.

“Realisation of this potential will require the availability of sufficient spectrum in appropriate bands to deliver both coverage and capacity for the addressable market.”

It estimated that by 2020 there will be almost 20 million mobile broadband subscriptions on handsets together with another 6.3 million datacards (under a moderate growth scenario). The strong growth in mobile traffic would reach 1360 million Gigabytes by 2014.

 The Network Strategies report also estimates the gross productivity benefits from the two new spectrum bands - a 700MHz/2.5GHz combination - to be in the region of $62 billion over the period 2013 to 2020.

 The report assumes the commercial launch of latest generation networks using Long-Term Evolution (LTE) technology over 2.5GHz occurs in 2013 with LTE over 700MHz available one year later in 2014.

 It says a combination of high frequency (above 2GHz) and low frequency (below 1GHz) bands is viewed as the optimal solution for mobile network deployment with the low-frequency band providing coverage and the high-frequency band providing infill capacity.

 â€œThe timetable for the availability of spectrum in both the 2.5GHz and 700MHz bands is still uncertain, which may result in our assumed 2013 deployment for LTE being too optimistic,” it says.

 â€œWithout sufficient spectrum in appropriate bands to deliver both coverage and capacity for the addressable market, Australians will not reap the full economic benefits of mobile broadband,” it says.

AMTA Chief Executive Officer, Chris Althaus, said the peak industry body was working closely with its members and the Government on the key spectrum policy issues against a background of unprecedented growth in mobile broadband demand.

 â€œThese new reports point to the external links between productivity from mobile broadband, industry’s need for certainty of access to spectrum resources and meeting consumer demand for mobile broadband services,” he said.