COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 15.10.1997 
COM(97) 513 final 
COMMUNICATION FROM THE COMMISSION 
TO THE COUNCIL, THE EUROPEAN PARLIAMENT, 
THE ECONOMIC AND SOCIAL COMMITTEE 
AND THE COMMITTEE OF THE REGIONS 
STRATEGY AND POLICY ORIENTATIONS WITH REGARD TO 
THE FURTHER DEVELOPMENT OF MOBILE AND WIRELESS 
COMMUNICATIONS (UMTS) 
OUTCOME OF THE PUBLIC CONSULTATION AND PROPOSALS FOR 
CREATING A FAVOURABLE ENVIRONMENT 

SUMMARY 
The development of the telecommunications market is driven forward at a great speed, in 
part by the liberalisation of the telecommunications sector in major parts of the world and 
in part by the advances in technology in areas such as information processing and multi­
media communications over the Internet Protocol. 
Two main trends will prevail over the years ahead: the rapid Internet expansion and the 
huge growth of mobile and cordless terminals. This development is not confined to 
Europe but takes on a global dimension and will lay the foundation for a global 
Information Society without frontiers where information is stored and communicated 
electronically. 
A great opportunity exists for the mobile communications industry to foster that 
development by its ability to provide easy and ubiquitous access. Mobile 
communications offers everyone the ability to make phone calls, receive faxes, check e-
mail or use the Internet whilst on the move. 
The huge potential for expansion that this market holds explains the rapidly growing 
interests of industries world-wide in the standardisation process for next generation 
mobile communications in the ITU (under the name IMT-2000). In Europe, these 
developments take place under the umbrella of UMTS (the Universal Mobile 
Telecommunications System) and are driven forward by the UMTS Forum and ETSI. 
But also other parts of the world have woken up after the success of GSM1. Japan is 
preparing for a mass consumer market, a market where Japanese industry traditionally 
has strength, and industry momentum is building up. In the USA, new satellite based 
concepts are being developed (e.g. the Teledesic) whilst CDMA is heavily promoted by 
its industry as an alternative and competitive radio access technology for terrestrial 
mobile cellular communications. 
The European market of the year 2005 is expected to represent over 100 BECU of annual 
revenues and some 200 million subscribers. The global market is anticipated to grow even 
faster, in particular in Asia. This means that any development in Europe in that area must 
take into account the global nature of this market. To that end, a strong home market 
would seem to provide the best conditions for European industry to compete in other parts 
of the world. 
In order to set out strategy and policy orientations for Europe in this important but also 
very complex growth sector, the Commission issued a Communication2 in which it 
The success of GSM is generally attributed to the fact that it was an open standard and provided full 
cross border roaming functionality. GSM has become the de-facto world standard for mobile 
communications with now close to 250 operators operating or building a network, the majority of 
them outside Europe. It is estimated that the total investment in GSM infrastructure will exceed 100 
B$ by the turn of the century. GSM has delivered a great net export result for Europe and created a lot 
of new employment within the industry. 
requested responses from Member States and sector players to a number of key questions 
related to the further development of mobile and wireless communications in Europe. 
This Communication provides a synthesis of the comments and contributions that were 
received. In particular, clarification of the licensing regime that will be used for granting 
UMTS licenses and certainty that radio frequency spectrum will be made available in 
good time were seen as critical areas where action by authorities is required as a matter of 
urgency. There was an almost unanimous view of Member States and industry that this 
would create favourable conditions for the development of UMTS and thus help preserve 
the competitiveness of European industry. At the same time, Member States and operators 
felt that it would be necessary to secure basic customer interests such as Europe-wide 
roaming for mobile multi-media services on the basis of a common, open and 
internationally competitive air-interface standard in order that the European citizens can 
benefit from the "wireless Information Society" without frontiers as they can do today 
with voice using GSM. 
On the basis of the responses received, the Commission sets out action lines for creating a 
favourable environment for the further development of this sector. These action lines are 
summarised in the table below: 
Action Plan for the Community: 
action by 
WRC-97: preparationôfagenda WRC-99 Oct.97 
(to include UMTS spectrum allocation) 
Council Resolution on present Communication Dec.97 
setting out the political priorities 
Proposal of a UMTS Decision on spectrum and Jan. 98 
licensing conditions 
Implementation of 5th Framework Programme for 98 
Research and Development 
Adoption of UMTS Decision early 99 
Mandate to ERC on further spectrum allocation Feb. 99 
MRA negotiations continuous 
WRC-99: extension of UMTS spectrum allocation Oct.99 
Review of telecommunication regulatory end 99 
environment 
I 
This Communication is intended to present strategy and policy orientations for the 
development of third generation mobile communications (UMTS) to the European 
Parliament and the Council; the Economic and Social Committee and the Committee of 
the Regions. It responds to the specific call from the Council and the European Parliament 
following the Mobile Green Paper3 for additional action to ensure a continuing support for 
the evolution towards third generation mobile communications. 
im TABLE OF CONTENTS 
SUMMARY 2 
TABLE OF CONTENTS 4 
1. INTRODUCTION 5 
2. INDUSTRY AND ADMINISTRATION VIEWS ON THE FURTHER 
DEVELOPMENT OF MOBILE AND WIRELESS COMMUNICATIONS 8 
2.1. Main lines of comments on core issues 8 
2.2. Comments on key regulatory issues 11 
3. COMMISSION ASSESSMENT 17 
3.1. Areas of consensus 17 
3.2. Issues for further discussion 18 
4. ORIENTATIONS FOR PUBLIC POLICY 19 
4.1. Policy objectives 19 
4.2. Recommendations for further action 20 
4.3. Proposed targets, action plan and timing 26 
5. CONCLUONS REMARKS 27 
ANNEX I: IIST OF CONTWBMTORS TO THE CONSULTATION 28 
ANNEX SI: LIST OF ACRONYMS 29 
i. INTRODUCTION 
The Commission's Communication on the further development of mobile and wireless 
communications2 was published on 29 May 1997. It presented an overview of 
developments in mobile and wireless communications within the European Community 
since the 1994 Green Paper on mobile and personal communications3 and examined the 
future direction of mobile and wireless communications. In particular, it invited 
comments on a number of core issues linked to the further development of mobile and 
wireless systems: 
« Is this the right moment to define a strategy for the introduction of the Universal 
Mobile Telecommunications System (UMTS) or would regulatory action today be 
premature? 
« Is there a consensus in Europe on the notion of UMTS or third generation mobile 
communications? Will it be a new single technology, or a number of interoperable 
solutions based on different technologies ? 
• What should be the respective roles of the private sector and of public authorities in 
the transition towards UMTS? 
• How can UMTS impact on the competitiveness of Europe's industry? 
® How do we ensure that the broader social and societal interests are secured in the 
development of the "wireless information society"? 
Additionally, the Communication invited comments on the need, if any, for action by 
governments, the European institutions or other regional or global bodies. The 
Communication asked for responses by 15 July 1997. However, this period was extended 
into September at the request of the Telecoms Council at its meeting of 27 June. More 
than 50 written comments were received (see Annex I for list of contributors)4 from 
télécoms operators, equipment manufacturers and from Member States. Comments from 
business and user interests were limited to a comment from a national user association 
and from UNICE. 
Since the publication of the Communication, a number of developments can be 
highlighted which reveal a rapid evolution of the UMTS debate and confirm the 
timeliness of the consultation launched by the Communication of last May: 
• In July 1997, the UMTS Forum5 produced its first report on a "Regulatory Framework 
for UMTS"6. The report examines those political and regulatory actions which are 
Communication to the European Parliament, the Council, the Social and Economic Committee and the 
Committee of the Regions on the further development of mobile and wireless communications -
Challenges and choices for the European Union - COM(97) 217 final, 29.05.97 
Green Paper on a common approach to mobile and personal communications in the European Union, 
COM(94) 145 final, 27.04.94 " 
Copies of the comments are available on request (to be sent to umts@dgl3.cec.be or by fax to 
Secretariat, DGXIII / AID, +32-2-2968395) 
The UMTS Forum counts now about Î00 members. Memberships includes all major European 
manufacturers and mobile communications operators. The Administrations of France, Germany and 
the UK are also a member of the Forum. 
5 
considered essential for the successful development of UMTS, as well as the following 
timetable for such actions. 
MAJOR MILESTONES FOR THE DEVELOPMENT AND INTRODUCTION OF UMTS 
AS PROPOSED BY ETSI AND THE UMTS FORUM 
1 October 1997 ERC Decision on UMTS core band becomes effective; Member 
States expected to sign up for its implementation. 
31 December 1997 Plans for the licensing of UMTS and for the provision of adequate 
frequency spectrum must be clear in order to reduce the risks and 
uncertainties for industry 
First quarter 1998 Operators identified; drafting of licences commences. 
31 December 1999 Agreement by ETSI on UMTS Phase 1 standard. 
Early 2002 Start of commercial UMTS service. 
• The UK in a consultative document7 has become the first Member State to announce a 
timetable for granting several UMTS licences with a view to services starting in 2002. 
• Within ETSI, intensive discussion is taking place to reach a common understanding 
about the basic technical characteristics of UMTS, and a number of announcements 
have recently been made by some of the major actors in the European mobile 
manufacturing industry. 
• Internationally, there have been a number of announcements from industry and 
Governments concerning third generation systems, for example in the USA, Japan and 
Korea. Work in ÎTUIMT-20008 has provided a forum with wide global participation, 
whilst contacts between regional standardisation bodies have been established and are 
strengthening, particularly in areas related to the development of a single radio air-
interface. 
In preparing this Communication, the Commission has drawn conclusions from the 
public comments received in response to the May Communication, and from the Report 
of the UMTS Forum as well as other ongoing developments. 
The objective of the present Communication is to establish policy objectives in the areas 
of UMTS; to clarify how certain aspects of the current regulatory environment impact its 
A Regulatory Framework for UMTS, Report No. 1 from the UMTS Forum, 25 June 1997. It can made 
available by the secretariat of the Forum, Russell Square House, 1-12 Russell Square, London WC1B 
5EE, UK, fax +44 171 331 2040, e-mail umtsforum@fei.org.uk 
Multimedia communications on the move, a consultative document from the UK Department of Trade 
and Industry, 31 July 1997. 
IMT-2000 (International Mobile Telecommunications 2000) is the name designated by ITU-T (the 
Telecommunications sector) to the standardisation efforts for third generation mobile communications. 
The corresponding acronym FPLMTS (Future Public Land Mobile Telecommunications System) is up 
till today still used by ITU-R (the radio frequency sector) to designate the radio frequency spectrum 
allocated to third generation mobile communications. 
development and to propose further action in key areas, as well as a timetable for stfch 
steps. 
The Commusication proposes to confirm the commitment at Community level to 
ensuring an environment conducive to a successful preparation and implementation of 
UMTS. 
jp.'!aiK^,ja^*a^.^vffiBi^j|^^lTr,-wj 
2. • INDUSTRY AND ADMINISTRATION VIEWS ON THE FURTHER 
DEVELOPMENT OF MOBILE AND WIRELESS COMMUNICATIONS 
The launching of a debate within the European Union on the future strategy for UMTS 
was widely welcomed though it was clear that industry and Member States had different 
expectations for the process. Section 2.1 below is structured along the main lines of the 
comments that were received to the core issues identified in section 3.3 of the May 
Communication, whilst section 2.2 presents additional comments on the key regulatory 
issues raised in section 3.4 of the May Communication. 
2,1, Main lines of comments on core issues 
2,hl An overall strategy is urgently needed to provide regulatory certainty for UMTS 
Industry looked for the rapid development of a clear regulatory framework in the key 
areas, such as: the impact of competition rules on UMTS; the way licences would be 
issued and the conditions to be attached to them, and the future frequency allocations 
within the 2 GHz band. Lack of timely decisions on these issues will deter the sector 
actors to take the required investment decisions without which the further development of 
UMTS will be seriously compromised. 
Industry believes that an approach at European level is essential to maximise the 
opportunities for European players within the global market for third generation mobile 
communications9. With other technologies on the horizon (e.g. the development by 
Japanese and North American industry of new air interfaces), it was felt that Europe had a 
narrow window of opportunity in which to develop a clear and winning strategy. 
At the same time a number of comments pointed to the difficulty of taking decisions at a 
stage where UMTS has not been clearly defined in system terms and users had yet to 
indicate what level of demand there would be for the next generation of services. 
The European market for third generation mobile communications is a small part of the potential global 
market. The UMTS Forum forecast for the world-wide growth of mobile communications is shown in 
the table below. The North American and European markets are expected to reach saturation first as 
car. be seen in the table. But even in 2015, markets in Asia, Africa and South America are expected to 
be far from saturation, even without taking population growth into account. 
Customers in millions 
at year end 
EU 15 
North America 
Asia Pacific 
Rest of World 
Total 1995 
22 
36 
22 
7 
87 2000 
113 
127 
149 
37 
426 2005 
200 
190 
400 
150 
940 2010 
260 
220 
850 
400 
1730 2015 
300 
230 
1400 
800 
2730 
The key message from the Member States that responded to the consultation (see Annex 
I) was that the development of UMTS should be market-led with industry playing a 
predominant role. Regulators should not substitute themselves for market forces. As a 
result some Member States (United Kingdom, Finland and Germany) suggested that the 
combination of competition law and the Licensing Directive offered the necessary basic 
regulatory framework within which UMTS could be introduced. Beyond this, Member 
States generally supported industry in seeking further clarification with regard to the 
impact of competition rules, and with regard to how the Licensing Directive would apply 
to UMTS. 
The UK indicated that whilst it saw the possible need for additional regulation for UMTS, 
it questioned the need for those rules to be developed within a Community framework. 
France highlighted in this context the 1999 Telecoms Review which would adapt the 
télécoms regulatory framework, if required, in the light of two years of competition. 
2Js2^Ajdmr picture with rezardJalreauencies lies at the heart of the debate 
Member States attached importance to the current work within the ERC which had led to 
a Decision on UMTS bands10. At the same time, Finland and France both expressed 
concerns that should the ERC mechanism fail to produce timely and binding results, the 
European Community should consider adopting a Frequency Directive. 
Industry and the UMTS Forum also attached importance to the ERC s work as the basis 
for the management of the spectrum for UMTS/IMT-20Q0. Some industry comments, 
however, preferred the use of a binding Community measure to allocate frequency, 
together with a clear identification at a political level of Community priorities and 
objectives in relation to UMTS. 
Several respondents focused on how much fees companies would have to pay for 
spectrum and whether it would be allocated by auctions, with some comments arguing 
that high fees acted as a market barrier. 
2JJ The notion of third generation mobile communications 
A number of comments focused on the need for a migration strategy from existing second 
generation systems, so that a degree of backward compatibility would be guaranteed. In 
this regard, some comments highlighted the current evolution of the GSM standard, in 
particular the development of the General Packet Radio System (GPRS, as part of the 
GSM Phase 2 package, to support a limited form of mobile multimedia) as an important 
test bed for future developments. Many commentators argued that UMTS should 
constitute a multimedia evolution of GSM. 
10 ERC Decision on the frequency bands for the introduction of Universal Mobile Telecommunications 
Systems (UMTS), ERC/DEC/(97)07, 30 June 1997. CEPT Administrations had until 1 October 1997 
to sign up for the Decision. On that date, the following EU Administrations had committed themselves 
to implementing the Decision: Austria, Finland, Germany, the Netherlands, Portugal, Spain, UK. 
Furthermore, the following non-EU countries had signed up: Lithuania, Norway, Turkey. 
Several industry players and the Member States emphasised that ETSI provides the best 
platform for translating the notion of UMTS into key open standards and that technology 
choices should come from industry througrMie standardisation process in ETSI. 
The issue of whether or not existing fixed or mobile operators should be able to operate 
third generation systems was seen to raise competition issues. The UMTS Forum 
suggested that existing operators should not be excluded from bidding for UMTS 
licenses, because of the huge investment costs required for UMTS, whilst a number of 
GSM operators staked a claim to the automatic grant of UMTS licences, in order to allow 
users to benefit from their skills and experience. Member States considered that there 
should be neither an automatic granting of licenses to, nor an a priori exclusion of 
GSM/DCS operators. 
2JA The broader impact of UMTS on Europe's society and global competitiveness 
Industry presented UMTS as a test of Europe's ability to rise to the challenge of the 
communications markets in the next century and the development of a "wireless 
information society". Industry argued in this context that UMTS must offer nation-wide 
coverage within Member States and be priced at a level (both services and equipment) 
which reflected a mass consumer market rather than a premium business service. In this 
respect, it was argued that high valuations placed on spectrum would lead operators to 
focus on high profit business customers and could put European users and the industry at 
a serious disadvantage vis-a-vis other global players. 
To this end, UMTS was also perceived as having a direct impact on the competitiveness 
of Europe's economy as part of the fabric of advanced communications which was 
bringing down business costs. It could also play an important role in continuing the 
success of Europe's mobile communications industry, offering manufacturers and 
operators a strong home market from which to expand. This assessment was largely 
shared by Member States. Stress was placed on the fact that by developing products 
which responded to market demand and which competed successfully with other 
technologies, systems were likely to emerge which could compete on a world stage. 
In this respect, the UMTS Forum emphasised that the global potential of this market has 
two major implications, firstly that it is even more necessary to set regulatory and 
technological frameworks which will provide the greatest impetus to UMTS in Europe, 
and secondly that UMTS developments need to take into account trends in other parts of 
the world. Such trends include a greater use of wireless for all telecommunications 
services, particularly in emerging market. 
2.1.5 Other factors related to the take UP of UMTS 
Strong support was found for a Community co-ordinated research programme into the 
possible health effect of mobile phones. 
There were no calls for extending current concepts of universal service to include UMTS 
as a means of securing its wider deployment. 
Other issues were identified in the comments as being important for the take up of UMTS 
services, namely: security and encryption issues, the protection offered against fraudulent 
use, the need for adequate levels of privacy and protection of personal data, the protection 
10 
of intellectual property, the integration of UMTS in teleworking and teleteaching 
initiatives and access for the content industry. 
A range of initiatives are underway at a Community level in relation to these areas, 
therefore they are not considered further in this Communication. 
2.2. Comments on key regulatory issues | 
2<2J The regulatory framework f&r UMT& 
The development of UMTS should be market-led 
There is broad recognition that the private sector must take the lead and should design, 
build and deliver mobile and wireless multi-media services. Such action should be driven 
by market demand. Comments suggested that the role of public authorities was one of 
"political leadership", creating an appropriate regulatory environment through rales 
which promote innovation and flexibility. 
Many comments whilst emphasising the need for a predictable regulatory environment, 
confined calls for regulatory action to the issue of grant of licences for UMTS and the 
need for early frequency decisions, in order to avoid over-regulation. One manufacturer 
stated that Member States must set a global example by committing to early spectrum 
licenses. Emphasis was also placed on the need for rapid progress on a minimum degree 
of standardisation i.e. only the critical interfaces. A number of comments stressed the 
need for early decisions if Europe was not to be overtaken by developments in other parts 
of the World and if the current technological lead based on GSM was not to be 
squandered. 
A unique solution or interoperability and interconnection for competing technologies? 
Some comments highlighted the risks of multiple wideband air-interfaces, allowing users 
to be connected to a multi-media environment, undermining the objective of Europe-wide 
roaming and connectivity. This led for calls for action to be focused on ETSI and the 
UMTS Forum, in order to facilitate a single technological solution. Such a solution would 
minimise the risk of multiple standards being adopted or implemented in Europe, The 
importance of European standardisation efforts was stressed as a means of influencing 
global developments. 
Others stressed the need for competition, preferring work to focus on interoperability and 
interconnectivity rather than a single technology. Stress was also placed on the need for 
UMTS to allow operators to innovate and to use their technology of choice, reflecting a 
concern that over-specified standards tend to make businesses less flexible, preventing 
competition based on differences in products and sendees. In their view the current 
agreement on key characteristics of third generation systems was adequate for investment 
decisions and for the limited regulatory action required. Any-attempt to establish a 
consensus around a more detailed concept of UMTS was unrealistic, particularly if the 
aim was to develop a level of detail similar to that found within the GSM standard. This 
view was supported in particular by the UK and France. 
11 
On the issue of whether UMTS should be service- or technology orientated, the UK 
suggested that it should be technology based. The UMTS Forum report states that UMTS 
spectrum should be reserved for systems using UMTS as defined in standards adopted by 
ETSI. Flexibility of the UMTS standard as defined by ETSI would be an advantage. 
Several Member States and operators felt that open standards were needed to ensure that a 
variety of manufacturers will be able to supply equipment and that this equipment will be 
inter-operable. 
Roaming is a key regulatory issue for UMTS 
Roaming is considered by most of Member States and operators as a key issue for the 
successful take up of UMTS, particularly as it seeks to compete with current GSM 
networks. Concerns were expressed about the uncertain regulatory position today as to 
whether all aspects of roaming would be caught by the Community's Interconnection 
Directive. 
Some Member States take the view that third generation operators should be encouraged 
to enter into roaming agreements with each other, whilst others went further suggesting 
that legal measures to oblige UMTS operators to negotiate roaming arrangements where 
required, where this was not covered by the Interconnection Directive. 
The need for global as well as regional roaming was also highlighted in the context of 
ITU work on IMT-2000. 
The need for regulatory action to be co-ordinated at a European level 
The majority view supported the case for a clearer concept of UMTS to emerge as a pre­
requisite for action at the European level. Most Member States called for a co-ordinated 
approach with regard to the introduction of UMTS, on the basis of discussion at 
Community level and/or within the CEPT. This view is supported by several industry 
players who argue that the piecemeal issuing of licenses will create instability and that 
therefore licenses and spectrum should be made available in a co-ordinated manner. 
Stress was also placed on the need to ensure a solution which was consistent with IMT-
2000, so that global roaming could be ensured. Given that the available spectrum is 
limited, some Member States argued that UMTS should be constrained to a single 
technology, with possible legal requirements to support roaming, perhaps through an 
obligation established at a Community level. 
Role for public authorities to secure a broad competitive basis for UMTS 
Member States saw a clear role for action by public authorities in order to safeguard the 
general public interest by ensuring that regulatory environment did not hold back the 
development of a competitive environment offering a broad range of services. 
2.2.2 Frequency issues related to UMTS 
The issue of spectrum pricing 
Several industry contributors argued that high pricing of spectrum would distort the 
market and damage the uptake of UMTS services. Little support was expressed for the 
use of market mechanisms, in particular, auctions, since these tend to overprice spectrum, 
create uncertainty and undermine the development of a healthy industry. Some also felt 
12 
that auctions risked favouring the entry of non-European players into the European 
market place. On the other hand, some Member States consider that spectrum pricing 
should reflect its economic value. 
Estimates of how much spectrum is required 
Industry players argued that the 2 x 40 MHz currently designated by the ERC11 will prove 
to be insufficient for the needs of a competitive market place to start up. The UMTS 
Forum identified a minimum requirement of 2 x 40 MHz to be released now, together 
with another band of 20 MHz which will be needed for non-public, in-building, low 
mobility systems. In the longer term, the Forum considered current market forecasts 
justify a claim for the full 155 MHz identified for terrestrial mobile communications by 
WARC-92 to be available by the year 2005, with a further 185 MHz required for 
terrestrial services by the year 2010. It was suggested that steps should therefore be taken 
by the CEPT to place the subject of additional spectrum for IMT-2000 on the WRC-99 
agenda. 
Additionally, the ITU has identified 60 MHz for the satellite component of IMT-2000, 
with forecasts of a need for a further 30 MHz by the year 2010. 
The idea of sharing a common pool of spectrum was rejected by industry who argued that 
it would be a significant disincentive for operators, whilst others doubt whether it would 
be technically possible or indicated that it would create monopoly structures. 
In terms of the UMTS market, several comments stressed that the development of the 
UMTS market makes it necessary that sufficient spectrum is available to cover the needs 
of all operators seeking a license. This would also have an effect on the future 
development/evolution of the UMTS standard. 
When and how should decisions on spectrum be taken? 
The UMTS Forum called for a co-ordinated approach by all relevant authorities in Europe 
to ensure a timely approach to identifying, liberating and allocating UMTS spectrum. 
Nevertheless, some argue that the detailed planning of the spectrum can only be done at a 
later stage when a clearer picture of UMTS has emerged. 
2JJ Standardisation related questions 
General characteristics for UMTS 
In general terms there was agreement on some of the key service characteristics of 
UMTS. As a system it would have to represent an improvement over current mobile 
systems, for example, by offering extended coverage (preferably global), higher bit rates 
(to support multi-media), better spectral efficiency and greater flexibility for the 
customer, both in service offering and price. 
Some manufacturers suggest that UMTS is effectively mobile Internet. Other more 
traditional operators viewed UMTS as a means of achieving ISDN type sendees on a 
1 ' ERC Decision on the frequency bands for the introduction of Universal Mobile Telecommunications 
Systems (UMTS), ERC/DEC/(97)07, 30 June 1997 
13 
mobile platform and facilitating fixed-mobile convergence. Furthermore, a few comments 
drew links between UMTS and Digital Audio Broadcast (DAB) as well as TETRA. 
UMTS is likely to involve both an evolution of GSM and the development of a new air 
interface 
Several comments stressed that the path to UMTS is likely to involve both an evolution 
of the GSM backbone infrastructure for call control and mobility management and the 
development of a new radio air-interface supporting data rates up to 2 Mbits/s and multi­
media services12. 
Industry is apparently prepared to accept, given the significant investments in current 
mobile networks and the need for evolution, that at global level different regional systems 
will be developed supporting different air-interfaces. Consequently multi-mode terminals 
would be required for global roaming services. Some felt that that more complex 
multimode terminals would slow down the development of the market. 
Comments from current mobile operators stressed that GSM covers a spectrum of 
narrow-band services and that UMTS would be the natural complement, offering 
advanced high bandwidth services. Existing operators recognised that, if UMTS is 
optimised for wideband services, it will be easier for them as providers of existing narrow 
band systems to claim licenses in the UMTS band. Some operators question whether the 
financial power in the market is sufficient to make third generation a success if it would 
be a stand-alone technology and stress the need for a smooth migration from GSM by 
adding modular components. 
Finally, ETNO made the point that focusing the resources of many operators, 
manufacturers and service providers on a single standard (i.e. GSM) leads to high-quality, 
low-cost products and demonstrated market satisfaction. It stressed roaming as a key 
issue to service delivery that has played a pivotal role in the development of the market 
across Europe and many other countries of the world. Besides meeting an important 
market demand, Europe-wide roaming was identified as an important factor that has 
contributed to the global success of GSM. Technologies or standards (or any mix of 
them) which inhibit or constrain such roaming may prove less attractive to the world's 
operator community than those that facilitate roaming functionality through a single 
standard. 
A central role for ETSI 
Standardisation is, and will remain, a key factor in providing quality services for a 
reasonable price and in enabling roaming between systems. The success of UMTS 
depends upon the flexibility of interfaces and the capacity to evolve in parallel with 
technology. Continued close co-operation between operators, manufacturers and 
regulators in the standardisation of UMTS is crucial for UMTS to be as successful as 
GSM. 
12 Where the UMTS Forum elaborated the UMTS vision in broader conceptual and market terms, ETSI 
is working out the more detailed technical picture of UMTS. ETSI is expected to take a decision on 
the air-interface standard for UMTS during the first half of 1998. 
14 
There was general support for ETSI playing a role in developing an open and transparent 
approach to standardisation for UMTS and for it to carry out the task of UMTS 
standardisation, with an aim of ensuring efficient use of the designated UMTS frequency 
bands. Several Member States and industry players emphasised that technology choices 
should come from industry through the standardisation process in ETSI where only 
UMTS standards approved by ETSI should be used in those bands. 
A close co-operation between ITU, ETSI, and other regional standardisation bodies is 
essential to establish a framework for global compatibility. The Forum further places a 
great deal of importance in identifying UMTS as a part of the IMT-2000 family. 
The need for redirection of the standardisation from telecommunications per se towards 
information technology is recognised in several contributions from Member States and 
industry. It is mentioned that a much greater participation of the IT industry in the 
standardisation process is highly desirable. 
Several Member States had difficulty in seeing how competition amongst standards 
within the UMTS spectrum band could work without de-stabilising the market. It was 
recalled that one of the key factors in the success of GSM had been the stability of the 
standard and the large number of manufacturers supporting what is to a large extent an 
open standard. It was argued that competition between standards would invariably mean 
proprietary standards, which have the major drawback (as perceived by the operator and 
its financial backers) of locking an operator to one manufacturer for years. 
2.2.4 Research and Development 
The majority of the comments relating to R&D aim at improving the UMTS networks 
that will be deployed in the future, in terms of performance, capacity, Quality of Service 
(QoS) usability and cost. 
The proposals for future R&D, in particular in the context of the 5th Framework 
Programme, indicate the need for research into the so-called Enabling Technologies. 
Under this term can be found technology concepts that have emerged during the last 
years. Their incorporation into current and future mobile communications networks 
promises considerable improvements of performance. Technologies such as Neural 
Networks, High Temperature Superconductivity (HTS) and Space Division Multiple 
Access (SDMA) fall under this category. 
The need for further research on Software Radio Technologies (SRT) was highlighted in 
all contributions, as one of the technologies that will enable the introduction of service 
and content diversity and alleviate the problem of standards. The concept of software 
radio is seen as the basic technology that will allow a mobile network to adapt and 
reconfigure its radio interface and reallocate its resources, and to meet the characteristics 
of a variety of terminals. 
A number of proposals indicated the need to further investigate the incorporation of 
Digital Audio Broadcasting (DAB) systems into the future generations of mobile 
communications systems. The argument behind those comments is the ability of the DAB 
standard to provide high capacity wireless links that in the context of mobile 
communications systems can be used for downloading the code necessary for the 
reconfiguration of the mobile terminals. 
15 
ïn light of the foreseeable penetration levels of UMTS, a number of contributions 
indicated the need to provide information on the issue of health hazards caused by the use 
of mobile terminals and base stations. 
Also the ease of use of mobile terminals is considered as essential. Hence, issues such as 
Man Machine Interface (MMI), voice recognition, hands free operation, etc. need further 
research. 
Research on tools for planning and allocation of resource, network management and 
interconnection of networks (e.g. UMTS and broadband W-LAN's), considered from the 
perspective of spectrum efficiency, network capacity as well as QoS, are a priority, given 
the increased complexity of future networks. 
Further, the development of pilot platforms that provide the base for implementing and 
demonstrating new applications and services is considered as a valuable tool, in order to 
demonstrate to the consumers the flexibility and benefits of UMTS. 
Taking into account that UMTS will be deployed using the 2 GHz frequency band, it is 
felt that research should also be oriented towards the utilisation of higher frequency 
bands, providing further opportunities to meet the requirements for broadband 
communications. 
Comments were also expressed regarding the need to ensure that security and encryption 
techniques adaptable on the nature of the transmitted information over mobile 
communication channels (private or professional) are further researched. 
2.2.5 International aspects 
Comments stressed that the European market for UMTS will be a part of a global market. 
This has a number of implications for UMTS. For example, UMTS developments need to 
take into account trends in other parts of the world. But also the issue of access to the 
global market was seen as an important success factor for UMTS. 
Free circulation and roaming in a global context were mentioned by Member States, the 
UMTS Forum and industry as main issues on which European Community action should 
focus. Spectrum and standardisation issues must be progressed through the appropriate 
international bodies and specifically with the ITU. To that end, it was felt that the 
European participation in IMT-2000 standardisation work should be strengthened. 
In particular, the UMTS Forum report recommended that the European Union can 
undertake action to remove barriers to the use of UMTS beyond Europe. This includes an 
assessment to what extent UMTS might be covered by the commitments made in the 
Group on Basic Telecommunications of GATS/WTO. It is also recommended to take 
steps to ensure that UMTS products are explicitly covered by the Information Technology 
Agreement (ITA). 
16 
3. COMMISSION ASSESSMENT 
3.1. Areas of consensus 
In the light of the comments set out above, the Commission believes the following areas 
of consensus or strong support can be identified: 
Regulatory framework 
1. Broad agreement is found that now is the time to set out the strategy for the 
introduction of UMTS. The comments confirm the need to raise the UMTS to the 
forefront of a policy debate at the level of the European Union. 
2. The development of UMTS must be market-led and driven by the private sector. The 
Government's role should be to ensure that the regulatory climate does not hold back 
innovation and investment. 
3. The view that the current regulatory framework is broadly sufficient for UMTS is 
generally supported. Nevertheless, in order to enable investment decisions to be made, 
confirmation was requested that key aspects of that framework (e.g. licensing and 
interconnection rules) would apply to UMTS. Furthermore, clarification was sought 
on how decisions on licensing, frequency or standards could be accommodated within 
the existing rules. 
4. There is agreement that existing GSM players should be allowed to migrate to UMTS, 
while at the same time ensuring an open and competitive market for new players. 
Frequencies 
5. A majority of commentators consider the present ERC decision for 2 x 40 MHz to be 
allocated by 2002 to UMTS out of the FPLMTS band identified by WARC-92 as 
insufficient to establish a broad competitive service offering for UMTS. General 
agreement was found that further radio frequency spectrum needs to be identified. 
Standardisation 
6. Member States and private sector players stress the need for industry co-operation in 
ETSI to arrive at common and open standards for critical interfaces such as the air-
interface. Limiting standardisation to key interfaces would allow for a mix and match 
of vendors, without undermining the creation of a competitive market for equipment. 
7. Ensuring roaming capability for future multi-media systems is regarded crucial. This 
would be facilitated by a consensus on a common, open and internationally 
competitive air-interface standard within Europe. 
A solution where interoperability and roaming are provided through multi-mode 
handsets in an environment with multiple air-interfaces, even if technically possible, is 
not the preferred solution within Europe as it bears the risk of market fragmentation 
and/or higher costs. At a global level it remains possible that emphasis will be placed 
17 
on interoperability of a number of regional air-interfaces. The lack of a common and 
open air-interface in Europe would affect both the customer and the competitiveness of 
any UMTS standard. 
8. UMTS is viewed as a crucial test to Europe's competitiveness, both for the mobile 
communications industry and because of the importance of mobile communications for 
economic players at large. A strong home market would seem to provide the best 
conditions for European industry to compete in other parts of the world. 
Other issues 
9. The contributions to the consultation resulted in a broad range of fringe factors that 
need to be addressed to safeguard the general public interest. Views expressed were 
largely complementary and included actions in such areas as research into possible 
health effects as well as measures to ensure the protection of privacy and personal data 
and against fraudulent use. 
3.2. Issues for further discussion 
From the comments, it is also clear that in a number of areas, either no clear consensus 
emerged or further work is required: 
1. The extent to which further decisions concerning UMTS frequencies should be a 
matter for the European Community or for CEPT. Whilst many comments supported 
the use of CEPT/ERC mechanisms, concerns arose about the risk of those procedures 
failing to produce implemented results. Should that be the case a number of Member 
States and industry players saw a clear role for binding legislation within the 
Community. 
2. There was a split between industry and Member States with regard to the issue of 
spectrum pricing, with the industry reluctant to face spectrum fees which they argued 
would put up their business costs. Member States, however, were more open to placing 
a market valuation on a scarce natural resource to ensure its efficient use. 
3. Whilst there is agreement on the general notion of UMTS, the consultation has shown 
that it is not yet possible to describe UMTS in terms of system or technology concepts 
For Member States and operators a definition of UMTS, in particular its air-interface 
standard, is needed for regulatory action and indeed seems to be a pre-requisite for a 
co-ordinated introduction. 
18 
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4. ORIENTATIONS FOR PUBLIC POLICY f 
mwiTiiiT'BwiwMMtiTiiniiiwrrTwiiinrii iwn i wfwwi n HHWII—••—if—j n—HI •mini I—IIIWIMW IHIIWIHIHIIIII II iiii'iTMBrTiMrwiwrrr't^^r^r^ 
While addressing a wide range of issues, the comments received can be structured along 
main challenges, allowing general principles and political priorities to be identified 
(section 4.1). These findings are translated into recommendations for action by public 
authorities to establish a suitable regulatory environment and to address certain flanking 
issues (section 4.2). 
4.1. Policy objectives 
In the light of the comments received and the consensus established, three key policy 
objectives can be identified which should underpin future action both by the Community 
and by industry. These are set out below. In section 4.2 areas for Community actions to 
further the attainment of these objectives is set out. 
• Fostering the development of a market with a broad competitive offering of mobile 
multi-media services through competition 
This objective requires a legal and technical environment which will allow competing 
providers of UMTS services and networks. This requires an open licensing procedure 
and early decisions on the number of UMTS licenses. It requires sufficient spectrum to 
allow such competition and it requires standards which ensure that users can 
communicate with other users whilst not being so comprehensive as to prevent service 
providers from offering different service elements or facilities. 
• Enabling industry to meet user and societal needs 
The success of UMTS in an environment in which second generation mobile 
technologies are already well established is closely linked to ensuring it responds to 
user's needs, for example, for mobile multimedia and mobile Internet functions or for 
Europe-wide and global roaming of these services. The pricing of UMTS services and 
equipment will also be crucial to whether it is seen as a mass-market product or a 
niche premium service. From a regulatory perspective, it is essential that any 
remaining artificial market barriers are removed and that a broader convergence 
between telecommunications and audio-visual sectors is promoted. It is also important 
to address the broader social and societal interests and secure access to the "wireless 
information society" for all citizens. 
• Creating a climate for investment and deployment of UMTS and fostering Europe's 
competitiveness 
Investment and business planning requires early decisions as to the regulatory 
framework of UMTS, the spectrum availability and as to the standards, together with 
a longer term perspective on how further spectrum may be required. The application of 
the current regulatory enviromnent to UMTS should be confirmed and, where 
appropriate, further steps taken to adapt or clarify that framework. Finally, in order to 
preserve the broader industrial interests, industry with, where appropriate, support 
19 
from the Member States and the Commission should aim at positioning UMTS in 
global markets, both through ensuring a strong home base within the internal market 
and by promoting the rapid development of mobile multimedia applications. 
4.2. Recommendations for further action 
Whilst industry and national Governments have a key role in achieving the policy 
objectives set out section 4.1, the Commission believes that all appropriate actions must 
be taken with particular attention being given at European level to the following five key 
areas: regulatory framework, frequency related issues, standardisation and system 
definition, research and development, and action at the international level. 
4,2J Regulatory Framework 
The Commission considers to propose a European Parliament and Council Decision 
("UMTS Decision") with respect to roaming, frequencies and standards. 
Licensing 
How, when and by whom licences for UMTS service providers and operators will be 
granted, are questions of central importance. The current framework for licensing is 
fully applicable to UMTS. UMTS does not therefore require a new approach to licensing 
in order to respond to these questions. Nevertheless, three specific implications of the 
current licensing framework should be highlighted : 
• The number of UMTS licences should only be limited, in line with existing 
Community law, by the spectrum13 to be made available on the basis of the foreseeable 
market requirements (see below: "frequency issues", section 4.2.2). However, given 
the need for UMTS to be market-led, the Commission believes that planned demand 
for UMTS should determine the amount of spectrum allocated14. Additionally, UMTS 
service providers should be able to enter the market without unnecessary constraints to 
allow a dynamic market and broad competitive service offering to develop general 
authorisations or declaration procedures should be the rule, if an authorisation 
procedure is considered necessary. Individual licences should be confined to the 
operation of UMTS networks. 
• UMTS licensing should seek to ensure the development of pan-European services 
through a co-ordinated introduction. This implies that the systems licensed should 
support roaming and operate in conformity with standards developed for UMTS by 
ETSI where these are available (see below: "standardisation", section 4.2.3). 
13 Whilst the Licensing Directive also foresees limitations " for the time necessary to make available 
sufficient numbers in accordance with Community law", shortage of numbers represents only a 
temporary ground to limit licence numbers until a national numbering plans supporting competition 
have been put in place. These are linked to the liberalisation of the télécoms market and so would not 
be an acceptable basis to limit UMTS licences numbers, given the likely start date of 2002. 
14 In general spectrum allocation decisions seek to ensure that spectrum is allocated to high value uses in 
preference to lower value uses. 
20 
• Licensing procedures should not automatically exclude any organisation from the 
bidding process, nor should they automatically reserve UMTS licences for one or more 
existing players (e.g. GSM/DCS operators). Any assessment of applications should 
take into account the benefits of allowing current GSM/DCS operators into the UMTS 
market in terms of synergies and existing commercial experience. 
Interconnection 
With the adoption of the Interconnection Directive15, a detailed harmonised framework 
for interconnection between fixed, mobile and fixed and mobile networks is in place. 
This interconnection framework would be fully applicable to UMTS services. 
Roaming 
The Commission attaches particular importance to the development of pan-European 
UMTS services, as a key element in an internal market for telecommunications and 
multimedia mobility services16. In this respect, but also to secure the attractiveness and 
credibility of European technology to the world's operator community, demonstrated 
Europe-wide roaming on the basis of a common, open and internationally competitive air-
interface standard has its particular relevance for UMTS. 
The proposed UMTS Decision will provide for rights and obligations to negotiate 
commercial roaming agreements with other UMTS service providers or network 
operators on the basis of a common, open and internationally competitive air-
interface standard. 
4X2 Frequency issues 
The timely availability and allocation of spectrum is fundamental to UMTS's launch. 
The amount of spectrum made available will have a direct impact on how competitive the 
market place will be. While the Commission welcomes the recent ERC decision on 
UMTS spectrum allocation, it notes the concerns of industry that the amount of spectrum 
reserved is too modest, if current demand forecasts are correct, and considers that the 
allocation of further spectrum needs to be examined. On the basis of available 
information, the Commission believes that an assessment of the value of alternative 
spectrum allocations is required in order to assess whether UMTS service were being 
uneconomically "shut out" due to allocation of spectrum to lower value alternative uses. 
Spectrum must be allocated sufficient time before UMTS services are commercially 
deployed (2002) and a clear strategy should be developed for the release of such spectrum 
as demand for UMTS increases further. Spectrum could be drawn by exploiting the 
FPLMTS band identified by WARC-92 as well as by refarming in the 900, 1800 and 
1900 MHz band17. Spectrum needed beyond this would have to be allocated by future 
15 
16 Directive 97/33/EC of the European Parliament and of the Council of 30 June 1997 on interconnection 
in telecommunications with regard to ensuring universal service and interoperability through the 
application of the principles of Open Network Provision (ONP), OJ LI99, 26 July 97 
Council Directive 91/263/EEC addresses inter alia the mutual recognition of conformity and free 
circulation of terminals. A proposal for a European Parliament and Council Directive on connected 
telecommunications equipment and the mutual recognition of conformity of equipment (COM(97)257 
of 30.5.97) is currently under review. 
17 In this respect, consideration should be given to Article 2(3) and (4) of Directive 96/2/EC 
21 
decisions within the WRC mechanism (see below: "UMTS in the international context", 
see section 4.2.5). 
The Commission recognises the value of the current activity of the CEPT and the 
particularly relevant involvement of industry, through the UMTS Forum, in spectrum 
discussions. 
The Commission shares the views expressed that spectrum allocation should be pursued 
in the context of the CEPT. Nevertheless, the Commission believes that action to support 
the timely implementation of decisions at a Community level can make an important 
contribution to the successful preparation and implementation of UMTS and that such 
action must be taken when needed. 
In relation to the valuation to be attached to spectrum, the Commission considers that any 
fees charged must aim at ensuring efficient usage of a valuable resource. Where Member 
States choose to allocate spectrum via auctions, it will be important that the mechanisms 
put in place do not result in outcomes which adversely impact the public interest, in 
particular in respect of the competitive structure of the market. Where assignments are 
administered by officials, any fees beyond administrative costs will involve a subjective 
valuation of the resource, given that a market valuation can only be obtained through 
market mechanisms18. 
The proposed UMTS Decision will therefore set out a methodology, similar to the 
one applicable through the S-PCS Decision19, for the timely implementation at 
Community level of the results of the CEPT ERC work in UMTS spectrum 
allocations. 
wireless local loop 
Although wireless local loop is not the subject of this Communication, the Commission 
considers it necessary to give its position on UMTS spectrum usage in relation to wireless 
local loop. 
The Commission recognises that wireless local loop is a promising technique to bridge 
the gap between fixed and mobile cellular communications where strong interest is seen 
from existing operators -fixed and mobile- as well as potential new entrants. Wireless 
local loop could provide an economically attractive alternative to the wireline local loop 
and indeed to mobile communications. 
The Commission considers that wireless local loop may develop on the basis of different 
technological solutions in national, metropolitan area or local markets. Although some 
19 Where properly designed auctions are used to assign spectrum, the economic theory is that any fees 
paid will reflect the discounted present value of the excess profits the second highest bidder expects to 
receive. The bidding stops when the second highest bidder drops out. What the highest bidder would 
have been prepared to pay, is never discovered. However, a properly designed auction makes public 
much of the private information held by the bidders, thus reducing the margin between the second 
highest and highest bids. 
Decision 710/97/EC on a co-ordinated authorisation approach in the field of satellite personal-
commimication services in the Community, 24 March 1997, OJ LI05/4 
22 
form of interoperability is desirable, the scope and need for harmonisation may not be as 
for mobile systems where full roaming functionality requires global or regional standards. 
The Commission recognises that some Member States have allocated different bands of 
spectrum to wireless local loop services and supports the work of ERO to look into the 
possibilities for further harmonisation. 
The Commission considers that the scarcity of UMTS/FPLMTS spectrum and the special 
value it has due to its Europe-wide (global) availability justify access restrictions to this 
band and therefore that wireless local loop systems should be allowed in this band only if 
a harmonised Europe-wide introduction can be agreed. 
4.2.3 Standardisation 
The Commission supports the UMTS standardisation efforts undertaken so far by ETSI, 
calls for all interested parties to contribute to this process and welcomes the fact that 
standards development is being led by the private sector and that a consensus seems to be 
developing on the issue of the core network. It considers that the results to be delivered 
by ETSI in time for the envisaged start up of UMTS should become an open technical 
reference for the future UMTS environment. 
In order to allow for effective service competition and innovation, the Commission 
believes that the UMTS standardisation process should be limited to what is necessary to 
permit systems to be developed, while allowing a differentiation at service provision. 
Such an approach is consistent with the competitive telecommunications environment 
today, in contrast to the largely monopoly environment which existed at the inception of 
the GSM standard. 
The Commission believes that the standardisation work should in particular aim at 
ensuring the end to end interoperability which is needed by a pan-European UMTS 
environment. This would strengthen the acceptance of UMTS by users (particularly, with 
regard to choosing whether to migrate from current systems supporting global roaming), 
as well as more rapidly securing a critical mass of UMTS equipment and services, within 
and beyond Europe. 
The Commission therefore considers that work should aim at establishing a 
common, open and internationally competitive UMTS air-interface standard. It calls 
on manufacturers to work within the ETSI standardisation process towards this 
goal. The proposed UMTS Decision will identify conditions which may be attached 
to licenses in order to ensure pan-European services based on ETSI standards, 
where available. 
4.2.4 Research and Development 
Although the Community efforts under the RACE and ACTS Specific Research 
Programmes have already made a significant contribution to preparing the technological 
base for UMTS and in comparing the merits and disadvantages of competing technical 
solutions the Commission believes that there is a continued need for research in relation 
to UMTS. This effort will be pursued in the context of the forthcoming 5th Framework 
Programme and should in particular address work relating to network planning and 
management, realisation of intelligent networks (network agent techniques), network 
integration, quality of service, usability, cost/performance, spectrum efficient techniques, 
23 
software radio, adaptive allocation of network resources. Aspects relating to man-
machine interfaces, terminal usability and the safe and secure use of mobile and wireless 
equipment20 will also be considered. 
Community and national research efforts should continue to support pre-competitive 
work in the area of UMTS and its further evolution, with the spin off that such investment 
ensures an expansion of the knowledge base for third generation systems and provides the 
experts which a UMTS industry will need. 
Besides this technological oriented research, the broader social and societal effects of 
transitioning towards the "wireless information society" will need reflection and be 
addressed as a matter of priority. 
4*2*1 UMTS in the international context 
The Commission considers that the further development of UMTS should aim at 
establishing a global standard, much like what was done for GSM. The Commission calls 
on Member States and industry at large to join its efforts and take the following actions: 
• Proposing and promoting the UMTS standard (under development within ETSI) as a 
key element of the IMT-2000 recommendation currently in preparation at the ITU. 
• Securing spectrum availability for UMTS for its longer term needs by seeking 
adequate frequency allocations through the WRC process. In particular, the 
Commission supports the CEPT and the UMTS Forum position to propose the 
inclusion of the issue in the agenda of the WRC-99 conference, at the forthcoming 
WRC-97. The Commission also fully supports the concerted efforts of the UMTS 
Forum towards the world community to secure further spectrum for terrestrial mobile 
communications. 
• Encouraging contact between interested industry organisations, standardisation bodies 
and administrations of Europe and those of our commercial partners in order to 
promote the goal of a globally interoperable UMTS system and to help in establishing 
co-operation and alliances among private partners at an early stage of UMTS 
development. 
• Initiate at an early stage the discussion of market access and free circulation of UMTS 
systems and terminals building on the experiences of the GM PCS MoU. 
20 A research programme into the possible health effects related to the use of mobile phones is under 
preparation. This work will draw in particular on the recommendations of an independent multi-
disciplinary group of experts which prepared a report last year for the Commission in this field; 
further, a Commission proposal for a Council Recommendation pursuant to Article 129 (public health) 
is under consideration which will address health concerns as regards public exposure to radio 
frequencies. 
24 
OVERVŒWOF RECOMMENDED ACTIONS 
Note : The steps indicated in the regulatory area below are additional to the confirmation in this 
Communication that the current rules on licensing and interconnection apply to UMTS activities, in 
particular with regard to: (i) the limitation licence numbers; (ii) the need to support the take up of 
ETSI standards, where they exist, and (iii) the need to ensure that current operators are not 
automatically granted UMTS licences or excluded from bidding for such licences. 
domain recommended actions 
Regulatory Framework • Proposal by the Commission of a UMTS Decision which will : 
• define rights and obligations to negotiate roaming 
arrangements, to the extent that these are not covered by the 
Interconnection Directive 
• identify conditions which may be attached to licences in 
order to ensure pan-European services based on ETSI 
standards, where available 
« set out a methodology for ensuring the co-ordinated 
allocation of frequencies in the Community for UMTS 
Frequency issues • Ensure co-ordinated and timely allocation of spectrum within the 
Community by referring to CEPT mechanism or, where necessary, 
through Community measures, in particular: 
• Prepare the allocation of adequate spectrum to be made 
available by 2002 (start of UMTS service provision) 
• Consider freeing of 900,1800,1900 MHz bands for mid­
term UMTS usage (2005) 
• Expand spectrum availability beyond the WARC-92 
FPLMTS band for mid to long-term UMTS usage (2005-
2010) 
• Encourage efficient use of UMTS spectrum through pricing 
Standardisation • ETSI to work out critical interfaces for the UMTS environment to 
support competitive provision of products and services, while 
supporting interoperability and roaming 
• Key focus for standardisation should be the development of a 
common, open and internationally competitive standard for the air 
interface 
Research and • Pursue R&D support on technical solutions needed for UMTS (5th 
Development Framework Programme) 
• Dissemination of information and training on UMTS related 
technologies (to ensure adequate skill base for UMTS realisation) 
• Support R&D on possible health impacts of electromagnetic 
radiation 
UMTS in the • Submission of ETSI developed UMTS standard as option for the 
international context IMT-2000 standard (ITU) 
• Explore within WRC the expansion of FPLMTS band allocated for 
3rd generation mobile applications 
• encouraging global dialogue among industry actors, 
standardisation bodies and administrations to promote 
interoperability of UMTS at global level 
• ensuring world-wide free circulation of UMTS terminals (MRA 
arrangements, MoU for multilateral rules) 
25 
4.3. Proposed targets, action plan and timing 
The two tables below attempt to give an overview on targets, actors and timing as a 
general frame of reference, as well as a summarised action plan which identifies the 
concrete steps necessary to implement the actions proposed in the previous chapter. 
Proposed targets: 
target ' main actor by 
UMTS standardisation phase 1 ETSI end 1999 
license award (first round) Member States end 1998 
IMT-2000 standardisation ITU 1999 
start commercialisation private sector 2002 
extension spectrum allocation spectrum administrations 2004-2005 
Action Plan for the Community: 
action by 
WRC-97: preparation of agenda WRC-99 Oct.97 
(to include UMTS spectrum allocation) 
Adoption of Council Resolution on present Dec.97 
Communication setting out political priorities 
Proposal of a UMTS Decision on spectrum and Jan. 98 
licensing conditions 
Implementation of 5th Framework Programme 98 
Adoption of UMTS Decision early 1999 
Mandate to ERC on further spectrum allocation Feb. 99 
MRA negotiations continuous 
WRC-99: extension of UMTS spectrum allocation Oct.99 
Review of telecommunication regulatory environment end 99 
5. CONCLUDING REMARKS 
The consultation has confirmed the need to actively pursue at this juncture the discussion 
of the conditions to prepare and establish the future UMTS environment. Although the 
development of UMTS must be market led and driven by the private sector, the 
government's role in setting out the appropriate regulatory environment is important in 
providing confidence which will generate further innovation and investments, taking into 
account consumer interests. 
UMTS is Europe's answer to global developments in the market for future mobile and 
wireless communications. Its characteristics of supporting Europe-wide (and global) 
services roaming, including a range of multimedia applications means that UMTS will 
play a key role in extending the reach of the information society. 
For UMTS to succeed, industry has indicated a need for certain aspects of the current 
regulatory framework to be clarified, and for key resource decisions to be taken, so that 
business plans can be finalised. A strong home market will help European companies 
compete in other parts of the world and allow them to consolidate the leading position 
that they hold today on the world market with GSM. 
The rapid and broad deployment of UMTS will benefit European businesses and all users 
and assist in the development of certain rural areas, by creating new pan-European 
services, stimulating the growth in cross-border provision of goods and services. It will 
help European businesses of all sizes and citizens to have access to a further route into the 
electronic economy. 
Policy makers today have an exceptional chance to help shape a seamless mobile 
multi-media communications environment for Europe by setting out the broader 
policy lines that will create a common growth basis for the development and 
introduction of UMTS. This will benefit European citizens and industry as a whole. 
This Communication of the Commission is intended to support political discussions with 
the European Parliament, the Council of the European Union, the Economic and Social 
Committee, and the Committee of the Regions. 
27 
ANNEX I: LIST OF CONTRIBUTORS TO THE CONSULTATION 
as per 19/09/1997 
Member States or their representative offices 
ETO Italy, Ministry of Communications 
Denmark, Research Ministry Portugal, Instituto das Comunicacoes 
Finland, Ministry of Transport and Communications Sweden, Ministry of Transport and Communications 
France, DPT UK 
Germany, Bundesregierung UK Home Office 
Industry, industry associations and others 
Airtel Movil 
Airtouch 
Alcatel 
Autel 
Bayerische Rundfunk/Mueller-Roemer 
Belgacom 
BT 
Cable & Wireless 
Cegetel 
Cellnet 
CNPF 
Deutsche Telekom 
Diehl GmbH 
e plus 
ECTEL 
Enertel 
Ericsson 
ETNO 
Finmeccanica SPA 
Finnet Group 
France Telecom 
INMARSAT Mannesmann Mobilfunk 
MATAV 
Nokia 
Olivetti 
One-2-One 
ONP-CCP/Joint industry group 
Orange 
Philips 
Picienne Italia 
Post and Telekom Austria 
Proximus 
Siemens 
T-Mobil 
Telecel 
Telefonica 
Telenor 
Tescher Team 
TIM 
UMTS Forum Manufacturers Group 
UNICE 
Vodaphone 
WDR 
28 
ANNEX II: LIST OF ACRONYMS 
ACTS Advanced Communications Technologies and Services 
CEPT European Conference of Postal and Telecommunications 
Administrations 
DAB Digital Audio Broadcast 
EP European Parliament 
ERC European Radiocommunications Committee 
ETNO European Telecommunication Network Operators Association 
ETSI European Telecommunications Standardisation Institute 
FPLMTS Future Public Land Mobile Telecommunications System 
GM-PCS Global Mobile Personal Communications by Satellite 
GSM Global System for Mobile 
HTS High Temperature Superconductivity 
IMT-2000 International Mobile Telecommunications 2000 
ISDN Integrated Services Digital Network 
IT Information Technology 
ITA Information Technology Agreement 
ITU International Telecommunications Union 
MBS Mobile Broadband Systems 
MMI Man Machine Interface 
MoU Memorandum of Understanding 
MRA Mutual Recognition Agreement 
RACE Research and technology development in Advanced 
Communications in Europe 
R&D Research and Development 
QoS Quality of Service 
SDMA Space Division Multiple Access 
SMG Special Mobile Group 
TETRA Trans-European Trunked RAdio 
UMTS Universal Mobile Telecommunications System 
UNICE Union of Industrial and Employers ' Confederations in Europe 
WARC/WRC World (Administrative) Radio Conference 
W-LAN Wireless Local Area Network 
WLL Wireless Local Loop 
29 

ISSN 0254-1475 
COM(97) 513 final 
DOCUMENTS 
EN 15 16 
Catalogue number : CB-C0-97-543-EN-C 
ISBN 92-78-26010-X 
Office for Official Publications of the European Communities 
L-2985 Luxembourg 
26