BUCHAREST, Romania-Eastern and Central European countries began to improve and modernize their telecommunications networks more than a decade ago, after the fall of communism.
A great deal of work needed to be done. According to a report from Frost & Sullivan, teledensity in some of the sparsely populated rural areas did not reach 1 percent in 1989.
The solutions used to build and improve the networks in the region, including copper cable and fiber optics, were expensive. Beginning in the mid-1990s, some local authorities considered wireless local loop (WLL) as a solution, because it was more accessible and less expensive than other options for some areas.
Europe’s WLL market is delimited by the west and the east, with a well-established copper network and high teledensity characterizing the western market.
According to Peter Moss, senior product manager, AirLoop WLL for Lucent Technologies, the economics of using WLL are strongly dependent on the policy of a country’s regulator. In Western European countries, the governmental policies are to encourage competition for providing telecom services. Regulators tend to focus on “leveling the playing fields” to the benefit of competing operators.
“The policy of `unbundling’ the local loop makes use of existing copper relatively attractive, provided the competing companies can access it,” said Moss.
Eastern European markets have different priorities than their western counterparts. Existing networks in Eastern Europe are usually old and in poor condition, making them unsuitable for data traffic, and the region’s teledensity is low. Governments encourage competition to stimulate the provision of basic telephone services to households and businesses. Licenses are granted to operators on condition they will provide “last-mile” connections to subscribers. Copper networks, in addition to cable or WLL technology, can provide these last-mile connections.
The majority of old WLL systems use analog transmission systems in the 150 MHz band or 400 MHz band. Today, WLL systems use bands from 3 GHz to 20 GHz, depending on the licenses and regulatory authority of each country. Countries such as the Czech Republic and Hungary are beginning to allow more frequency bands for fixed wireless access (FWA).
Zdenek Voparil, director of the International Relations Department of the Czech Telecommunications Office, said cordless, cellular and WLL technologies currently operating in the 800 MHz band must terminate operations by 2003. Three main frequency bands-3.41-3.6 GHz (3.5 GHz), 26 GHz and 28 GHz-have been designated for WLL applications in the Czech Republic.
In the 3.5 GHz band, certain portions are already assigned in the Czech Republic. As the spectrum available in the remaining part of the band is not sufficient to satisfy recently received applications, license tenders will solve the situation. Regulatory preparations for this action, which will start within two months, are in progress. No additional details were available at press time.
At 26 GHz, The Czech Telecommunications Office recently granted three FWA licenses to the following companies: Broad-Net, StarOne/Gity and Nextra Wireless.
In the 28 MHz band, a license tender is planned to take place within a year.
In Hungary, the situation is somewhat different. “The local, long-distance and international telephone services are covered by concession agreements, providing exclusive rights for the concessionaires until the end of 2001,” said Dr. A. Somogyi, director, International Organization Communication Authority for Hungary, based in Budapest. “Therefore, only the concessionaires may use WLL in telephony for substituting fixed lines. As far as data transmission is concerned, the licensed service providers may also use WLL.”
Some industry insiders have said WLL can constitute a threat to mobile telecom players in the European market. However, in Eastern Europe, mobile operators have provided the lion’s share of voice applications in recent years, but wireline operators, which own the majority of WLL systems, rule the data/Internet traffic market.
“WLL is not seen as a threat to the mobile market, but it can definitely be a threat to the wireline market, especially in Western Europe,” said Zeta Tsatsani, with the Ovum consultancy based in London. “In Western Europe, competition levels are quite lower, at least for the moment, and the main competitors to wireline markets are still mobile operators.”
The technologies used for WLL systems in the region are different and depend on the operator and supplier. The main technologies used for WLL networks in Eastern Europe are CDMA and DECT.
According to a Frost & Sullivan report, the total estimated WLL market for Central and Eastern Europe was US$174 million in 1999, and the turnover will climb to US$2.2 billion by 2006.
Narrowband WLL offers an ideal solution for incumbent operators to meet customer demand in rural and urban areas. WLL technology is especially effective in large regions, particularly in the northern areas of Russia’s Siberian taiga, where wireline networks are hard to build. In urban areas, WLL is a solution especially suited for city centers where copper or fiber networks are hard to build and develop. In addition, newly developed neighborhoods surrounding cities can be connected through WLL communications networks.
Most operators in the region use network infrastructure from Ericsson, Lucent, Alcatel and Israel’s InnoWave ECI. In the Russian regions, network infrastructure is also built with equipment from Samsung and LG Information & Communications.
Lucent has implemented its AirLoop WLL system in Russia, Romania and extensively in Poland. In principle, the system provides a standard telephone line to the end user by means of a CDMA radio link. The service can also provide full 2B+D ISDN, and Lucent is developing a packet data service, which offers higher data speeds with less system resources for access to the Internet.
Investors in the region face the monetary devaluation and inflation of local markets, which influence WLL development. Because of the fact most equipment and infrastructure are acquired in Western currency and the prices to develop such networks are high, almost all countries appeal to financial institutions, such as the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB), for loans.
