COMMISSION OF THE EUROPEAN COMMUNITIES 
Brussels, 29.05.1997 
COM(97) 217 final 
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TO THE COUNCIL, THE EUROPEAN PARLIAMENT, 
THE ECONOMIC AND SOCIAL COMMITTEE 
AND THE COMMITTEE OF THE REGIONS 
ON THE FURTHER DEVELOPMENT OF MOBILE 
AND WTRELESS COMMUNICATIONS 
Challenges and choices for the European Union 

EXECUTIVE SUMMARY 
This Communication presents an overview of developments in the mobile and wireless 
communications market within the European Community since the 1994 Green Paper on 
mobile and personal communications1 and examines the future direction of mobile and 
wireless communications. It responds to the specific call following the Green Paper from 
the Council and from the European Parliament for the Commission to report on the 
development of mobile communications2. It does this against the background of the 
market success of GSM and related digital communications services within the EC and 
world-wide; the increasing use of mobile communications to connect computers and to 
access the Internet; the development of satellite-based personal communications systems; 
the substantial regulatory progress made towards the full opening to competition of 
telecommunications markets in most Member States from 1 January 1998 and the 
successful conclusion of the WTO deal on basic telecommunications. 
Building on these current developments, the communications industry is developing a 
strategic vision of the next generation of digital mobile systems referred to in Europe as 
the Universal Mobile Telecommunications System (UMTS). Details of future service 
concepts and of future user requirements need to be addressed in order to formulate 
regulatory, frequency and standardisation responses at a European and national level. 
Against the background of the expected high growth of the mobile communications 
sector, its convergence with intelligent networking, multi-media content provision, and 
navigation and positioning and related value-added services, but also its future position in 
the world-wide telecommunications landscape, the resulting formidable export 
opportunities, the impact on overall economic performances, as well as the employment 
opportunities and the broader social and societal impact, the political interests in the 
development of the "wireless information society" are multi-faceted and of 
considerable importance. 
This Communication seeks to assist in the political debate by inviting responses to key 
questions touching on both the shape of future third generation systems and on the 
accompanying environment in which such systems should emerge. These key questions 
are summarised below : 
Is this the right moment to define a strategy for the introduction of UMTS or would 
regulatory action today be premature? 
Green Paper on a common approach to mobile and personal communications in the European Union, 
COM(94) 145 final, 27.04.94 
European Parliament Resolution of 19 May 1995 (A4-0097/95; OJ C 151/473, 19.06.95) and Council 
Resolution of 29 June 1995 on the further development of the mobile and personal communications 
sector in the European Union (95/C 188/02; OJ C 188/3, 22.07.1995) 
/ C\ 
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"? 
On the basis of the response to this Comniunication and other relevant factors, the 
Commission will propose, if and where appropriate, measures for adoption by the 
European Parliament and the Council. Comments should be sent at the latest by 15 July 
1997 to the European Commission, DG XIII/A/1, rue de la Loi 200, B-1049 Brussels, to 
the attention of Mr. de Cockborne (fax + 32 2 296 8391) or by e-mail to: 
umts@bxl.dgl3.cec.be. 
lb 
TABLE OF CONTENTS 
EXECUTIVE SUMMARY 
TABLE OF CONTENTS IV 
1. INTRODUCTION 1 
2. WHERE DO WE STAND TODAY? 5 
2.1. Mobile Communication today in Europe and in the rest of the world 5 
2.2. The regulatory environment and the standardisation framework have been key factors in 
supporting mobile market developments 
2.3. Markets and technology are rapidly evolving 
2.4. Activities at global and regional level are supporting this evolution 
3. THE FURTHER DEVELOPMENT OF MOBILE COMMUNICATIONS: KEY 
CHALLENGES AND QUESTIONS 13 
3.1. Major challenges for future mobile communications 
3.2. A new environment for UMTS 
3.3. Core issues for future decisions : key questions 
3.4. Creating conditions for development: key questions relating to the role 
of public authorities 
4. CONCLUSIONS 13 
13 
14 
16 
21 
ANNEX I: MOBILE COMMUNICATION IN EUROPE IN FIGURES 
ANNEX II: THE REGULATORY FRAMEWORK FOR MOBILE 
COMMUNICATIONS 
ANNEX III: OVERVIEW OF FREQUENCIES FOR MOBILE 
COMMUNICATIONS 
ANNEX IV: LIST OF ACRONYMS 24 
27 
29 
33 
/ C 
1. INTRODUCTION 
Europe today has created an environment within which mobile communications can 
flourish and has positioned itself at the forefront of mobile communications world­
wide 
Mobile Communications has been one of the fastest growing segments of the 
telecommunications market over the last five years. This is evidenced by the spectacular 
growth in GSM3 subscribers and investment. Since its commercial launch in 1992, GSM, 
and its related technologies, DCS-1800 and PCS-1900, have emerged as a world standard 
for mobile communications with services provided through nearly 200 networks to more 
than 30 million users in over 100 countries. Asia is becoming one of the biggest 
customers for GSM systems whilst in the USA PCS-1900 is enjoying early success. 
By providing pan-European coverage through a single subscription, GSM is a concrete 
example of a trans-European network in action. It has developed through industry-led 
efforts, backed up by an appropriate regulatory framework and timely standardisation 
decisions. 
GSM growth is mirrored by the continuing uptake of other mobile and wireless 
technologies in Europe and in other parts of the World. These systems include cordless 
telephony, wireless networks for phones and computers within buildings, paging and the 
use of wireless technologies to compete with the fixed public network in the local loop. 
Satellite-based personal communications systems will offer a further stimulus to the take 
up of mobile communications4. Satellite systems allow for the delivery of advanced 
communications services, often requiring high capacity transmission, in parts of the 
World where terrestrial networks are underdeveloped. They may also offer cost effective 
coverage of more remote regions of Europe. 
European citizens are feeling the benefits of mobile systems and of competition 
between mobile networks 
Today users can remain in contact wherever they are. Mobile communications is no 
longer the privilege of the businessman or the traveller. They offer everyone the ability to 
make phone calls, receive faxes, check e-mail or use the Internet whilst on the move. 
Mobile communications has become an essential tool for businesses of every size, but are 
also reaching an increasing number of homes and as such has now an important social 
3 The term GSM is taken in this Communication to cover a family of technologies, namely : GSM 900, 
DCS 1800 and PCS 1900, all of which support the same features and services. 
4 In order to promote a more proactive role and consistent approach in satellite communications, the 
Commission recently adopted an EU Action Plan: Satellite communications in the Information 
Society, Communication from the Commission to the Council, the European Parliament, the 
Economic and Social Committee and the Committee of the Regions, COM(97) 91 final, Brussels, 
05.03.1997 
O L 
economic function5. In Scandinavia more than one in four people has a mobile phone, 
sometimes instead of having a fixed connection. 
Mobile and wireless networks are also providing alternatives to the fixed network for 
telephone companies, particularly for new entrants seeking to provide a cost-effective 
route into businesses and homes. In this way mobile and wireless systems can carry 
competition right down to the local loop. 
Towards a "wireless information society"for every citizen and business 
The potential benefits of the "wireless information society" are manifest6. The 
Commission in its Communication on universal service7 stressed tftat "new inter-active 
services should be accessible to every citizen in the Community so that the benefits of 
new technologies and services are felt in areas, such as education and training, health 
care and access to public information". UMTS can help to bring this vision about. 
UMTS holds potential for Europeans both as citizens, consumers and in their work, 
providing for greater choice, lower prices and full mobility. This will allow wider access 
to entertainment services, support to the elderly and the disabled, as well as public 
information and transactional services such as home-shopping and banking. 
The use of mobile communications for teleworking will stimulate increased employment, 
mobility and development in rural and remote areas, as well as increasing the 
competitiveness of European industry more generally. This should have an important 
impact in further stimulating employment in all regions of the European Community. 
At the same time, UMTS, as a stepping stone towards the "wireless information society", 
raises challenges of a social and societal nature which need to be addressed in parallel to 
the technological issues. 
The challenge of the third generation mobile systems. 
The convergence between telecommunications, information technology and publishing, 
evidenced by the development of Internet, is accompanied by a convergence between 
fixed and mobile services. This is happening at the same time as an increasing 
globalisation of telecommunications, as shown by the almost world-wide roaming 
capability of GSM. This will result in increasing demand for services covering the 
transmission of data, sound and images both in the fixed and in the mobile networks. 
5 For example, mobile communications may facilitate teleworking or access to ones home base whilst 
on the move. 
See Green Paper on Living and Working in the Information Society: People First, COM(96) 389, 
24.07.96; and The Information Society: the role of the European Union, Communication from the 
Commission to the Council, the European Perliament, the Economic and Social Committee and the 
Committee of the Regions, COM(97)...to be adopted shortly 
Communication from the Commission to the Council, the European Parliament, the Economic and 
Social Committee and the Committee of the Regions on Universal service for telecommunications in 
the perspective of a fully liberalised market, COM(96) 73 final, 13.03.1996 
The telecommunications industry is currently developing a strategic vision of third 
generation digital mobile systems8. This reflection in Europe focuses both on the concept 
of Universal Mobile Telecommunications Systems or UMTS and on the idea of Global 
Multimedia Mobility (GMM). This vision is central to the further development of 
mobile and wireless communications in Europe, to the transition from mobile 
communications to mass market deployment in direct competition with today's fixed 
network operators, and to the possible integration of fixed and wireless networks within a 
personal communications environment. Whilst much of the detail of UMTS remains to 
be worked out, certain broad objectives for UMTS have been identified by ETSI in its 
Report on a standardisation framework for GMM9. ETSI describes UMTS as providing 
"personalised globally accessible high quality mobile communications services" meeting 
such objectives as integration of fixed and mobile services allowing use of a single 
terminal, multimedia capability, low cost, and high frequency spectrum efficiency10. 
While the main thrust for the development of UMTS must come from the industry in 
response to users' needs, a major challenge for the European Community and its Member 
States is ensuring a favourable environment within which these initiatives can develop 
and extend the success of GSM in the third generation systems. This represents a major 
opportunity for the European industry, given the globalisation of the market for mobile 
equipment and services. It must be seen against the general evolution of the 
telecommunications sector in Europe towards full competition from 1 January 1998, as 
well as in the context of the successful conclusion of WTO negotiations on the opening 
up of the world-wide market for basic telecommunications services and on the phasing 
out of custom duties for information technology products1 '. 
In determining the appropriate response at an EC and national level to these expected 
characteristics of UMTS, a number of factors need to be taken into account which reflect 
varying, and sometimes conflicting, interests of the different players concerned, such as 
incumbent mobile operators and potential new entrants, equipment manufacturers and 
users. This should include inter alia the broader social and societal aspects of the 
"wireless information society", and global standards developments. 
In this Communication, the Commission responds to the call from the Council and from 
the European Parliament following the consultation on the Green Paper on Mobile and 
Personal Communications to report on the further development of mobile 
8 Analogue mobile systems is considered to be first generation technology, whilst digital technologies 
such as GSM in Europe or D-AMPS and PCS 1900 in the USA represents the second generation. 
9 Global Multimedia Mobility (GMM) - A Standardisation Framework, ETSI document 
ETSLTA24(96)45, October 1996 
10 See below, part 2.4. 
11 WTO GATS GBT (Basic Telecommunications) of 14 February 1997; Information Technology 
Agreement (ITA) on the basis of the Ministerial Declaration (WTO Ministerial Meeting Singapore, 13 
December 1996) endorsed by the ITA negotiating parties in Geneva on 26 March 1997. 
communications and the evolution towards the UMTS12. Section 2 presents an overview 
of market, regulatory and technological trends. Section 3 invites comments on a range of 
issues which will help to - identify better the future UMTS concept and the actions 
necessary to foster its development. 
12 European Parliament Resolution of 19 May 1995 (A4-0097/95; OJ C 151/473, 19.06.95) and Council 
Resolution of 29 June 1995 on the further development of the mobile and personal communications 
sector in the European Union (95/C 188/02; OJ C 188/3, 22.07.1995) 
2. WHERE DO WE STAND TODAY? 
2.1. Mobile Communication today in Europe and in the rest of the world 
Today there are more than 37 million users of mobile communications in Europe (figure 
1.1). Of these 25 million use digital (GSM) and 12 million use analogue systems. 
Additionally there are around 4.5 million users of analogue and digital paging systems. 
The use of mobile data in Europe is growing rapidly, with estimates that from a base of 
around 3 million mobile data users today (around 1% of the population) that figure will 
grow to 8 million by 2000. Currently mobile subscriber lines represent around 14% of the 
total number of lines within Europe. Penetration rates of cellular mobile services have 
already reached 30% in some EU countries (figure 1.2). Within Europe, it is anticipated 
that they will rise to 40-50% of the population by 200513. 
Today there are at least two digital mobile systems operating in each EC Member State 
(except Luxembourg which will soon issue a second license), with additional DCS 1800 
systems licensed in 6 Member States and a requirement for licences for DCS 1800 to be 
granted on request in other Member States from 1 January 1998. These digital systems 
are in addition to the 20 analogue networks which continue to operate in the Community 
and which still retain almost one third of mobile telephony subscriptions. 
There is a gradual but accelerating shift from analogue to digital based services for 
mobile voice and data communications, as well as for paging. Nevertheless, in a few 
countries analogue networks continue to grow steadily, taking account of the relatively 
limited needs for roaming of residential users and the attraction of lower priced service 
packages for analogue systems. However, GSM has already surpassed analogue as a 
whole in terms of the number of users in Europe (figure 1.3). 
Since its commercial launch in 1992, GSM has emerged as a World standard for mobile 
communications. GSM and its related technologies, DCS-1800 and PCS-1900, provide 
coverage through 187 networks in 103 countries and have a subscriber base of 32.7 
million users. Asia is becoming one of the biggest customers for GSM systems with 
China on top in size of market and contracts. In the USA, PCS-1900 is enjoying early 
success, with the licensed networks potentially offering near 100 % population coverage. 
With the quasi-exception of Europe where GSM stands as the single digital system today, 
the situation in terms of cellular systems world-wide is characterised by a diversity of 
technologies, both analogue and digital, that compete for customers. As a result global 
roaming outside of the GSM system is practically impossible and sometimes difficult 
even at national level. A user, when travelling, is obliged to rent a suitable terminal at the 
destination, but he or she may find it difficult to remain in touch. Such competition 
13 Detailed market information and forecast can be found in two studies realised for the Commission: 
"Mobile Market Review", KPMG, November 1996 and "UMTS Market Forecast, Analysys/Intercai, 
February 1997 
between systems, has lead to present efforts in the areas of multi-mode and multi-band 
terminals, capable of "talking" the different regional "languages". 
2.2. The regulatory environment and the standardisation framework have 
been key factors in supporting mobile market developments 
Fostering the development of mobile services has been a central theme of Community 
telecommunications policy since its inception. The agreement in the 1980s on the 
frequency allocation for GSM services and on the timetable for its co-ordinated 
introduction into the Community14 were key to creating an appropriate environment for 
the take off of GSM and DCS-1800 services within Europe. These decisions went hand 
in hand with the detailed standardisation work completed by ETSI on the basis of the 
work of the CEPT15 and the GSM Memorandum of Understanding Association. 
Furthermore, the Commission has been proactive in ensuring the competitive provision of 
digital mobile equipment and services since their introduction in 199216. This has 
involved ensuring that there are at least two operators of digital cellular systems in most 
Member States; that licensing procedures have been open, transparent and non­
discriminatory and; that licences have created fair market conditions for competitors, 
particularly, where they have entered the market later than the first licensee which in most 
Member States was granted automatically to the fixed network operator17 (see also Annex 
II). 
Most Governments now favour such competition. Increasingly they are making use of 
market-based mechanisms to ensure the best balance between service quality, promotion 
of the public interest and income for the State. Spectrum auctioning for radio-frequency 
has been used notably in the USA to promote economically efficient allocation of what is 
14 See Council Directive on the frequency bands to be reserved for the co-ordinated introduction of 
public pan-European cellular digital land-based mobile communications in the European Community, 
25 June 1987, 87/372/EEC, OJ L196/85, 17.07.87. This directive was adopted in combination with a 
Council Recommendation on the co-ordinated introduction of public pan-European cellular digital 
land-based mobile communications in the Community, 87/371/EEC, OJ LI96/81, 17.07.87 
15 Conférence Européenne des Postes et Télécommunications 
16 A further factor in some Member States has been the sophisticated structure of marketing structures 
put in place. The existence of independent service providers in addition to network operators has 
contributed to high levels of service penetration and to the development of an innovative range of 
pricing packages. 
17 In a number of cases, the Commission has intervened to ensure that where licensing conditions were 
not fair, compensatory mechanisms were put in place in favour of the competitor. See Commission 
Decision of 18 December 1996 concerning the conditions imposed on the second operator of GSM 
radiotelephony services in Spain, OJ L76, 18.3.97 and Commission Decision of 4 October 1995 
concerning the conditions imposed on the second operator of GSM radiotelephony services in Italy, 
OJL280, 23.11.95 
recognised to be a valuable resource18. Community law recognises the possibility of 
charges within national licensing regimes (i.e. for spectrum allocation) which reflect the 
need to ensure the optimal use of these resources, as far as these changes are non­
discriminatory and take into account the need to foster the development of innovative 
services and competition19. 
2.3. Markets and technology are rapidly evolving 
Cordless telephone systems overlap with mobile cellular systems for key applications 
In addition to the shift towards digital mobile communications based on GSM, cordless 
services providing limited mobility have rapidly taken up momentum. As a result the 
overlap between applications of cordless systems and cellular mobile systems is 
increasing. 
In Europe the Digital Enhanced Cordless Telephone (DECT) system has been developed 
and is now commercially available (figure 1.4). These systems are now rapidly gaining 
recognition as much more than a system offering limited mobility at the customer 
premises level (home cordless telephone, wireless PBX), since they can also be used as a 
key component within the fixed network as a wireless local loop (WLL). Wireless local 
loops are coming into their own in Central and Eastern Europe where they are seen as a 
cost-effective way of extending the fixed network service in urban areas to shorten 
waiting lists from years to months and weeks. In Hungary, for example, more than 
200,000 homes are being connected via WLL systems. Mobile technologies have also 
been used in sparsely populated regions of the Community, for example in parts of Spain, 
to complete network build out by providing a fixed telephone link via a wireless 
connection. Moreover, GSM-based solutions are being considered in certain countries of 
Central and Eastern Europe as an alternative to wired local loop. 
Furthermore, digital wireless systems such as DECT can also provide the public with 
limited mobility services (e.g. limited range, some system are also limited in their 
capability to hand over calls between network cells) as a low cost alternative to full-
fledged cellular mobile systems. This may be attractive in densely populated areas. In 
other parts of the World, the Public Access Cordless System (PACS) and the Personal 
Handyphone System (PHS) are enjoying considerable success. This is particularly 
noticeable for the PHS system in Japan which was introduced in 1995 and which now has 
18 In the USA auctioning of spectrum for personal communications services did not link the frequency 
awarded to a choice of a specific technology. This can be perceived as allowing market players 
greater freedom in determining the use of allocated spectrum. The result is that at least three digital 
technologies (PCS 1800, D-AMPS and IS-95/IS-54 CDMA) are being deployed in different areas but 
with no guarantee for solutions that offer country-wide roaming. 
19 See Article 11(2) of Directive 97/13/EC of the European Parliament and the Council on a common 
framework for general authorization and individual licenses in the field of telecommunications 
services, 10.04.1997, OJ LI 17, 7.5.97 
close to 6 million users. It is principally used as a low cost public limited mobility 
service (figure 1.5). 
A combination of mobile communications and wireless technologies offers the prospect 
of real competition in the local loop 
Beyond a role in extending universal service in both remote and urban areas, the 
combination of mobile services priced to compete more directly with services offered on 
the public fixed network and the use of wireless connections into homes and businesses 
provides a means of extending competition into the local loop. 
In several OECD countries, new subscriptions to mobile telephony now exceed those for 
the fixed network, reflecting high penetration of both mobile and fixed services. 
Increasingly, users can be expected to replace their fixed connection with a mobile 
phone. In the near future, mobile and wireless-based networks alongside cable TV 
infrastructure, where it exists, could therefore offer users real alternatives to using the 
incumbent's network today. 
Satellite-based mobile systems offer the prospect of world-wide roaming and can 
complete the gaps in regions with less developed communications networks 
The prospect of global mobility is now offered by Satellite-based Personal 
Communications Systems (S-PCS) which will be launched over the next two years, in 
many cases using hybrid terminals, which support both the satellite service and terrestrial 
mobile services. These systems not only provide the possibility for users to remain in 
contact whilst travelling in parts of the World with relatively undeveloped 
telecommunications networks, but also offer users a potential means of accessing 
broadband capacity. 
Digital Mobile Services are evolving in response to user needs 
The GSM family of technologies is continuing to evolve to meet users needs for 
further mobility and greater support for data and Internet based services20: 
• The GSM Triband phone - a hybrid terminal that can operate on GSM-900, DCS-1800 
and PCS-1900 environments - is currently under development. It will allow users to 
communicate via any of these networks providing that the appropriate roaming 
agreements are in place. 
• Hybrid GSM/PHS and GSM/CDMA handsets have already been developed and 
demonstrated. Moreover, Japanese industry is developing a GSM/PHS convergent 
approach on infrastructure. 
• New multimedia functionality is being developed for GSM beyond the present 
applications of voice and data transmission at 9.6 kbit/s21. One such development is 
20 See for instance "UMTS Market Forecast", Analysys / Intercai Report, February 1997 
2 ' Higher rates are possible with the use of multiple time slots, but such developments would require 
considerable additional bandwidth. Multi-slot GSM is currently under development. 
High Speed Circuit-Switched Data (HSCSD), recently standardised, and with 
equipment due in 1999. 
• The development of "Mobile Internet" is central to the further take up of mobile and 
wireless services. Work is underway to extend mobile multimedia capabilities22 and 
to improve the support for Internet-based services within the Internet Protocol23. A 
merging of IP technologies into wireless services is foreseen in the new General 
Packet Radio Service (GPRS) due out from ETSI in 1998, with products anticipated 
for 2000. 
Global developments serve the broad strategic interests of the different parts of the 
World 
The developments around the World in mobile and wireless communications and 
satellite-PCS do not stand by themselves but must be seen in a wider strategic context. 
The anticipated shift of market paradigm from a mobile communications market focused 
on business and niche users to a mass consumer market is already visible. In Japan this 
has led consumer electronics companies, who traditionally have strength in consumer 
markets, to embrace mobile and wireless communications. They are now engaged in 
large scale production of new communications systems (e.g. PHS), equipment and 
handheld devices that will eventually be targeted at the World's mass markets. 
The US enjoys a position of strength in satellite communications, mainly due to the large 
defence spendings in this area over the last decades. New commercial initiatives such as 
Iridium and Teledesic build on this strength and are already under construction or are in 
the planning phase. Where Iridium, planned for commercial operation by 1998, aims 
mainly at the mobile user, the ambitions of Teledesic reach much further as it aims to 
create a satellite-based information super highway around the globe that potentially 
makes terrestrial networks superfluous. 
Europe must keep abreast of these global developments and exploit its strengths, such as 
the near global reach of GSM technology and its traditional capabilities in the area of 
communications system integration. 
2.4. Activities at global and regional level are supporting this evolution 
Action at global level (ITU) 
22 The Mobile Data Initiative (MDI) has been joined by many manufacturers and operators. Its aim is to 
test protocols for data communications between PC's including hand-held PC's over the GSM 
infrastructure.-
23 There seems to be a consensus emerging among industry players that the Internet Protocol (TCP/IP) 
on which Internet services are based already today could become the leading transport protocol for 
future multimedia services and applications. 
• At the WARC 92, a range of 230 MHz of spectrum in the 1885-2025 and 2110-2200 
MHz bands was identified for FPLMTS24, including its satellite-based component. As 
a result, Europe and Japan today are considering identical spectrum allocations for the 
third generation terrestrial mobile services whereas the US allocation differs from this 
choice. However, WARC 92 identified spectrum for mobile services in general rather 
than linking specific frequencies to designated technologies. This has allowed some of 
that spectrum in the USA to be awarded to second generation systems, commonly 
referred to in the USA as PCS systems. This evolution is likely to impact on the 
ability to designate a common frequency band for UMTS throughout the World. This 
may lead to fragmentation of the World market, hindering the development of UMTS 
as a global system. 
• Work at an international level within the International Telecommunications Union 
(ITU) is underway on the development of International Mobile Telecommunications 
2000 (IMT2000), previously designated as FPLMTS. A special task group (TG8/1) 
has been constituted, where proposals for future mobile communications systems, 
emanating from different World regions are discussed. The European voice within this 
framework suffers however from a lack of coherence and common perspective, given 
some of the uncertainties surrounding the precise definition of third generation mobile 
communication systems. 
• A regular dialogue on future mobile systems between regulators and industry from the 
European Community, the USA and Japan has continued within the framework of the 
FAMOUS25 meetings. 
Action at European level 
• In the context of the world-wide growth of mobile wireless markets, manufacturers, 
operators, research institutes and academia have carried out significant research and 
development activities, particularly in the framework of the European Community 
Research Programmes such as RACE (Research and Technology Development in 
Advanced Communications Technologies in Europe) and ACTS (Advanced 
Communications Technologies and Services). In the period 1991-1998, some 180 
MECUs of Community funding will be devoted R&D on mobile, wireless and 
personal communications including both terrestrial and satellite based systems. 
• Within Europe, building on broad industry support and with the assistance of the 
Commission, the UMTS Forum has been set up to involve a wide spectrum of 
interested parties in developing strategies for UMTS26. The Forum is developing a 
24 FPLMTS: Future Public Land Mobile Telecommunications System. Within ITU standardisation 
activities, this acronym is now replaced by IMT2000 (International Mobile Telecommunications 
2000) 
25 FAMOUS: Future Advanced Mobile Universal System, established in 1991 annual meetings between 
US, Japan and the EU administration representatives to exchange about future mobile systems in 
particular in view of ensuring interoperability. 
26 The UMTS Forum was formally inaugurated on 16 December 1996 building on the existing work of 
the UMTS Task Force. The Forum brings together regulators, operators, manufacturers, satellite 
10 
common vision of UMTS and seeking to identify precise industry and user 
requirements, including specific needs with regard to frequency spectrum. A first 
report is to be issued by June 1997. 
The European Radiocommunications Committee has recently published a draft 
decision for public consultation on the frequency bands for the introduction of the 
UMTS, within the CEPT countries. The draft decision proposes to designate the 
1900-1980 MHz, 2010-2025 MHz and 2110-2170 MHz bands to terrestrial UMTS 
applications. It also proposes that at least two blocks of 30 MHz of spectrum are 
made available by 1 January* 2002. Requirements to make additional frequency 
available within those bands are made subject to market demand. 
The consultation period on the decision closes on 30 May 1997 and a final decision, 
taking account of comments made, is expected to be taken in June. That decision is 
only binding on those countries which decide to sign up to it. 
ETSI has defined certain broad characteristics for third generation terminals and 
networks. Work on the definition of UMTS has been carried out for a number of years. 
Recently ETSI published its Global Multimedia Mobility (GMM) concept. That 
concept makes an important contribution to the process of definition of UMTS. A 
work plan has been proposed that calls for the development of two phases of UMTS 
with a first phase leading to the introduction of UMTS services by 2002. Major 
decisions are expected to be taken early next year on the air-interfaces to be adopted 
for UMTS. 
operators and other interested parties and associations such as ETSI, ERO and ETO. It is financed via 
its 70 members and has an annual budget of about 500,000 ECU. 
11 
ETSI Objectives for UMTS 
1. Integration of residential, office and cellular 
services into a single system and one user 
equipment (terminal) 
2. Speech and service quality at least 
comparable to current fixed networks, 
including security that cannot be 
compromised in mobile use 
3. Service capability up to multimedia 
4. Separation of service provision and 
network operation 
5. UMTS user number independent of 
network or service provider 
6. Capacity and capability to service the 
whole population 
7. Seamless and global radio coverage 
achievable 
8. Radio bearer capabilities up to 2 Mbit/s 9. Radio resource flexibility to multiple 
networks and traffic types within a 
frequency band 
10. High frequency spectrum efficiency 
11. Creation of direct satellite access for a 
mass user base 
12. Use of WARC '92 frequency 
bands(1885-2025 and 2110-2200 MHz) 
13. Low cost of services and terminals 
14. Flexible personalization, ease of use 
15. Flexibility for the introduction of new 
services and technical capabilities 
16. Applicability to different needs; public, 
private, basic telephony for simple 
telecommunications; broadband 
multimedia for advanced 
telecommunications 
Source: ETSI TA 24, report on Global Multimedia Mobility (GMM) 
12 
3. THE FURTHER DEVELOPMENT OF MOBILE COMMUNICATIONS: 
KEY CHALLENGES AND QUESTIONS 
3.1. Major challenges for future mobile communications 
The information and communication technologies industries are a critical component of 
the European economy in that they are a major and growing part of industrial activity. 
They are also one of the keys to future competitiveness of industrial processes, products 
and services and a platform for the emerging Information Society. If Europe is to build on 
the success of GSM, two challenges need to be addressed: 
Meeting the changing user needs for mobile services 
• Further developing the conditions for industrial competitiveness within the mobile 
communications sector 
Achieving these goals will be important not only for the telecommunications sector, but 
also for the broader economy. Improving the competitiveness of the European mobile 
industry will also help it to build further on its leading position in global markets for 
mobile communications technology and services. 
3.2. A new environment for UMTS 
Environment when GSM was introduced 
(late 80ies) Environment today 
(late 90ies) 
small market 
niche market for specific users 
mobile voice transmission only 
monopoly network operators 
mobile as stand-alone service 
(terrestrial only) 
regional market 
limited technological innovation resulting 
in high cost and limited service offering major market 
mass market, common service 
diversified services (still increasing) 
competition (two to three national 
networks in most Member States and 
increasing) 
integration of services 
(fixed, terrestrial mobile, satellite) 
globally competitive market 
vast range of new technological 
possibilities (higher integration, 
compression technologies, efficient 
frequency usage, low energy innovations) 
resulting in lower cost of services and 
equipment 
13 
In attempting to chart out a path for the successful transition from second to third 
generation mobile technologies, lessons can be learned from the early transition from 
analogue systems to GSM. At the same time, it is essential to recognise the radical 
reshaping of the environment for mobile communications over the last 5 years against 
which any strategy for transition must be planned. 
The changed environment means that there are a range of possible scenarios for the 
evolution towards third generation systems which may present alternative or 
complementary routes to shape the future mobile sector. 
Timely decisions by industry (i.e. what investments to make, which services to offer, 
which markets to target, whether to focus on developing existing services or to move 
towards more innovative approaches?) will be fundamental in determining the actual 
evolution which will take place. Given the specificity of the telecommunications sector 
(e.g. need for interoperability of networks, allocation of scarce resources) public 
authorities have a particular responsibility to ensure that appropriate decisions are taken in 
order to foster the development of those services and help establish a competitive 
European industry. 
A clear and relatively detailed picture of future developments is needed before it will be 
possible to fully define what action, if any, may be required at a European level to make a 
positive contribution to the future development of mobile and wireless technologies. 
3.3. Core issues for future decisions : key questions 
Five key questions underpin the decisions on an appropriate regulatory response to 
UMTS. They relate in particular to timing, method to be followed and consequences that 
decisions might have on Europe's industrial competitiveness. 
Is this the right moment to define a strategy for the introduction of UMTS or would 
regulatory action today be premature? 
// seems clear that changing user expectations, particularly in areas such as 
multimedia services, will add a new dimension to the services that will be required. 
At the same time, the fact that new technologies exist and can be demonstrated today, 
is no guarantee that new services will be accepted by the market or even needed by 
users. This would suggest avoiding a regulatory action at too early a stage. However, 
delaying action may jeopardise the evolution towards UMTS and potentially 
endanger the leadership currently enjoyed by European industry. 
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 ? 
The current GSM generation is still evolving to offer users improved and diversified 
services within an existing technological framework, as new technological 
possibilities are gradually exploited Will the transition towards the next generation 
of mobile services take place through step by step improvements in GSM technology 
or will it at some stage require a shift from GSM to a new system offering more 
capacity and data rates from the start? Could intermediate solutions develop, which 
would combine elements of the two approaches, such as the use of different air 
14 
• interfaces within a common integration platform? Will UMTS be designed as a 
comprehensive system, with users picking the service elements that they require, or as 
a number of technical solutions which whilst interoperable could each require 
specialised terminals? 
What should be the respective roles of the private sector and of public authorities in 
the transition towards UMTS? 
// is clear that the private sector must take the lead in creating a new mobile 
environment. Nevertheless, consideration must be given to the role that public 
authorities at a national and Community level can play in creating an environment 
which can foster the market-led development of new systems and the offer of greater 
choice at lower prices for users. What degree of consensus on the definition of UMTS 
is necessary in order to allow appropriate political decisions to be taken ? 
How can UMTS impact on the competitiveness of Europe's industry? 
Should spectrum management policy give priority to the development of UMTS over 
other mobile and wireless technologies ? In the affirmative, how would this impact on 
Europe's ability to retain a competitive telecommunications industry at the global 
level? 
The market is developing at an extremely rapid pace around the world This includes 
developments in both mobile and wireless systems as well as developments linked to 
"Mobile Internet". In this respect, what would be the right date of introduction of 
UMTS ? Are the dates proposed by ETSI (pilot introduction by 2002 and a full scale 
deployment by 2005 of UMTS) appropriate ? 
How should we ensure that the broader social and societal interests are secured in the 
development of the "wireless information society"? 
Mobile and wireless communications are considered to be an important means of 
bringing the information society to the mass market. Are any further measures 
required to guide the sustaintable development of the "wireless information society" 
and, if so, what issues should be addressed? For example, are further measures 
required to ensure that all European citizens can access these new services and 
technologies? How should pan-European roaming, which is one of the great 
accomplishments of GSM, be extended into the future mobile multi-media age? 
The take up of the "wireless information society" will also depend on the perception 
by the general public that radio communications equipment is safe to use. Further 
research to collect additional data in this field is planned.27 
27 The Commission is currenUy creating a research programme into the possible health effects related to 
the use of mobile phones. This follows the recommendations by an independent multi-disciplinary 
group of experts that reported last year that currently available studies and existing literature give no 
evidence of any increased health risk, but also that data is sparse and insufficient to draw firm 
conclusions at this stage and that further research is necessary in particular into the a-thermal effects. 
15 
3.4. Creating conditions for development: key questions relating to the role 
of public authorities 
The Regulatory Framework: 
The European Community has put in place a comprehensive framework securing the full 
liberalisation of the telecommunications sector from 1 January 1998. This framework 
covers both fixed and mobile communications services. The framework is designed to be 
technology neutral and flexible enough to accommodate new technological and market 
developments. In the light of UMTS, that framework should nevertheless be examined to 
decide whether the introduction of UMTS necessitates modifications in the regulatory 
approaches in the medium term: 
Does UMTS require further changes to the overall regulatory framework for 
telecommunications? 
The comprehensive and predictable framework for competition within the internal 
market addresses key aspects of licensing, interconnection, universal service as well 
as the allocation of numbers and frequencies. It attempts to create a framework which 
may apply to undertakings providing services via fixed, mobile and wireless 
connections. A first priority must be the effective transposition of current EU 
legislation and effective and timely implementation of decisions reached on frequency 
issues with the European Radiocommunications Committee. 
A key principle within this framework is the creation of conditions for the delivery of 
innovative services. The framework also opens up the process of awarding frequency 
and/or licences by preventing Member States from automatically granting licences to 
current operators, but at the same time it prevents the automatic exclusion of such 
operators from getting licenses for new or additional mobile systems, except where 
excluding them can be justified to prevent the creation or extension of a dominant 
position in an existing market. In the light of the developments in the market, aspects 
related to the provision of universal service may need to be reconsidered in the future. 
Does UMTS present particular competition issues which should be addressed at a 
European level? 
One of the major issues concerning fair market competition relates to the issue of 
roaming. At least in the initial stages of deployment, UMTS systems may have to seek 
roaming arrangements with GSM networks in order to provide a sufficient degree of 
national and international coverage. Being based on commercial agreements between 
operators, the refusal to enter into roaming agreements with UMTS operators would 
be a major deterrent to use of UMTS systems. It might also constitute an anti­
competitive practice under the EC Treaty competition rules. At a later stage, roaming 
will take on a new dimension as different mobile and/or fixed service segments 
converge. This will require a careful monitoring of roaming arrangements. 
Frequency issues related to UMTS: 
16 
• What are the spectrum requirements for UMTS? What decision should be taken in 
respect of spectrum reservation in view of UMTS ? 
Within the spectrum designated at WARC 92 for mobile communications, early action 
to allocate precise frequency bands for UMTS is likely to be of critical importance to 
its development within Europe and World-wide. In this context the Commission is 
watching carefully the comments and reactions to the proposed ERC decision 
mentioned above. 
Approaches to frequency allocation for second generation systems were different in 
the EC and the USA. The timely decision concerning GSM frequency allocations and 
the clearing out of these frequencies by Member States by a pre-determined date was 
central to GSM's success. In the USA, on the other hand, a number of digital 
standards remain in competition and the licensing of PCS spectrum has not been 
linked to the use of a specific technology. What balance needs to be achieved in view 
of UMTS between an early allocation of spectrum for UMTS and the need to keep 
open the possibility of competition between future mobile systems in view of the 
benefits this might develop in terms of innovation, service quality and choice? By 
when are decisions on frequency allocation required? Should frequency allocation be 
service related (e.g. for multimedia mobile services) or technology oriented (i.e. to 
allow for one or several interoperable technologies) ? 
What priorities can be identified for Europe in relation to UMTS at forthcoming WRC 
meetings? 
Whilst important decisions were taken at WARC 92 in relation to spectrum for 
FPLMTS, consideration should be given in the light of the evolving concept of UMTS 
to ensuring that a clear European perspective is developed in advance of forthcoming 
WRC meetings. Clear decisions on frequency bands will be essential to the 
development of future systems and to show a clear political commitment to third 
generation systems, even if the choice of technology(ies) for such systems is 
determined at a later stage. 
Standardisation related questions: 
Does UMTS create new priorities or a need for new approaches in the area of 
standardisation? 
As the basic shape of UMTS or other third generation systems emerges, ETSI is likely 
to continue to play a central role, in close co-operation with the UMTS Forum and 
other interested parties in determining the precise requirements for standardisation. 
How can it be ensured that this process remains sufficiently open to develop a broad 
consensus amongst interest parties both within and outside the Community? 
How can it be ensured that the development of UMTS strikes the right balance 
between formal, open standardisation, where this is appropriate (and which implies 
certain minimum time periods for adoption), and industry-developed de facto 
standards of a more proprietary nature which may often develop more ai a pace 
17 
commensurate with the rapid life cycle of the information technologies and services 
which UMTS is likely to offer? 
GSM is a comprehensive and open standard allowing for the evolution towards 
different service forms while maintaining the integrity of the GSM platform. To what 
extent can or should such an approach be applied to the UMTS concept ? 
• Does UMTS require a redirection of standardisation from telecommunication per se 
towards information technology ? 
How can the standardisation activity be sufficiently redirected from a 
telecommunications and network-centric approach to take into account the very rapid 
developments on the services side, e.g. to take into account the demand for mobile 
access of internet / intranet services (in the TCP/IP world) and multimedia services in 
general ? 
18 
Research and Development: 
Which are the strategic technological R&D goals which should be pursued in the 
framework of mobile and personal communications ? 
In the context of the 3rd and 4th Framework Programmes for Research and 
Development, a significant contribution has been made at European level towards the 
development and validation of the essential technologies, components, systems, 
networks, services and applications for mobile and wireless communications. Such 
efforts have contributed to maintaining European technological leadership in this 
area. However the fast pace of developmenst and the increasingly significant role to 
be played by terrestrial and space based wireless communications points to the need 
to strenghten the research and development efforts in this sector within the 5th 
Framework Programme. The primary objective of the work should be to ensure global 
connectivity in future integrated telecommunications networks, enabling access to 
broadband multimedia communications by anyone from anywhere, at any time, using 
mobile and wireless services with a capability and quality comparable to that of the 
fixed network services. 
What level of R&D efforts are to be foreseen in the context of preparing UMTS ? 
R&D is an important issue in that it creates scientific and technological excellence 
while contributing to the definition of an early consensus on the most significant 
technological options. That consensus feeds the downstream standardisation process 
and enhances the competitiveness of Europe. To what extent have technologies needed 
for UMTS been sufficiently examined in the context of R&D efforts and / or what 
further R&D is needed ? 
International aspects: 
What should be the European Community's priorities for co-operation in relation to 
UMTS ? 
Third generation systems development must necessarily take account of proposals for 
regional and global service concepts, as well as the WTO Telecoms deal. 
Commitments have been made by more than 60 WTO members in relation to issues 
such as market access for mobile services and frequencies. In this context, the 
European Community and the Member States, operators, manufacturers and services 
providers must actively co-operate with bodies and companies at a global level in 
order to ensure that future systems meet user demands for a high degree of global 
interoperability and are compatible with the WTO commitments taken. Given the 
development of a concept for UMTS in Europe, where should initiatives for global or 
regional co-operation be envisaged and on which objectives should it be focused ? 
19 
How can a UMTS concept developed within Europe be best promoted in international 
organisations ? 
The Commission supports continuing co-operation in the area of frequency allocations 
for third generation digital systems and wireless local loop systems and in the area of 
standardisation. How can Member States best ensure in accordance with the EC 
Treaty the co-ordination of their positions in international organisations and fora 
where decisions concerning frequencies are taken ? How can global Co-operation in 
the field of standardisation be reinforced ? 
How can existing exchanges by the Member States and the Commission in the 
framework of regular contacts with third countries be best used to promote European 
positions concerning the future mobile systems ? 
20 
4. CONCLUSIONS 
After the successful creation of an environment for second generation digital mobile 
cellular communications systems, demand for further evolution in mobile and wireless 
systems is now emerging. Users place emphasis on the integration of mobile 
communication applications, higher performance (in particular accommodating 
multimedia applications), global and seamless coverage of wired and wireless services as 
well as greater customisation of services. 
At this stage, many uncertainties remain as for the concrete specification of the next 
generation wireless system, but the process of discussion among market actors and within 
the standardisation bodies has been launched. Results, in particular from the UMTS 
Forum and ETSI, will be particularly important for the definition of a UMTS concept(s). 
In this context, the legitimate interests of the European manufacturers and operators must 
be balanced with the interests of the users. 
The Commission has identified several areas in which an approach at a European level 
could be important, namely, regulation, standardisation, frequency allocation, R&D 
efforts and international co-operation. The objective is to create a framework which leads 
to greater choice, improved quality and lower prices for all users of mobile services, 
while ensuring full competition within an environment which foster the competitiveness 
that the sector achieved so far. 
The recent evolution of the regulatory environment in view of the full liberalisation of 
telecommunications has provided a comprehensive framework for both fixed and mobile 
telecommunications systems. It will be important to assess the flexibility of that 
framework against the new demands which the emergence of a UMTS concept may place 
upon it. The same applies for the decision on priorities for standardisation and choices 
concerning the most suitable allocation of frequency bands in the spectrum so far 
reserved for UMTS. The current ERC consultation process will form an important 
contribution in this respect. 
At international level, the Commission supports the co-operation in the area of frequency 
allocation and of standardisation for third generation digital systems through the 
appropriate organisations on the basis of the UMTS concept currently under discussion. 
This communication is intended to extend to all interested parties the discussion on the 
future of UMTS which has already been initiated within the industry. Comments and 
opinion are invited on all questions raised in the Communication. On the basis of the 
response to this communication and other relevant factors, the Commission will propose, 
if and where appropriate, the adoption of measures by the European Parliament and 
Council. 
Comments28 should be sent at the latest by 15 July 1997 to the European Commission, 
DG XIII/A/1, rue de la Loi 200, B-1049 Brussels, to the attention of Mr. de Cockborne 
(fax + 32 2 296 8391) or by e-mail to: umts@bxl.dgl3.cec.be. 
28 Comments will be made available to the public, unless a specific request to the contrary is received. 
21 
Annexes 
<fr 
TABLE OF CONTENTS OF ANNEXES 
ANNEX I: MOBILE COMMUNICATION IN EUROPE IN FIGURES 24 
ANNEX II: THE REGULATORY FRAMEWORK FOR MOBILE 
COMMUNICATIONS 27 
ANNEX III: OVERVIEW OF FREQUENCIES FOR MOBILE 
COMMUNICATIONS 29 
ANNEX IV: LIST OF ACRONYMS 33 
23 
ANNEX I: MOBILE COMMUNICATION IN EUROPE IN FIGURES 
Sep-93 Mar-94 Aug-94 Mar-95 Sep-95 Apr-96 Sep-96 Mar-97 
| Analogue ^iDlllltal —^—Penetration 
source: Mobile Communications 
Figure 1.1 : Growth of European Mobile Communication Subscribers 
U.K. 
Switzerland 
Sweden 
Spain 
Portugal 
Norway 
Netherlands 
Luxemburg 
Italy 
Ireland 
Iceland 
Greece 
Germany 
France 
Finland 
Denmark 
Belgium 
Austria ,. £ 
\vfc>". 
. .. v.- . .-- „•-..,-«, 
*.*>, Mn*.-,*. - !•» 
•î ••; .\*'V" ; 
*!'.*<\^ ',& , '." 
- -,. 
-
15 20 
% of population 25 
source: Mobile Communications 
Figure 1.2: Penetration rates for mobile communications per Member States 
(as of March 97) 
24 
-5-k 
E4| 
* 3 
2 M 
i -H Digital share of the market - 53% 
D , n, n 
E T> a 
CO 
I Analogue subscribers Q Digital subscribers 
Source: KPMG 
Figure 1.3: European Mobile Communication Subscribers: Analog vs Digital 
total DECT terminal equipment estimates 
30.000.000 
25.000.000 
20.000.000 . 
15.000.000 . 
10.000.000 -
5.000.000 -
0 lIlïllPïiilB 
••'•••" 'liV:'-',:^^^™ "7"" "1 '"' • ^^^^ I •:'^^": 
1994 1995 1996 1997 1998 1999 2000 
source: ETSI 
Figure 1.4: Deployment of DECT in Europe 
25 
source: MPT, Japan 
Figure 1.5 Deployment of PHS in Japan 
26 
ANNEX II: THE REGULATORY FRAMEWORK 
FOR MOBILE COMMUNICATIONS 
Following the 1994 Green Paper on Mobile and Personal Communications, the European 
Community has progressed a vision of a personal communications environment, 
reflecting the increasing convergence of wired and wireless, fixed and mobile solutions to 
meet user needs. In particular, the legal framework29 has established key dates for the 
further opening of mobile Communications throughout the EC. 
KEY DATES FOR THE DEVELOPMENT OF MOBILE SERVICES IN THE EC 
November 1996 
• Notification of the measures taken to suppress of special and exclusive rights for 
mobile telephony ; 
• Notification of the measures taken to lift the restrictions on mobile operators to 
construct their own networks / microwave links and/or use third party-owned 
infrastructure within their mobile networks ; 
• Notification of the measures taken to enable mobile operators to directly interconnect 
their networks with the fixed or mobile network in other EC Member States30 ; 
Before January 1998 
• Applications must be considered by Member States for licences to operate DCS 1800 
services, subject to frequency availability. 
• Current fixed or mobile operators must not be automatically granted new 
frequencies/licences for new mobile services, particularly DCS 1800 services, nor may 
they be automatically excluded from applying for such frequencies/licenses unless it 
can be shown that a grant to the operator concerned would affect effective 
competition, by strenghtening the (joint) dominant position of the current operators. 
Restrictions should be removed, where they exist, which prevent the offering and use 
of multi-mode equipment which allows the same handset to be used across a number 
of different mobile systems, for example, a dual GSM-DECT telephone. 
Furthermore, the development of mobile communications is being fostered by key 
elements of the general liberalisation framework which apply to both fixed and mobile 
29 See, in particular, Commission Directive 96/2/EC of 16 January 1996 amending Directive 
90/388/EEC with regard to mobile and personal communications, OJ L 20/59, 26.1.96. (the Mobile 
Directive); Commission Directive 96/19/EEC with regard to the implementation of full competition in 
telecommunications markets, OJ L74, 22.3.96; Directive 97/.../EC of the European Parliament and of 
the Council on a common framework for general authorisations and individual licences in the field of 
telecommunications services, OJ L...., Directive 97/ /EC of the European Parliament and of the 
Council on interconnection in telecommunications with regard to ensuring universal service and 
interoperability through the application of the principles of open network provision (ONP), OJ .. 
30 Additional .transitional periods delaying direct interconnection until 1 January 1999 have been 
accepted for Ireland and Portugal. Decisions are still pending as for Greece and Luxembourg. 
27 
network operators and service providers. That framework is designed to be technology 
neutral. At the same time it limits regulatory intervention to the minimum necessary to 
safeguard effective competition and secure the general public interest. 
This means, for example, that mobile operators enjoy the right to : 
• interconnect with the public fixed telecommunications networks in their Member State 
benefit from cost-oriented prices for interconnection with the networks of operators 
with significant market power, as well as the right to select unbundled interconnect 
offerings from a standard list, and 
• receive licences on the basis of open, transparent and non-discriminatory procedures 
within set time limits. The ability of Member States to restrict the number of licences 
granted is limited to the scarcity of radio-spectrum or, on a temporary basis, the lack of 
available numbers. 
A key aim of the regulatory framework is to ensure a balance between regulation and the 
degree of competition in particular markets. In placing obligations on market players, 
national regulatory authorities must take account of the position of those players on the 
relevant market and of the degree of competition in the market concerned. So, for 
example, mobile operators are not subject at this stage to as much detailed regulation as 
to service quality or pricing supervision as that imposed on fixed network operators with 
significant market power. Furthermore, in assessing whether mobile networks enjoy 
significant market power the relevant market will often be the whole of the 
telecommunications market rather than just the mobile sector. 
Nevertheless, in other areas mobile operators may already be asked to assume 
responsibilities associated with being a provider (often on a national basis) of public 
telecommunications networks and/or services. 
28 
ANNEX III: OVERVIEW OF FREQUENCIES FOR MOBILE COMMUNICATIONS 
Table III. 1 provides an overview of frequency spectrum used for different mobile 
technologies across Europe. 
Table III.l: Overview of spectrum use by different mobile services in Europe 
Frequency range 
47-88 MHz 
138-174 MHz 
380-430 MHz 
420-470 MHz 
862-960 MHz 
1670-1900 MHz 
1885-2200 MHz Systems 
CT1, paging, PMR, MOBITEX 
first PLMNs31, RC2000, PMR, PAMR (MPT 1327), ERMES, paging32, 
MOBITEX 
TETRA 
RC2000, NMT 450, System C, RTMS, PMR, paging 
TACS, ETACS, NMT 900, GSM, DSRR, CT2, PMR 
TFTS33, DCS 1800, DECT 
FLMTS/UMTS 
Source: KPMG 
Table III.2 shows the harmonised frequency bands allocated to selected mobile systems 
in Europe. The basis for harmonised designation of frequency bands across Europe has to 
date been achieved using two mechanisms: European Community Directives (i.e. for 
GSM, DECT and ERMES) and ERC Decisions. 
Table III.2: Frequency bands designated to selected mobile systems in Europe 
System 
GSM 
DCS 1800 
DECT 
ERMES 
TFTS 
DSRR 
TETRA Frequency allocated 
890-915 MHz and 935-960 MHz 
1710-1785 MHz and 1805-1880 MHz 
1880-1900 MHz 
169.4-169.8 MHz 
1670-1675 MHz 
888-890 MHz and 933-935 MHz 
380-400 MHz for emergency services 
and 410-430 MHz for public services Basis of allocation 
87/372/EEC 
ERC/DEC/(95)3 
91/281/EEC 
90/544/EEC 
ERC/DEC/(92)1 
ERC/DEC/(96)6 
ERC/DEC/(96)4 
Source: European Commission, ERC 
31 Most of them have already been de-activated or are to be de-activated in the short term. 
32 Mainly POCSAG. 
33 Allocation by ITU/WARC92. 
29 
Figure III.l provides an overview of frequency allocated to GSM and analogue services in the 
900 MHz band. 
Figure III.l: Frequency allocated to GSM and analogue cellular systems in the 870-960 
MHz band 
870-
111! 
< 3 
CD 9- "= 
CO 
E § Q tf 
O 8 £ CO 10 
CO 
OJ 
c » S 3 > e 
- - ' 3 -e 
O 5 is <5 
X j= 
"5 
• 2_ * m c c 
2 r a» 
a. a. « — 
i 
CO 
plf frequency used for GSM technology * frequency range not confirmed 
| 1 frequency used for analogue technology 
Source: KPMG 
The use of spectrum in this band is relatively uniform between the various 
countries. Some countries have taken frequency harmonisation to its limit and fully 
co-ordinated their GSM frequencies. In this manner, interference problems are 
minimised and both users and operators experience fewer problems. 
Although there is co-ordination in the use of spectrum, there are large differences in 
the amount of spectrum allocated to operators in different countries and even to 
different operators within the same country. In some cases, differences can be 
justified between countries due to different market conditions, in particular as 
regards the use of analogue systems around 1990 when GSM was introduced. 
But it is harder to justify differences within countries. Very often, an incumbent 
operator with a mobile subsidiary will capitalise on access to both analogue and 
digital frequency bands. In this way, a private operator in the same country is at a 
significant disadvantage. 
30 
Figure III.2 shows the frequencies in use for mobile communications in the 1800 MHz band. 
Source: ERO 1995 
Figure III.2: Frequency allocation and use for mobile cellular systems in the 1800 MHz 
band 
The implementation of DCS-1800 is still in its infancy compared to GSM, though the 
regulatory framework now requires consideration by EC Member States of requests for 
licensing of such systems before 1 January 1998. Outside the EC, many countries, 
particularly the eastern European and Baltic States, do not have any plans to implement 
this technology at all. One of the main reasons for this is that frequencies which have 
been designated for DCS-1800 clash with current frequency allocations for other systems 
in many countries. 
The 1992 World Administrative Radio Conference (WARC) of the ITU targeted 230 
MHz in the 2 GHz band, on a world-wide basis, for FPLMTS/IMT-2000, including both 
terrestrial and satellite components. The objective was identified as that of establishing, 
through the appropriate global standards and the coordinated assignment of frequencies 
by National and Regional Authorities, truly ubiquitous personal communications created 
be a seamless infrastructure. 
The whole 230 MHz of spectrum identified by WARC-92 was reserved in Europe to 
Third Generation, UMTS, technology. Elsewhere, and especially in the US, the situation 
is far more complicated, and little hope exists of ever arriving at a common global 
standard with different regional solutions already subsumed. 
Figure III.3 shows the allocation of spectrum for future mobile communications and the 
current situation in the various regions of the world. 
31 
MSS- Mobile 
Satellite System 
1700 2 4 6 8 1800 2 4 6 8 1900 2 4 6 8 20OQ 2 4 6 8 2100 20 40 6 8 220020 40 6 8 
-9 « 8—6j 1 0—0 9—8| 1 8.—0i 9, 8r—i 8. 8.—8i—8t 1 1 1 a—Si 1 1 1 a—a 
M MHz WARC 92 FPLMTS MSS 
190 MHz 
DCS1800 •! DCS 1800 
liplihk UMTS MSS UMTS 
Up Éùràpk 
downlink 
USA 
19P MHiz 
UÂPÀN FPLMTS MSS 
UMTS MSS 
Dwn 
1117 
Figure III.3: Frequency allocation for future mobile communications (FPLMTS) around 2 
GHz 
32 
ANNEX IV: LIST OF ACRONYMS 
ACTS 
CDMA 
CEPT 
Administrations 
D-AMPS 
DCS-1800 
DECT 
ERC 
ETSI 
FAMOUS 
FPLMTS 
GMM 
GPRS 
GSM 
HSCSD 
IMT2000 
IP 
ITU 
OECD 
PACS 
PBX 
PHS 
PCS-1900 
RACE 
R&D 
PCS 
S-PCS 
TCP/IP 
UMTS 
WARC/WRC 
WLL 
WTO Advanced Communications Technologies and Services 
Code Division Multiple Access 
European Conference of Postal and Telecommunications 
Digital cellular communications from North America 
Digital Cellular communication System, is like GSM but at 1800 MHz 
Digital Enhanced Cordless Telecommunications 
European Radiocommunications Committee 
European Telecommunications Standardisation Institute 
Future Advanced Mobile Universal System 
Future Public Land Mobile Telecommunications System 
Global Mobile Multimedia, concept developed by ETSI 
General Packet Radio Service 
Global System for Mobile 
High-Speed Circuit Switched Data 
International Mobile Telecommunications 2000 
Internet Protocol 
International Telecommunications Union 
Organisation for European Cooperation and Development 
Public Access Cordless System 
Private Branch Exchange 
Personal Handyphone System 
Personal Communication System, essentially GSM at 1900 MHz 
Research and technology development in Advanced Communications in 
Europe 
Research and Development 
Personal Communication System 
Satellite-based Personal Communications System 
Transmission Control Protocol/Internet Protocol 
Universal Mobile Telecommunications System 
World (Administrative) Radio Conference 
Wireless Local Loop 
World Trade Organisation 
33 

ISSN 0254-1475 
COM(97) 217 final 
DOCUMENTS 
EN 15 16 
Catalogue number : CB-CO-97-259-EN-C 
ISBN 92-78-20736-5 
Office for Official Publications of the European Communities 
L-2985 Luxembourg 
3"1