Wireless market rules relaxed to promote growth

Reding: changes will enhance accessibility of multimedia services

The European Commission is opening up the wireless technology market by discarding out-dated rules limiting the areas of available radio spectrum.

Next-generation wireless technologies such as BlackBerrys and smartphones work best over low frequencies that, until now, were reserved for GSM mobile phones. According to a statement last week, the Commission will allow new services to co-exist alongside GSM.

The aim is to establish a more flexible, market-driven approach to spectrum management, says European Union telecoms commissioner Viviane Reding.

‘The changes will increase competition in the use of spectrum bands and enhance accessibility of Europeans to multimedia services,’ she said.

The scrapping of the 1987 GSM Directive is part of efforts to heighten interest in the spectrum auctions across Europe over the next three years.

The wireless internet services that will use the new spectrum are a huge growth area. Analyst Gartner published predictions last week that the mobile email market alone, which currently has fewer than 20 million business users worldwide, will surge to 350 million users by 2010.

Getting the regulatory environment right will be crucial to the growth of suppliers and the multimedia services that they provide. Such success is a priority for the European Commission in light of the 2010 objectives for boosting the region’s global economic competitiveness.

Wireless frequency auctions are also under way in the US, and competition issues are already arising.

Last month Google announced a possible bid of $4.6bn (£2.2bn), on the condition that the US Federal Communications Commission ensures the winning bidder acts as a wholesaler.

Google’s concern is that a single broadband carrier that is not obliged to sell access to others could hold a monopoly. The result could be competitors charged for access, and an end to net neutrality.

‘Google would be crazy to become a wireless carrier,’ said Jan Dawson, analyst at Ovum.

‘The potential bid is about Google creating its own channel for customers to access its services, just in case they are blocked by other carriers.’

The search firm is less likely to show an interest in the UK auctions because of regulator Ofcom’s different approach, says Stephen Hearnden, director of communications for technology trade group Intellect.

‘Ofcom parcels up the spectrum in many ways to maximise competition,’ he said.