LIME Jamaica makes big bet on AWS spectrum
The new 15-year licences and spectrum acquired by the top two mobile phone providers will position both to deploy fourth-generation broadband services at higher speed, but LIME Jamaica has chosen to buy spectrum at a higher frequency.
Both companies plan to eventually deploy Long Term Evolution or LTE services, but via different platforms.
Digicel Jamaica acquired spectrum on the 700 megahertz band, while LIME's Managing Director Garfield Sinclair said his company chose to acquire two blocks on the 1700 to 2100 MHz frequency, a range otherwise referred to as Advanced Wireless Services (AWS) spectrum.
Specifically, LIME bought the 1710-1722 Mhz and 2110-2122 MHz frequencies, Sinclair said, with an eye on cost.
The AWS spectrum is "going to provide us with maximum cost efficiency," he told the Financial Gleaner.
LIME Jamaica has struggled financially over several years, but is now back to operating profit, but its bottom line remains in the red due to indebtedness. And, its customer base is reportedly tracking at around 700,000, or just over a third of rival Digicel.
The spectrum acquisition will allow for the immediate expansion of its 4G mobile broadband network, and eventual transition to a LTE network via the AWS spectrum, LIME said last week.
Still, there appears to be some confusion, or lack of communication, among the actors.
The Spectrum Management Authority (SMA) told the Financial Gleaner that it has issued no AWS licences, however, Sinclair said LIME has its licence in hand issued by Technology Minister Phillip Paulwell.
AWS is seen as a less efficient spectrum for delivering LTE services, because it needs three times the cell tower coverage to deliver the same levels of penetration as a single tower transmitting on the 700 MHz band. The signal also penetrates buildings less effectively and would likely require additional capital outlay in support infrastructure such as 'in-building' cell site - also called picocell - "for reliable operation," said SMA.
Sinclair justified the business decision, however, saying LIME already had a network of "about 600 towers" and won't need to develop that much more to deliver near full coverage of the island.
"All of the major, and even some minor populations and households can avail themselves of 4G," said the telecoms executive.
"We're going to be vastly superior to what we have today."
LIME has identified 11 new sites on which to erect towers, but Sinclair said he could not immediately recall the actual number of towers to be erected.
Digicel Jamaica bought one of three 700 MHz spectrums on offer for US$25 million, and paid out US$85 million overall for the spectrum and its licences, CEO Barry O'Brien said Wednesday at a JEF forum. Digicel said Thursday that it has 790 cell sites, 418 of which are already 4G-enabled. Another 187 are being upgraded to 4G.
LIME Jamaica invested US$30 million (J$3.25 billion) to secure a new 15-year operating licence and the additional high-speed mobile data spectrum, but would not say how much of that total was for AWS.
"We paid a global sum for the renewal of existing licences, including AWS," said Elon Parkinson, corporate communications manager for LIME.
The licences are included in the US$79 million (J$8.7b) 4G expansion programme that Sinclair said would last 18 to 24 months.
The plan is being financed by LIME's parent company, Cable & Wireless Communications Plc, to which the Jamaican telecoms is already in hock for $34 billion at last estimate in December.
LIME began to execute the 4G plan last December.
The company has signalled that its decision to invest in AWS, which is virtually unknown to Jamaica, could make it vulnerable to attacks from rivals.
In fact, Digicel appeared to have fired the first salvo last week in a press release.
"This is the only LTE licence to be granted to an operator in Jamaica," said Digicel, Jamaica's No. 1 mobile service provider, after the spectrum acquisition and licence renewals were announced.
LTE can be deployed in several bands.
"In general, a single cell site operating at a lower frequency band - example 700/800/900 MHz - can serve customers over an area of approximately 800 square miles while three cell sites are needed to operate at a high-frequency band - example 1800/1900 MHz) for the same 800 square miles," the SMA said in response to Financial Gleaner queries.
The higher frequency "will work as well as a properly built 700/800/900 MHz system, but it will cost significantly more to deploy and operate," the agency said.
Apart from Digicel's licence, other bands suitable for 4G and currently available for licensing are 700 MHz, 1800 MHz, 1900 MHz and 2.5/2.6 GHz spectrum.
"At present, no spectrum in the AWS band has been licensed," said SMA. However: "Consideration is also being given to making frequencies in the 1700/2100 MHz band (AWS-3) available for licensing," the agency said.