SmarTone CEO disses auctions but looks forward to nomadic 4G

John C. Tanner
21 Jul 2009

LTE spectrum auctions are a "government rip-off", app stores are useless for cellcos and fixed-mobile number portability "doesn't make sense", according to SmarTone-Vodafone's top execs.

SmarTone-Vodafone chief executive Douglas Li defended his company's decision to refarm existing 2G and 3G spectrum - and purchase additional 1800-MHz spectrum - for LTE rather than bid for spectrum in the 2.5-2.6 GHz band, saying there was no benefit in acquiring more high-frequency spectrum.

"The coverage is worse, especially indoors, and it's cheaper to use spectrum you already have," Li said in an exclusive interview with "Selling more spectrum at higher bands is really a government rip-off."

Li qualified the remark, adding: "To call it a rip-off is probably a little strong. After all, you can always refuse to stump up the money like we did. So you can't really blame the government if you pay anyway."

SmarTone-Vodafone CTO Stephen Chau added that the company was looking at ways to use MIMO in existing bands to boost capacity rather than 64QAM, which is used in HSPA+.

"The trouble with 64QAM is that it needs very good line-of-sight to get the full benefit, and in Hong Kong, because of all the high-rise buildings, that's almost impossible," said Chau.

Rival cellco CSL deployed 64QAM-based HSPA+ earlier this year.

Chau said MIMO tests so far have been "positive", but that more work needed to be done. "We know we can get around 25 Mbps - the question is how often we can hit those levels."

Li said he hopes to start deploying MIMO capabilities in the network by Q2 next year.

In a wide-ranging interview, Li also said that the mobile broadband case in Hong Kong was largely based on nomadic connectivity rather than full mobility, which is one of the reasons SmarTone launched its HSPA-based fixed-wireless broadband/home phone service in May.

"Most mobile broadband access in Hong Kong will be while the user is stationary anyway," he said. "I've never seen anyone use a laptop on a bus or the train."

But while the company is looking for ways to add value to users, an app-store approach being considered by other cellcos - including Vodafone - may not work in Hong Kong, he said.

"App stores are really tied to the OS, so there's really no role for the operator there," he said. "Even if there is one, the volumes in Hong Kong wouldn't be that high overall, and we only have so much market share."

Meanwhile, Chau weighed in on last week's announcement by regulator OFTA to allow for voluntary number portability between mobile and fixed-line carriers, saying it's a costly scheme for which there's little demand to start with.

"Some customers prefer to separate the fixed number range from mobile," he said. "So it doesn't make sense for the industry - fixed and mobile - to incur huge cost and effort to implement full porting capability."

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