05 Ecuador

Establishment of 2014
Algeria's
JointNational
Consulting
Vision
with2030
IOs Chapter 21
2014 Joint Consulting with IOs:

Inter-American Development Bank
1. Creating Rural Innovative Strategy for Sustainable Rural

Development in Paraguay
2. Support for Integrated Labor System in Mexico
3. 2014 Joint Consulting with IOs Promotion of SMEs in LAC
through Connect Americas
1. Vision 2030 and Indicator
4-1. Support Analysis
for Road Safety in Dominican Republic
2. Algeria and the Global Economy
4-2. Support for Road Safety in Haiti
3. Current Issues
5. for FacingJoint
KSP-IDB Algeria’s EconomyProject:
Consulting
4.Vision Scenarios
Action Plan for Effective Spectrum Allocation for the Mobile
5. Conclusions
Broadband in Ecuador
Establishment of 2014
Algeria's
JointNational
Consulting
Vision
with2030
IOs Chapter 51
Action Plan for Effective Spectrum

Allocation for the Mobile Broadband
in Ecuador
1. Vision 2030 and Indicator Analysis

2. Algeria and the Global Economy
3. Current Issues Facing Algeria’s Economy
4.Vision Scenarios
5. Conclusions
?
List of Abbreviations
Abbreviation Full Description

DTV Digital TV
DU Digital Unit
List of Abbreviations
eNode-B enhanced Node-B
EPC Enhanced Packet Core
EPS Evolved Packet System
ETRI Electronics and Telecommunications Research Institute
FA Frequency Assignment
FCC Federal Communication Councile
FDD Frequency Division Duplex
FTTH Fiber To The Home
FWA Fixed Wireless Access
GLR Gateway Location Register
GoE Government of Ecuador
List of Abbreviations GPRS General Packet Radio Service

GSA Global mobile Suppliers Association
Abbreviation Full Description
GSM Global System for Mobile communication
3GPP 3rd Generation Partnership Project
HetNet Heterogeneous network
ADSL Asynchronous Digital Subscriber Line
HLR Home Location Register
AF Application Function
HSDPA High Speed Downlink Packet Access
AMI Advanced Metering Infrastructure
HSPA+ evolved High Speed Packet Access
APT Asia-Pacific Telecommunication
HSS Home Subscriber Server
ARPU Average Revenue Per Unit
HSUPA High Speed Uplink Packet Access
AuC Authentication Center
ICIC Inter-Cell Interference Coordination
AWS Advanced Wireless Services
ICT Information and Communication Technology
BS(S) Base Station (Subsystem)
IoT Internet of Thing
BTS Base Tranceiver Subsystem
IDB Inter-American Development Bank
CA Carrier Aggregation
IMS IP Multimedia Subsystem
CDMA-3X Code Division Multiple Access-3X
IMT International Mobile Telecommunications
European Conference of Postal and Telecommunication
CEPT IP Internet Protocol
Administration
International Telecommunication Union Radio-communication
CoMP Coordinated Multi Point transmission and reception ITU-R
sector
CPRI Common Public Radio Interface LAC Latin American and Caribbean Countries
DBDM Dual Band Dual Mode KCC Kore Communications Commission
768•2014 Joint Consulting with IOs : Inter-American Development Bank [IDB] Chapter 5 _ Action Plan for Effective Spectrum Allocation for the Mobile Broadband in Ecuador•769
List of Abbreviations List of Abbreviations
Abbreviation Full Description Abbreviation Full Description

KEXIM bank Export Import Bank of Korea SMSC Short Message Service Center
KICS Korea Institute of Communications and Information Sciences SON Self-Organizing Network
KIEES Korea Institute of Electromagnetic Engineering and Science SGW Signaling Gateway
KISA Korea Internet Security Agency TDD Time Division Duplex
KISDI Korea Information Society Development Institute TPS Transactions Per Second
KSP Knowledge Sharing Program UHF Ultra High Frequency
LAC Latin America and Caribbean UMTS Universal Mobile Terrestrial System
LTE Long Term Evolution USIM Universal Subscriber Identity Module
LTE-A LTE Advanced UWB Ultra Wide Band
M2M Machine to Machine VLR Visitor Location Register
MAP Mobile Application Part VoLTE Voice over LTE
MBB Mobile Broad Band WiBro Wireless Broadband, South Korean service name for IEEE 802.16e
MBMS Multimedia Broadcast Multicast Service WiMAX Worldwide Interoperability for Microwave Access
MIMO Multi Input Multi Output WCDMA Wideband Code Division Multiple Access
MOSF Korean Ministry of Strategy and Finance WIFI Wireless Fidelity
MSIP Ministry of Science, ICT and Future Planning WRC World Radio communication Conference
MSU Message Signaling Unit xDSL x-Digital Subscriber Line
MVNO Mobile Virtual Network Operator
OCS Online Charging System
OFCS Offline Charging System
OFDM Orthogonal Frequency Division Multiplexing
OSS Operation Sub System
PCS Personal Communications Service
PCC Policy and Charging Control
PCRF Policy and Charging Control Rules Function
POTS Plain old telephone service
QoS Quality of Service
RFID Radio Frequency Identification
ROADM Reconfigurable Optical Add Drop Multiplexers
RU Radio Unit
SCTP Stream Control Transmission Protocol
SIM Subscriber Identity Module
Ⅱ. Analysis of Telecommunincation Status and
Policies in Ecuador
According to Field Study, 58% of Ecuador’s economy is service industries so
the foundation for manufacturing industries is rather weak. Ecuador’s GDP for
2014 is expected to be about $96.7 billion, which ranks the country as 63rd in the
Summary world in terms of economic scale. As such, the country is expected to be developed
continuously, resulting a rapid increase in demand for ICT. As Ecuador compares
to Korea, Ecuador’s population is only one third of Korea andthe land of Ecuador
is three times larger than that of Korea, and thereforethe cost of building a new
communications network will be relatively higher than Korea. For this reason an
efficient investment method is imperative. Policy making for telecommunications
and IT industries in Ecuador is conducted by MINTEL while regulations are handled
until this date by SENATEL, SUPERTEL and CONATEL. In 2011, Ecuador announced
its official digital policy for development of its information and communication
industries which it dubbed “ Digital Strategy 2.0 in Ecuador”. It is a master plan that
articulates a national broadband plan implemented under the leadership ofMINTEL.
Ecuador’s national broadband plan established in 2014 aims at providing

universal 1Mbps service to the people from 2014 at monthly fee of $10 per
This project is promoted as a joint consulting project between the KEXIM Bank and
subscriber. By stage, the country has set out a goal to provide wireless and fixed
IDB in accordance with the policy of the Ministry of Strategy and Finance of Korea to
broadband services to 63% and 20% of the total population respectively by 2017.
support developing countries by sharing Korea’s broadband development experiences
Ultimately, the plan calls for providing mobile broadband coveragefor 76.8% of the
for the mobile broadband implementation ofthe Ecuadorian government.
population by 2020. To achieve this, a project to replace backbone networks with
optical networks is being promoted. Accordingly, optical networks covering 224
This report is composed of six chapters. Containing; in Chapter 2, Ecuador’s
Cantons will be installed by 2017. In mobile communications service fields, the top
mobile broadband market, in Chapter 3, studies on global mobile broadband
two mobile carriers are building a 3.5G network of which service is available to only
deployment and comparison with Ecuador’s situation, in Chapter 4, study of Korea’s
around 33% of the parroquias in Ecuador.
mobile broadband improvement strategies and implications suggested and, in
Chapter 5, the establishment of mobile broadband improvement strategies and
In a new mobile communications and Internet service regulation ‘TEL-477-16-
analysis of the expected benefit, in Chapter 6 presents the conclusion of this report.
CONATEL-2012,’ the Ecuadorian government stipulates service providers’ obligation
to ensure users’ rights. As for spectrum policy, the government expressed an
Ⅰ. Introduction intention to introduce an APT 700Hz band, and thus has allocated some to CNT in
2012.
The scope of this project is to survey and analyze the mobile broadband market,
spectrum usage, policies and regulations in force to support policy establishment in As for the status of fixed communications in Ecuador, the country has 2.32 million
Ecuador in order to provide mobile broadband coverage for 76.8% of the nation’s lines and the annual growth rate is around 5% on an average. However, the country
population by 2020, which is the goal of the Ecuadorian government, by drawing needs to make additional efforts in order to fulfill its goal of coverage for 20% of
lessons from Korea’s LTE development cases, and to establish an action plan that the population by 2017. The common carriers are CNT(ranked 1st with a market
includes various LTE-related technological suggestions and spectrum requirement share of 54.5% in 2012), CONECEL and a few other TV cable companies. In terms of
calculations together with policies and regulations at the same time providing a the country’s mobile communications status, Ecuador had 17.97 million subscribers
benefit analysis to Ecuador. as of August 2014 with a rather high penetration rate of 113.32%. CONECEL is the
country’s top-ranking mobile operator followed by OTECEL and CNT. These common market. At the same time, although 1FA (2x5MHz) is being used nationwide
carriers are providing 2G and 3G services at a rate of 84% and 16% respectively. for the 3G spectrum and one additional FA is applied only to specific areas, a
Because of this, it is necessary for these companies to evolve their networks to spectrum shortage is not yet serious in Ecuador. This indicates that Ecuador’s mobile
provide mobile broadband service nationwidely. To achieve this, CNT launched communications market is centering on voice call service and that the shift to data-
commercial LTE service in April, but the market is sluggish. CNT is the only LTE centered service is being delayed.
provider in Ecuador, secured 700 MHz and AWS bands. It started service with AWS
band. In September 2014, CNT had around 850 base stations across the country. On As for mobile communications service, market penetration in Ecuador as of
February 18, 2015 the contract for additional spectrum allocation between the GoE August 2014, was over 110% of the total population and the subscriber count
and representatives of the private mobile operators, Otecel and Conecel SA, signed. is 17.97 million. These figures, however, are largely influenced by multiple
The concession will be valid until 2023. subscriptions for prepaid service utilization. As such, the status of nationwide
network establishment in Ecuador is considered insufficient. By type of mobile
communications service subscription, 80% of subscribers are prepaid service users
Ⅲ. Mobile Broadband Market Status and Compartive with this rate continuously growing. However, nationwide LTE network have
Analysis of Ecuador not yet been established. Therefore, an essential measure for Ecuador’s mobile
communications market as of now is implementation and expansion of a nationwide
The scale of sales in the global mobile communications market was approximately mobile communications service network. From the outside, Ecuador’s mobile
$1 trillion in 2013 and it is forecasted to grow at an annual average of 3.8% through communications market appears to be a structure where three companies are
2017 at which point it is expected to be about of $1.2 trillion. As for data service, competing against one another, such as two global mobile carriers (CONECEL and
continuous annual growth (+of around 12.8%)is expected. However, voice service is OTECEL) and one government-owned company (CNT). However, in terms of the
forecasted to decrease (-3.5%). As such, the global mobile communications market companies’market shares, CONECEL’s share has never fallen below 65% since 2004.
trend is shifting rapidly from voice to data. Accordingly, mobile data traffic is A problem generally associated with such asymmetrical competition is the necessity
increasing sharply. To respond to the rapid increase in mobile broadband demand, to improve the quality of rate plans or services. Nevertheless, for Ecuador, the issue
many countries are striving to establish long-term plans for securing spectrum. of nationwide network expansion must be considered with greater importance.
For this reason, the Ecuadorian government’s policy to promote market entry by
In Ecuador, smartphones havebeen used since the commencement of 3G service. the government-owned CNT for the purpose of improving competition while
However, almost 90% of subscribers are still using 2G service, thus a substantial only the private companies CONECEL and OTECEL are providing 2G (GSM) and 3G
explosion in data traffic has not occurred. During the Field Study conducted by the (WCDMA) services in the market is evaluated as an extremely encouraging policy.
KSP team, traffic-related statistics or projections of the Ecuadorian operators could However, contrary to the original intentions, CNT experienced difficulties in securing
not be found. The Ecuadorian government, however, has allocated a bi-directional subscribers for its 2G (CDMA) service as a result of problems concerning handset
30MHz spectrum in the 700MHz band to CNT, which is considered sufficient for the distribution so, eventually, the government announced that it would suspend of the
LTE market at least during its initial phase. However the spectrum is predicted short service at the end of 2014. To overcome this, the government preferentially allocated
when the LTE is in full service. Therefore, it is now thought that it is necessary for the the 4G (LTE) spectrum of AWS band and 700MHz band only to CNT so as to enable
government to conduct an additional study on the method of traffic and spectrum CNT to start commercial service in January 2014, and thus lead the local LTE market.
requirement calculation. As for the status of spectrum usage, a total of 160MHz of This policy is evaluated highly in terms of promoting competition in the market. In
spectrum was being used in Ecuador as of September 2014 (30MHz for 2G service, the communications market, there are certain facilities that are essentially required
40MHz for 3G ce and 90MHz for LTE). Including the 20MHz allocated to CNT that and differentiated approaches to acquire them may lead to lowering competition.
is not being used, a total of 180MHz has been allocated for mobilecommunications In addition, as the intrinsic characteristic of network externality can lead to the
service. What is noteworthy is that CNT, which has only around 2% market share, occurrence of tipping or locking effects, a monopolistic structure can occur more
has been allocated with the largest spectrum of 110MHz and was the first to provide easily than in other industries. Moreover, with the enormous initial investment
service using the LTE spectrum. This leads to the conclusion that the foundation for cost posing as an entry barrier, and scare and bandwidth different characteristic of
deployment and establishment of a competitive network for CNT has already been spectrum are key determinant of market competition. To promote fair competition,
prepared. In addition, in terms of a competitive structure, CNT’s competitive role is careful regulatory intervention by the authorities is necessary. Considering such
considered an important element in activating Ecuador’s mobile communications
market characteristics, the key tools for the current spectrum management policy introducing various content and price programs together with a range of premium
that can be applied to promoting fair competition are introduced. In addition, it packages.
is necessary to establish an optimal plan for competition-related policy making by
considering the market characteristics described above and different environments The third-ranking company, LGU+, started LTE service concurrently with SKT in
of each country. Under circumstances where a market structure is not established, July 2011. LGU+ was the most active at promoting LTE service, and thus completed
policy making for establishment of a fair competition environment must be taken a nationwide network in 2013. For advancement of the transmission network, the
into consideration with regards to resource allocation at all times together with the company shifted its network to a carrier ethernet network. Based on the difficulties
primary goal of efficient radio wave utilization. the company experienced in the 3G market as a result of the lack of a WCDMA
network, LGU+ has been aggressively deplying its broadband network and plans to
quickly introduce triple-band CA for its LTE service. At the same time, LGU+ is striving
Ⅳ. Case Study of Mobile Broadband Service in Korea for fixed and mobile integrated product development with IPTV services while also
securing high-performance smartphones. LGU+, which has always been the third-
The number of mobile communications subscribers in Korea was 54.82 million ranking company, has climbed to a No. 1 position in terms of percentage of LTE
in January 2014, which represents of 109% in comparison to the population. Of the subscribers rate through active investment and marketing in the LTE market, and
subscribers, 96%, which is 43.73 million, are mobile broadband subscribers. As for thus is currently recording the highest average ARPU. As a result of LGU+’s extensive
market shares by service provider, SKT, KT and LGU+ are claiming shares of 50%, investment in its LTE network and aggressive service expansion, SKT and KT, which
30% and 20% respectively. The number of LTE subscribers is approximately 30.87 had been passive about investment, started modifying their strategies. As a result,
million and monthly LTE traffic volume is 66,613TB. The three common carriers are 70% of the population in Korea is using LTE service at present. Such an achievement
investing in a slightly over 100,000 radio unit(RU) to provide nationwide coverage. has been possible as a result of LG Group’s extensive network investment and
sourcing of handsets through LG Electronics.
Korea annually pubilishes a report on the environment of users “patterns of
Internet and smartphone utilization.” This report provides information about
how people started using smartphones, the areas of service utilization and the V. Establishment of Mobile Broadband Improvement
preferred applications. The most popularly used services are those for alarms and Strategies for Ecuador and Analysis of the
timekeeping and the most frequently downloaded mobile applications are games Expected Benefits
and entertainment applications. Games and entertainment applications are also the
most frequently used mobile applications. As for spectrums available for mobile broadband service in Ecuador, there are
many surplus spectrums in IMT candidate, such as 700MHz, 1.8GHz and 2.6GHz. LTE,
As for the cases of mobile broadband buildout by mobile carriers in Korea, SKT, which with 700MHz band, is too narrow to accommodate broadband services by
which is Korea’s top-ranking service provider, introduced the nation’s first LTE system three service providers. However, it is advantageous in terms of securing nationwide
in July 2011 and started providing 20MHz broadband LTE-A service using CA(Carrier network coverage. As traffic increase is not yet being observed, Ecuador will need to
Aggregation) in 2014. With a strategy to disperse data traffic using a hierarchical focus on building a nationwide network in the short term by resolving the duopoly
solution, this company uses both WiFi and WiBro networks. SKT plans to improve in the market rather than the expansion of LTE-advance.
the service speed up to 300Mbps by introducing triple-band CA. In addition, the
company is active in introducing and using mobile networks in HetNet, SON and There are two goals for spectrum allocation. One is to provide a nationwide
smart cloud structures. LTE mobile broadband and the other is to establish a fair competition system. This
is because, although mobile communications network penetration in Ecuador
KT (Korea Telecom), the nation’s second ranking company in mobile business, has exceeded 100%, an essential measure for Ecuador’s mobile communications
launchedLTE service in January 2012, the latest of the three main service providers. market at the moment is implementation and expansion of a nationwide mobile
However, the company experienced a problem with band utilization as a result of communications service network because nationwide LTE networks have not been
interference in the allocated 900MHz band. And for broadband LTE, KT started established in the country. To fulfill these goals, it is important to expand the AWS
providing the service in the 1800MHz band in 2013. In 2014, the company expanded and 700MHz band allocated to CNT into a nationwide LTE network and, based
service to include broadband LTE-A. To regain leadership in the LTE market, KT is on this, to accelerate competition for network establishment between the top
two companies. To accomplish this, it is recommended to establish the following determine whether this system is up to a standard to solve the distorted competition
strategies and roadmaps. environment in Ecuador. In addition, in terms of spectrum fees for granting licenses,
a plan to give special benefits to companies that build nationwide networks
A. Securing Nationwide LTE Network Coverage can be considered. Connection fee de-symmetrization through interconnection
improvement is to partially change connection rates with a goal to resolve reverse
In Ecuador, rapid traffic increase has not yet been observed, therefore a short- discrimination of the estimation of connection fees between first comers and late
term focus must be placed on building a nationwide network by resolving the movers in the market, and thus introduction of the system to Ecuador is considered
duopoly issue rather than through LTE-advance expansion. In other words, as a necessary as it will be helpful for improving the competition environment in the
preferential goal for Ecuador is to expand the nationwide mobile communications country.
network, a policy to support broadband Internet diffusion by 1) placing a greater
emphasis on mandatory coverage and compliance rather than maximization of Ecuador has beenmanaging its own fund known as FODETEL (Fund for
frequency auction profits, 2) providing frequencies with satisfactory radio wave Telecommunications Development in Rural and Marginal Urban Areas) in order to
characteristics, 3)mandating facility sharing and 4) creating a competitive structure support communications infrastructure in underdeveloped areas since 2000. Rules
through roaming based on fair competition and mandatory designation of the top for administration of FODETEL are applicable and these rules include the goals of
two-ranking companies as MVNOs that is necessary for granting broadband licenses FODETEL, the operating policy according to MINTEL and various clauses concerning
and creating a market rather than promotion of broadband LTE until the goal is agreement with and financial support to service providers. As for matters required
fulfilled. To accomplish all of that, it is necessary to set up the related plans in detail. for Ecuador in relation to FODETEL, establishment of a national think tank is
considered important. The foundation of such an institute can result in a virtuous
cycle of performance from investing organizations, academic circles and industrial
B. Establishing Rolling Plans for Mid-Longterm Mobile Spectrum
sectors for radio broadcasting R&D. As R&D outcomes build up, they will lead to ICT
Supply
industrial developments, and thus ultimately create opportunities for ICT industry
advancement in the country.
In the mid to long-term, it is necessary to forecast traffic by referring to the results
of international conferences, such as the WRC, to analyze frequency demand, in
order to establish spectrum re-farming plans based on an investigation of frequency C. Suggest the effective mobile broadband network implementation
use, to set up reallocation plans for spectrums of which the term of use has expired release version
and to establish plans for securing spectrum by considering the discovery of new
frequency bands. For this, a roadmap is required. As with the situations in Korea during the initial phase of LTE service, it is
expected that Ecuador’s CONECEL and OTECEL, which own 3G networks, will be
In addition, as for license conditions, expansion of the a nationwide mobile able to provide 1Mbps level service through evolution to a 3.5G network. At the
communications network is a preferential goal for Ecuador. Therefore, until this goal same time, these companies appear to be ambivalent with regards to LTE service.
is fulfilled, a policy to support broadband Internet diffusion. In addition, CNT, which does not have a network for 2G and 3G for voice call
service, needs to use OTECEL’s voice call network as a CSFB even when it builds a LTE
In terms of the promotion of valid competition, although a variety of political network. Therefore, according to the Field Study conducted by the KSP team, CNT
measures are available, some are difficult to implement or, for others, the effects of is establishing a3.5G HSPA+ for the voice calls and data network utilization and is
implementation are insignificant. Therefore, to ensure effectiveness of the policy concurrently building an additional LTE network in line with the government’s policy.
implementation, it is necessary to set fixed amounts of the effects by considering Accordingly, considering the present conditions where technologies have advanced
various aspects of the policy implementation. Twocompetition policiesare necessary from the past, it has been suggested that CNT build a nationwide VoLTE network
for Ecuador. First is de-symmetrization of interconnection fees through spectrum fee by expanding a standard LTE network (so as to provide both voice call and data
differentiation and improvement of the interconnection method. service using a single network.) rather than allowing competing companies build out
separate LTE networks for voic and 3.5G data services.
Spectrum fee differentiation has already been introduced to Ecuador. However,
it will be necessary to examine the related formulas and coefficients in order to
D. Suggest the method for calculate the future needed mobile According to a study on the mid to long-term direct economic benefits, according
broadband spectrum to a regression analysis conduced on the economic growth rate increase as a
dependent variable and broadband penetration increase and other control variables
During the Field Study conducted by the KSP team, the Ecuadorian government as explanatory variables, a 1% increase in the number of broadband circuits
requested the method to calculate the future needed mobile broadband spectrum. led to an increase of GDP growth rate by several times the circuit increase. As
Accordingly, Korea’s ‘mobile broadband communications spectrum requirement broadband is being upgraded from ADSL to FTTH as of late, and as smartphones
calculation and supply plans’ were suggested for application to Ecuador. As a result, have been proliferating since 2007, it is necessary to reflect the advent of new
although traffic information in Ecuador will need to be supplemented in the future, mobile broadband.
it is concluded that a spectrum demand for around 540MHz would be needed by
2023. The indirect benefits of establishing a broadband network are the effects
generated from facility investment. These effects are manifested through
construction works, such as road excavation, pipeline and cable installation and
E. Estimate the number of e-NodeB for nationwide network coverage
telecommunication building construction and investment demand for general
supporting facilities, such as transmission facilities, switching facilities and power
In addition, the team also calculated a rough number of base stations necessary
facilities, as well as an increase in household and corporate broadband subscribers
to implement an LTE network that would satisfy Ecuador’s LTE coverage goal. As
and in the demand for handsets and content. Through the multiplier effect, these
implementation target regions, parroquias with more than 15,000 people were
lead to ripple effects on the national economy, and thus generate production/ added
selected based on the population census of 2010. Accordingly, total coverage would
value and employment induction effects.
cover around 17% of the country’s total land area. The selected regions were again
divided into four areas according to population density. Then, the number of base
Literature on the social effects of broadband network establishment is discussed
stations for each area was calculated by applying different cell radius. According to
in detail in SQW (2013). The key social benefits of broadbandinclude expansion
this method, it was calculated that a total of 3,183 base stations would be required
of communication among broadband users, development of digital type online
in Ecuador.
entertainment, an increase in online shopping, an increase in online learning,
remote medical services, exchange of job information and increased communication
Additionally, the IoT and 5G statuses were briefly summarized. For this, IoT
with the government.
market prospects and industrial trends together with Korea’s IoT service cases were
organized by service provider. It was estimated that IoT activation will generate
According to Ecuador’s national broadband plan, a 20% fixed broadband
network connection demand by around 25~50 times than previously by around
coverage and a 63% mobile broadband coverage will be achieved with an
2020 and that this will lead to an evolution to ubiquitous services. As for 5G mobile
investment of $1.8 billion by 2017. This is estimated to generate an additional $8.835
communications systems, the goal is to provide 1Gbps level communications service
billionincrease of GDP and a cumulative creation of 567,000jobs.
and to standardize new mobile technologies. In relation to this, Korea founded the
‘5G Forum,’ and is now promoting the related technologies and standardization
For this report, the economic ripple effects were re-estimated using new data
projects. In case Ecuador establishes evolution from LTE to 5G as its goal, the country
since of the Latin American and Caribbean countries collected since 2009 and a
will need to continuously attend the related forums. However, as of now the specifics
table of industrial relevance while keeping the same methodologies applied to
for a 5G system have not yet been established,so Ecuador needs to focus on LTE.
Ecuador’s national broadband plan. As a result, it was estimated that a 1% increase
in broadband penetration would lead to an additional GDP increase of about 0.02%
F. Analysis on economic benefit of mobile broadband in Ecuador (direct benefit). In addition, as a result of an analysis of the industrial relevance
analysis, the investment of $1.8 billion would bring about an effect of added value
The economic effects of broadband are largely divided into direct and indirect
generation of about $2.106 billion (indirect benefit).
benefits. Direct benefits include increased productivity achieved by ordinary users
or businesses through the utilization of broadband service. Indirect benefits are the
Overall, the additional GDP increase and accumulated job creation by broadband
increase of production and employment in other industrial fields in accordance with
investment and distribution were estimated to be $8.246 billion and 433,700 people
ther buildout of the broadband network.
respectively, which are slightly lower than the estimations for Ecuador’s national
broadband plan.
VI. Conclusion and Suggestions for National Mobile

Broadband in Ecuador Ⅰ
As a final conclusion of this report in order to facilitate the upcoming LTE
development in Ecuador, technological suggestions and strategic plans which are Introduction
discussed in analysis and proposal in each of the preceding chapters are summarized
for ease of use.
1. Project Background and Objectives
1.1 Project Background

Mobile broadband service including 3G/4G is widely spread in Latin
American countries. However, most of those countries do not have an effective
frequencymanagement system to provide better service. These countries are in need
of a policy and regulatory measures for spectrum allocation, which is necessary for
providing better service to subscribers.
Ecuador has been more active than its neighboring countries about mobile
broadbandservice expansion. In addition, the amount of mobile data usage in
Ecuador has been doubling annually since 2006. As the population is decentralized
geographically, Ecuador’s mobile broadband service was built out faster than
other countries in the Latin American and Caribbean Countries. The Ecuadorian
government is anticipating that mobile communication will lead to resolving
the information gap and thus contribute to the nation’s balanced economic
development.
As a reason of Ecuador’s geographical features such as the Andes Mountains,

Galapagos and Amazon, mobile communication is growing more rapidly than fixed.
However, only 180MHz spectrum is allocated to the mobile service. It is only 13.8% of
the recommended spectrum allocation by UN.
The IDB is promoting a ‘Feasibility Study of the Broadband Networks (Backbone, <Figure 1-1> Objectives of the Action Plan for Effective Spectrum Allocation for
Backhaul and Last Mile) in Ecuador (EC-T1289)’ with a goal to activate mobile Mobile Broadband in Ecuador
broadband service in Ecuador.
Target Coverage: 76.8% of inhabitance in 2020
In relation to this, the Korean Ministry of Strategy and Finance (MOSF) has [Propose the Mobile Broadband Implementation PoliciesandStrategies]
embarked on a project to support mobile broadband improvement in Ecuador as

a joint consulting project with the IDB and KSP in 2014 in order to support mobile Rep.
of Ecuador Rep.
of Kore
broadband quality improvement in Ecuador and to share Korea’s mobile broadband a
development experiences with Ecuador.
- Satisfy the need of broadband Leading country on Mobile
Activate & Promote the Mobile - Desire for Migration of Digital Broadband Discipline,
Broadband Service in LAC Device Especially on LTE System
1.2 Project Objectives
Suggest the policy and regulation of Mobile Broadband Sharing Korea’s advanced ICT experience
The objective of this project is to suggest optimal plans for Ecuador’s mobile Propose the Action Planfor”Mobile Broadband in Ecuador”
broadband policy and related regulations to satisfy the rapidly increasing demand Share the ICT strategic experience for satisfying the “Digital 2.0 Ecuador”
for mobile broadband and to assist the effort. On the base of Korea’s cases on
mobile broadband service strategy, the related support on Ecuador’s such policy Analyze mobile broadband status Case study on Korea and Action plans for themobile Dissemination seminar
and policies in the recipient country compativeanalysis with Ecuador broadband services
making will be made pursing the contribution on the nation’s soico-economic
growth .
In-depth research and survey on current situation and adoption of cutting edge technology
1.3 Purpose of the Final Report

This final report is to describe on the achievements through the consultancy
implementation, including; contents of the Field Study conducted in Ecuador, 2. Project Scope and Expected Results
and the situation in Ecuador published in the‘Diagnosis on Mobile Broadband
and Related Government Policy and Regulation of Ecuador’,KSP teamtechnical
suggestions for mobile broadband deployment in Ecuador using cases in Korea,a 2.1 Project Scope
spectrum requirement calculation, which was an additional request raised by GoE;
and final suggestion on the spectrum policy and regulatory suitable for Ecuador 2.1.1 Spatial Scope
in the title of ‘Proposal for an Action Plan forMobile Broadband and Benefit
Assessment.’
<Figure 1-2> Overview of Ecuador
1.4 Project Goal

<Figure 1-1>presentsthe goal of service coverage for 76.8% of the population of
Ecuador by 2020, as the ultimate goal of the mobile broadband project in Ecuador. Republic
of Ecuador
And the discrete roles of the IDB, the Ecuadorian government and the KSP team is
shown below.
Source: 2014 Worldwide Country Handbook, KEXIM bank (Dec. 2013)
2.1.2 Contextual Scope 3. Direction and Project Execution
1) Analyze the mobile broadband market, frequencies, policies and regulatory
status in Ecuador. 3.1 Direction
2) Study mobile broadband development cases in Korea. The final report, offers policy and regulation recommendations concluded from
the inception report, two months of secondary research, and two weeks of field
3)
Establish strategies for mobile broadband development in Ecuador and study in Ecuador. Also, by benchmarking Korea, it identifies problems regarding the
analyze expected benefits based on the outcomes of the above study spectrum allocation of Ecuador, establishes a “to-be” model, and finally contributes
to a short and long term mobile broadband action plan suitable for Ecuador.
4) Organize a dissemination seminar to share the findings with Ecuadorian
government officials. 3.2 Key Contents
5) Additional information is specified in the ‘ToR (Terms of Reference) for KSP
3.2.1 Diagnosis and Comparative Analysis on the Mobile Broadband
Consultants’ drawn up based on consultation between the IDB and KEXIM.
Market, Spectrum Allocation, Policies and Regulation in
Ecuador
2.1.3 Target of Broadband Coverage
With information provided by the IDB and GoEgathered through a documented
1)
In relation to the mobile broadband target of Ecuador’s “Plan Nacional survey, the project analyzed Ecuador’s telecommunication market, mobile spectrum
de Banda Ancha”, this project aims at supporting policy establishment for usage status, mobile communications technology status and related laws and
achieving coverage for 71.1% of the population by 2018 and 76.8% of the policies. Also, the project predicts the expected demand for mobile broadband
population by 2020. Additionally, Ecuador aims to fulfill the fixed broadband service and spectrum allocation. Implications are drawn from the analyses, and “to-
coverage for 22.91% and 28.73% of the population by 2018 and 2020 be” model and policy recommendations are offered.
respectively, and thus provide broadband service to all people in the country.
3.2.2 Case Study of Mobile Broadband Service in Korea
2.1.4 Objective of Mobile Broadband Spectrum Allocation
For mobile broadband improvement in Ecuador, expertise and lessons obtained
1) By 2020, the KSP team recommends to increase the broadband spectrum from frequency allocation, reallocation and reuse policies applied in Korea were
from the current 13.9% to 40% of the spectrum allocation, of which analyzed. Based on this, Korea’s case is compared with that of Ecuador in order to
recommended by the U.N. derive implications for policies and regulations suitable for Ecuador. In addition, this
final report includes key contents of policy suggestions and investigation results for
improving the efficiency of frequency resource usage in Ecuador and also minimizing
2.2 Expected Results trials and errors of stakeholders during the implementation of LTE.
The project will enable to provide a short and long term action plan of Ecuador
3.2.3 Establishment of Mobile Broadband Improvement Strategies
with regulatory and policy recommendations considering Ecuador’s mobile
for Ecuador and Analysis of the Expected Benefits
broadband demand. Such action seeks to satisfy demand for mobile broadband,
resolve the information divide, and make the opportunity of the best usage of
Based on the analysis of Ecuador’s mobile broadband status as well as the policies
Korea’s technology and experiencesabout mobile broadband development.
and case study of Korea, a strategy to secure a mobile broadband frequency most
suitable to the conditions in Ecuador, and related policy improvements will be
established. An action plan for Ecuador is being implemented with a focus placed on
mobile spectrum, which is recommended internationally for IMT service, in addition
to the IMT spectrum currently used in Ecuador. Such a frequency band enables
two to three years of short term allocation to the carriers; hence it is expected
to contribute to mobile service and the industry as a whole. The study proposes
a spectrum allocation and distribution policy that satisfies GoE’s policy goal of Ⅱ
facilitating fair and effective competition within the mobile broadband industry.
Moreover, the study offers mobile broadband related technology improvement plans
and related policy recommendations fully considering the current technological
Analysis of Telecommunincation Status
environment. Finally, the analyses on the social and economic effects of advanced
mobile broadband systems will be suggested in the final report with short and long
and Policies in Ecuador and the World
term action plans.
3.2.4 Dissemination Seminar in Ecuador
A final report which includes short and long term action plans will be suggested
and discussed with the GoE. In addition, preparations and a rehearsal will be
made for the final seminar. As for the dissemination seminar in Ecuador, it will
be prepared to share findings from the study, which are the mobile broadband
improvement strategies for Ecuador, with all the stakeholders. To achieve this, a
spectrum allocation strategy will be established and related policy improvement 1. Communications and Economic Conditions
details and results of the expected benefit analysis and recommendations will be
submitted to the Ecuadorian government.
1.1 Economic Environment Analysis
Ecuador’s economy is largely divided into service industries (58%), manufacturing
industries (36%) and agriculture (6%). The country’s key export items include
petroleum, bananas, shrimp, cacao and coffee. Key natural resources are petroleum,
seafood and hardwood. As for Ecuador’s economic strength, it is rich in mineral
resources, such as petroleum, gold and silver. On the other hand, as an economic
weakness, Ecuador suffers from an insufficiency of technological human resources
and the country’s industrial structure centers heavily on petroleum. Ecuador’s GDP
for is $96.7 billion in 2014, which ranks the country 63rd in the world in terms of
economic scale.
<Table 2-1> Ecuador’s Key Economic Indicators

Economic Indicator Unit 2010 2011 2012 2013 2014
GDP $100M 675 768 840 914 967
Domestic GDP per Capita $ 4,753 5,325 5,743 6,154 6,417

Economy Economic Growth Rate % 3.0 7.8 5.1 4.0 4.0
CPI Infliation % 3.6 4.5 5.1 2.8 2.4
of a new broadband network must be developed for the economicalinvestment as
<Table 2-1> Ecuador’s Key Economic Indicators
possible.
Economic Indicator Unit 2010 2011 2012 2013 2014
Current Account
$1M -1,608 -225 -117 -793 -692 <Table 2-3>Comparison of Communications Environment between Korea and Ecuador
Balance
Foreign Exchange
International “ 2,622 2,958 2,483 2,641 2,336
Holdings
Transactions
Exports “ 18,137 23,083 24,654 25,657 28,030
Imports “ 19,641 23,243 24,584 26,394 28,834
Total Foreign Debt Balance “ 15,565 16,975 17,040 17,304 17,605
Source: 2014 Worldwide Country Handbook, KEXIM bank (2014)
1.2 Communications Service Subscribers

As for the status of communications services in Ecuador, mobile communications
subscription and Internet penetrations are high as shown in <Table 2-2>. However,
the market provides low-speed services centering on 2G, and thus has large potential
for LTE advancement.
<Table 2-2> Broadcasting and Communications Industry by Item

Key broadcasting and
No. of Subscribers Penetration (%)
Communications Indicators Source: MINTEL (Jan. 2013), ITU (2012)
Fixed Communications 2,325,105 lines (Jan. 2013) 15.1%(2011)

17.54 million subscribers
Mobile Communications
(Jan. 2013)
111.2%
2. Fixed Communications
Internet 8,922,014 subscribers (2012) 56.7%
Broadband 869,036 lines (2012) 5.8% 2.1 Fixed Service Status

Source: MINTEL (Jan. 2013), ITU (2012)
The number of fixed communicationlines in Ecuador was 2,325,105 as of January
2013. The number has been gradually increasing by an average a of about 5% per
year since 2008. As such, together with the country’s economic growth, the fixed
1.3 Communications Industry Indicators and communications service increase rate has been improving. In particular, the growth
Suggestions rate of subscribers to FTTH and 1Mbps services has increased to 5.49%. Nevertheless,
to fulfill the fixed broadband distribution target based on the‘Plan Nacional de
<Table 2-3> shows a comparison of Ecuador’s communications industry indicators. Banda Ancha,’ which is 28.73% by 2020, an effective way should be suggested to
Although topographical features are similar to those of Korea, Ecuador’s land area promote the plan through a link with the mobile backbone and backhaul network
is approximately three times larger than Korea and the population is around one promotion strategies.
third. Therefore, it is forecasted that securing high profitability in comparison to
the implementation cost will be difficult,so advanced implementation methodology
<Table 2-4> Fixed Communications Statistics 2.3 Fixed Communications Service Providers
2010 2011 2012 2013
Ecuador’s leading fixed communications service providers are CNT (Corporacion
Population 14,483,499 14,765,927 15,520,973 15,774,749 National de Telecomunicaciones), which is a government-owned company, and
Wireline 485,108 639,093 869,036 1,070,842 Etapa. As of January 2013, the market shares of CNT and Etapa were 86% and 6%
Annual Penetration rate 3.35 4.33 5.6 6.79 respectively.
Wireline by DSL 289,772 379,864 542,430 676,587
Annual Penetration rate DSL 2 2.57 3.49 4.29 <Figure 2-1> Market Shares of Fixed Telecommunications Companies
Wireline by CABLE MODEM 158,342 200,085 245,618 271,692
Annual Penetration rate CABLE
1.09 1.36 1.58 1.72
MODEM
Wireline by FTTH 2,501 13,524 34,823 54,592
Annual Penetration rate FTTH 0.02 0.09 0.22 0.35
Wireline by WIRELESS 34,493 45,620 46,165 67,971
Annual Penetration rate WIRELESS 0.24 0.31 0.3 0.43
Wireline at speed under 1 Mbps 415,669 419,585 562,691 205,039
Annual Penetration rate UNDER 1
2.87 2.84 3.63 1.3
Mbps
Wireline at speed over 1 Mbps 69,439 219,508 306,345 865,803
Annual Penetration rate OVER 1 Mbps 0.48 1.49 1.97 5.49
Source: SUPERTEL (2014)
Source: MINTEL (Sep. 2014)
CNT is a government-owned company established through a merger between

Andinatel and Pacifictel in November 2008. Since the company’s foundation, the
2.2 Fixed Broadband Service Status number of fixed communications subscribers and fixed communications service
penetration in Ecuador, which were lower than those of mobile communications
The number of fixed Internet subscribers in Ecuador increased rapidly by 67.5% service, have been increasing gradually. In May 2012, CNT selected Amdocs as an
from 639,000 lines in 2011 to 1.07 million lines in 2013. This indicates the Ecuadorian integrated BSS (Business Support Systems) and OSS (Operational Support Systems)
government’s desire for broadband service expansion. However, the usage rate is less solutions provider, and thus has been trying to advance fixed communications
than 10% in comparison to the overall population. Therefore, an integrated solution technology.
is necessary for in fulfilling the fixed broadband plan to provide service to 20% of
the total population by 2017. With the exception of CNT, fixed communications market dominance displayed
by other leading companies, such as Etapa and CONECEL(Claro).
<Table 2-5> Fixed Internet
2010 2011 2012 2013 2.4 Fixed Broadband Service Providers
Fixed Internet in Ecuador 485,108 639,093 869,036 1,070,842
Ecuador’s leading fixed broadband service providers are TV Cable and Claro as
Source: Q&A data, MINTEL (Sep. 2014)
well as CNT, which is a government-owned company. As of 2012, CNT was ranked
first with a fixed broadband market share of 54.5%. It was followed by TV Cable in
second place with a share of 16.5% and Claro in third place with a share of 12.1%.
<Table 2-6> Broadband Market Status <Table 2-7> Communications Service Subscribers in Ecuador
Subscribers 2007 2008 2009 2010 2011 2012 2013
Company Market Share
(Circuits) Other 2G(GSM, CDMA, etc) 2.582.436 3.211.922 3.786.601 4.217.064 4.295.693 4.716.523 4.729.132
16.9%
CNT 473,415 54.5%
3G(WCDMA, HSPA, etc) 0 0 19.831 97.535 218.181 303.163 419.176
TV Cable 143,060 16.5% OTECEL
4G(LTE : FDD & TDD) 0 0 0 0 0 0 0
Claro 104,910 12.1% WiMAX 0 0 0 0 0 0 0
Total 2.582.436 3.211.922 3.806.432 4.314.599 4.513.874 5.019.686 5.148.308

Other 146.527 16.9%
2G(GSM, CDMA, etc) 449.63 323.967 356.9 333.73 303.368 309.053 214.144
Source: SUPERTEL, as of 2012 3G(WCDMA, HSPA, etc) 0 0 0 0 0 218 148.416
3 Mobile Communications CNT EP 4G(LTE : FDD & TDD) 0 0 0 0 0 0 0
WiMAX 0 0 0 0 0 0 0
Total 449.63 323.967 356.9 333.73 303.368 309.271 362.56

3.1 Overall Mobile Communications Service Status
Source: Q&A data, MINTEL (Sep. 2014)
As of August 2014, there were 17.97 million mobile communications

subscribers in Ecuador. In addition, as shown in the table below, the rate of mobile
3.2 Mobile Carriers
communications distribution among the population was 113.32%, which is at the
same level as advanced countries.
Ecuador’s leading mobile carriers are CONECEL, OTECEL and the government-
operated CNT.
Ecuador’s key mobile carriers provide 2G (84% share) and 3G (16%) mobile
services. CNT was the first to launch a commercial LTE service in April 2014. It started
CONECEL is providing a 2G service based on GSM/ UMTS and a 3G mobile
LTE service with five LTE phone models in July 2014.
communications service based on HSDPA/ HSPA+. This company offers prepayment
and deferred payment programs for voice. However payment for data service
is done by prepayment . As of January 2013, CONECEL had 1,710,000 mobile
<Table 2-7> Communications Service Subscribers in Ecuador subscribers, which increased rapidly by 54.7% from 1,105,700 in 2011. CONECEL has
not yet announced any LTE-related plans and is currently publicizing its 3G HSPA+
2007 2008 2009 2010 2011 2012 2013
network as a 3.5G system.
2G(GSM, CDMA, etc) 9.939.977 11.035.259 12.676.192 13.969.987 14.373.926 15.278.033 15.230.535
3G(WCDMA, HSPA, etc) 0 656.989 778.408 1.148.844 1.500.632 1.808.830 2.311.219 OTECEL is providing GSM/ UMTS-based 2G services and HSPA+-based 3G service.
4G(LTE : FDD & TDD) 0 0 0 0 0 0 0 In December 2011, OTECEL ended its CDMA type 2G service and transferred the
Overall
WiMAX 0 0 0 0 0 0 0 existing subscribers to GSM and UMTS-based services. As of January 2013, OTECEL
Total 9.939.977 11.692.248 13.454.600 15.118.831 15.874.558 17.086.863 17.541.754 had 4,114,159 prepaid subscribers and 688,798 postpaid subscribers, which increased
by 52% from 2011.
Population 13.605.485 13.805.095 14.005.449 14.483.499 14.765.927 15.520.973 15.774.749
2G(GSM, CDMA, etc) 6.907.911 7.499.370 8.532.691 9.419.193 9.774.865 10.252.457 10.287.259
The third-ranking mobile carrier, CNT is displaying the fastest growth. Its market
3G(WCDMA, HSPA, etc) 0 656.989 758.577 1.051.309 1.282.451 1.505.449 1.743.627 share rose sharply from less than 2% in August 2012 to 6% in January 2013.
CONECEL 4G(LTE : FDD & TDD) 0 0 0 0 0 0 0 However, the scale of service is relatively smaller.
WiMAX 0 0 0 0 0 0 0
Total 6.907.911 8.156.359 9.291.268 10.470.502 11.057.316 11.757.906 12.030.886
The structure of each organization is as illustrated in the figure below. One of the
<Table 2-8> Mobile Service Revenues
key ICT policies planned is the “Digital Strategy 2.0 in Ecuador”.
2009 2010 2011 2012 2013
CONECEL $ 1.114.295.390,28 $ 1.217.482.903,00 $ 1.379.753.045,00 $ 1.441.873.810,00 $ 1.590.961.642,00

<Figure 2-2> Regulatory Institutes in Ecuador
Revenue OTECEL $ 410.060.834,39 $ 476.452.706,19 $ 519.460.547,76 $ 578.995.086,65 $ 624.648.752,03
unit(USD) Establish communications
CNT $ 0,00 $ 0,00 $ 0,00 $ 62.052.427,92 $ 73.364.993,93
and ICT policies
Total $ 1.524.356.224,67 $ 1.693.935.609,19 $ 1.899.213.592,76 $ 2.082.921.324,57 $ 2.288.975.387,96
MINTEL
CONECEL $ 9,99 $ 9,69 $ 10,40 $ 10,22 $ 11,02
ARPU Head of
(Revenues per OTECEL $ 8,98 $ 9,20 $ 9,59 $ 9,61 $ 10,11 MINTEL
subscriber/ concurrently
CNT N/A N/A N/A $ 16,72 $ 16,86
month) holds office Handles broadcasting and Supports CONATEL and
Average $ 9,49 $ 9,45 $ 9,99 $ 12,18 $ 12,66 as the communications policies and executes policies and
Chairman regulations regulations
Source: MINTEL (Sep. 2014)
CONATEL SENATEL
3.3 Plans and Status of LTE Promotion for Mobile

Broadband Service
In January 2013, CNT invested $30 million and launched commercial LTE service 4.1 Key ICT Policies
in April 2014. As for services in the initial phase, CNT started LTE data service using
MIFI modems. In July 2014, the company started LTE service offering five smartphone ① The Digital Strategy 2.0 in Ecuador
models. The main service areas are the six major cities. In the two FDD broadband
spectrums (20MHz), CNT is currently using 1,700MHz spectrum band only. The MINTEL announced its“Digital Strategy 2.0 in Ecuador” in November 2011 which
700MHz broadband spectrum band is planned to be used in non-urban areas. addressesfour issues, namely, largely equipment, connectivity, training application
However, as supported handsets are not yet available, a pilot operation is being and content.
carried out along the coastal regions. Although a confirmation is needed, it is being
reported that 700MHz broadband spectrum will be used in time for the iPhone “Digital Strategy 2.0 in Ecuador” is being implemented as separate plans as
release. CNT plans to install a total of 1,361 BTS base stations. As of September Digital Government, National Broadband Plan, Digital Readiness and Universal
2014, 850 base stations have been installed. The service speed is 100Mbps for Down Access projects. MINTEL forecasts that the digital strategies will accelerate Ecuador’s
Linkand 40Mbps for Up Link data speed. development into an information and knowledge-based society.
Ecuador’s leading mobile carriers CONECEL and OTECEL have not yet established ② Digital Broadcasting Switchover Plan
detailed plans and strategies for commercial LTE service. However, they have
required spectrum allocation. In October 2012, CONATEL approved the digital terrestrial broadcasting
switchover plan. Based on this plan, CONATEL is promoting digital terrestrial
broadcasting coverage expansion to at least 60% by 2016.
4. Regulatory Institutes and Broadband
Strategies
4.2 ICT Policy: National Broadband Plan
In Ecuador, policies for communications and IT are established by MINTEL with
the regulationshandled by CONATEL. ① Relationship between Digital 2.0 in Ecuador and the National Broadband
Plan
Digital 2.0 in Ecuador (PRESENTACION DE LA EXTRATEGIA ECUADOR DIGITAL 2.0) •To provide universal 1Mbps level service topeople at a cost of US$10 from 2014
lays out Ecuador’s national digital strategy while theNational Broadband Plan (PLAN •To provide data service at 2Mbps for household use and 20Mbps for business use
NACIONAL DE BANDA ANCHA) contains detailed broadband plans. •To adopt market -based free competition policy among service providers
<Table 2-9> Relationship between the National Broadband Plan and Digital 2.0 in Ecuador <Table 2-10> Overview of National Broadband Plan
National Broadband Plan
•Established in 2014, the National Broadband Plan sets out Ecuador’s national broadband
service plan. It aims at providing broadband service to at least 83% of the country’s total
population by 2017. High-speed Internet service will be preferentially provided to areas
where service is not currently provided.
Goals by Stage
Phase Year Goal
Phase 1 2014 • To lower data price per Kbps

•To provide broadband service to a majority of households in rural
Phase 2 2015
areas
Phase 3 2016 • To triple broadband circuits
• To provide fixed and mobile broadband service to 83% of total
Phase 4 2017
population
Source: MINTEL(2014)
③ Details of the National Broadband Plan and Applications
The goal is to provide mobile-based broadband service to 63% of the population

and Fixed broadband service to 20% by 2017.
<Figure 2-3> Ecuador’s National Broadband Plan
Source : MINTEL(2014)
② National Broadband Plan Overview
“Digital 2.0 in Ecuador” was established in 2011 with the National Broadband
Plan being established as a supplementary plan in 2014. Key content of the National
Broadband Plan is as follows: Source : MINTEL(2014)
The plan ultimately aims to provide broadband service to 105.5% of Ecuador’s <Figure 2-6> Optical Communications Network Implementation by Canton
inhabitants by 2020 and to increase the share of mobile broadband service up to
76.77% of inhabitants by 2020.
<Figure 2-4> Plans for Broadband Supply by 2020
As for the optical network, which is the backbone for any broadband plan,
a project to replace 63% of the transport networkwith theoptical fibers will be
promoted. Finally, optical network will be established to cover 224 Cantons by 2017.
<Figure 2-5> Optical Network Implementation Plan

As for areas to which 3.5G service is provided, areas colored in white in the figure
below and where pink colored is the place of 3.5G network is not established.
<Figure 2-7> 3.5G Service Status
The Cantons in which optical communications networks are currently established

are as follows:
4.3 ICT Permits and Regulations spectrum blocks in 700MHz band, which wasused for broadcasting as of October
2012, for mobile communications service.
① Communications Act
Latin American countries that have introduced APT 700 MHz standards as of May
Ecuador’s basic communications act , known as the ‘Special Telecommunication 2013 are Chile, Colombia and Mexico. In December 2012, CONATEL issued 30MHz
Act,’ was established in 1992. The Special Telecommunication Act regulates the spectrum in the 700MHz band and 40MHz spectrum of the 2100 MHz band for the
services as: communication services into end-user services, bearer services, value- purpose of LTE service.
added services and resale services. The new law was being debated at congress by
the end of December 2014. 5. Policy and Regulation of Ecuador
② Service Types and License Regulations In Ecuador, the government office in charge of policy making for
telecommunications is MINTEL (Ministry of Telecommunication and
Information Society) and the related regulatory agency is CONATEL
Type Description
(National Telecommunications Commission). SENATEL (Secretaria Nacional de
•End-user services Telecommunicaciones) enforces communication-related regulations by assisting
Concessions •Bearer services
•Frequency usage CONATEL. The following <figure 2-8> shows the organization of MINTEL.
•Value-added services
Permits
•Private networks <Figure 2-8> MINTEL Organization Chart
•Cyber cafes
Registration •Physical networks
Minister of Telecommunication
•Spread spectrum and Information Society
Source: Press report, BeyondStrategy reconstructed
Internal Communications
Audit Team Division
③ Regulations of Mobile Communications and Internet Service
Information& Knowledge Financial&

In July 2012, the Ecuadorian government approved a new mobile communications Social Planning
Communications
Legal Affairs
Information Administrative
Division Division Division Division Division
and Internet service regulation titled ‘TEL-477-16-CONATEL-2012.’
The key concern of ‘TEL-477-16-CONATEL-2012’ is the obligation of service

Information& Communications Information Society
providers to guarantee users’ rights. For this, the regulation requires service providers Communications & Postal Service
Digital
Integration Team Realization and
Division Team e-Government Team
to implement contracts transparently, open service rates and quality to consumers,
ensure handset selection rightsto users regardless of contract rate plan types, permit Source : KISA (2013)
users’ to terminate their contracts at any time and support a service to block any
spam calls of marketingand commercial advertising purposes. As for Ecuador’s legal system for IT issues, the Special Telecommunications Law
and Communications Law prescribe the overall laws and principles of enforcement
④ Spectrum Management while other regulations address of implementation and use. In particular, the
Ecuadorian Radio Regulations stipulate the details concerning radio spectrum use
In October 2012, the Ecuadorian government announced a plan to introduce and issues.
700MHz spectrum development and utilization standards of the Asia – Pacific
Telecommunity (APT). Accordingly, the government plans to distribute two 45MHz
For communications service distribution to underdeveloped areas, Ecuador has
been operating its FODETEL (Fund for Telecommunication Development in Rural
<Ecuador’s IT-related Laws and Regulations> and Marginal Urban Areas) since 2000. All common carriers holding communications
• Special Telecommunications Law licenses as of present must pay 1% of their annual sales as a donation to the
• Communications Law fund. Originally, the government had planned to impose a 4% donation. As
• Laws on Radio and Television described earlier, Ecuador’s mobile communications market is a duopoly whereby
• General Regulations of the Special Telecommunications Law two relatively large global communication companies are leading the market. The
• General Regulations of the Laws on Radio and Television Ecuadorian government is striving to increase the scale of its allotments in order to
• General Regulation of the Communications Law solve this problem of duopoly and also to establish a foundation for growth within
• Regulation for granting concessions for telecommunications services
the country. FODETEL regulations, as with other regulations in IT fields, contain the
necessary provisions in detail ranging from objectives, operating policy, agreement
• Radio Regulations
with service providers and financial support.
• Regulation to provide AdbancedField Service
• Regulation of Audio and Video Systems by Subscription
In relation to estimating a realistic price for spectrum in Ecuador, for frequencies
to which allocation cost is not imposed through competitive bidding, auction or
Source: Ecuadorian government’s response to questionnaire (Sep. 2014) public frequencies, the fees for radio spectrum utilization are imposed according to
the Regulation of Rights Grant and Fees for Using RadioFrequency Spectrum. This
regulation divides spectrums into 15 types according to wireless service types and
Radio Regulations are comprised of seven chapters in total with each chapter bands, estimates the fees for radio spectrum utilization using formulas, and thus
containing various regulatory items necessary for radio spectrum management. imposes the fees monthly.
Sections 18 ~ 25 of Chapter 5 contain provisions aon authorization and renewals of
frequency use.
<Table 2-11> Results of Spectrum Auction Price
<Contents of Radio Regulations>

RADIO REGULATIONS - Resolution 556 CONATEL
CHAPTER I OBJECTIVES, TERMS AND DEFINITIONS

CHAPTER II GENERAL PROVISIONS
CHAPTER III RADIO SYSTEMS
CHAPTER IV CONCESSIONS
CHAPTER V AUTHORISATION AND RENEWALS OF FREQUENCY USE
CHAPTER VI INSTALLATION AND OPERATION
CHAPTER VII OBLIGATIONS OF AUTHORITIES REGULATION AND CONTROL
Source: Ecuadorian government’s response to questionnaire (Sep. 2014)
and by June 2014, there were a total of 32.6 million subscribers, so Korea can be seen
as leading the global LTE market. The number of LTE subscribers across the world is
forecast to increase to approximately one billion by 2017 (Informa, 2013).
Ⅲ Recently, attention has been drawn to the LTE TDD market. The LTE TDD market
is being formed in 2.3GHz and 2.5GHz bands across the globe and it is expected
Mobile Broadband Market Status and that LTE TDD will occupy approximately 20% of the LTE market in 2017. The LTE
TDD market is expected to grow as a result of commercialization in the gigantic
Compartive Analysis of Ecuador Chinese (China Mobile) and Indian (Aircel) markets and WiBro service providers’
conversion to LTE TDD. According to the GSA, 40 companies from 27 countries were
providing LTE TDD service as of September 2014, and approximately 40 companies
are introducing or planning to introduce the service. China is focusing on LTE TDD.
On December 4, 2013, an LTE service license was granted to three service providers,
China Mobile, China Telecom and China Unicom. In addition, smartphones/tablet
PCs equipped with both LTE FDD and LTE TDD were released (June 2013) and the
number has been increasing gradually. As such, the LTE TDD ecosystem is being
established around the world. Key manufacturers, such as Samsung (Galaxy S4,
Galaxy Note 2), LG (G2), Huawei (Ascend D2), Sony (SP M35t), ZTE (U9810, Grand
Memo) and HTC (One TD 101) have already released FDD/TDD terminals.
1. Market Demand Analysis
1.1.2 Current Market Status
1.1 Mobile Communications Market 1) Korea
1.1.1 Global Market Overview The number of mobile communication subscribers was 54.68 million at the end
of 2013. With a penetration of 109% based on the population, the service is in the
Sales of mobile communication equipment and end devices reached $1 trillion maturation stage. Although the number of subscribers is increasing, the rate of
in 2013, with average annual growth from 2012 to 2017expected to be 3.8% increase is in a downward trend. Since the introduction of LTE, a new technology
amounting to just a tad bit over $1.2 trillion in 2017. Growth in data services is evolution, 2G and 3G subscribers have been decreasing while the number of LTE
predicted to grow continuously at an annual rate of 12.8%, but voice service will subscribers has been increasing rapidly. As for the number of subscribers by mobile
decline by about -3.5%. Korea will also follow the international trends (Gartner, communications technology, in December 2013, the numbers of LTE, 3G and 2G
2013). As for subscribers, internationally the number reached 7 billion in 2013, subscribers were 28.45 million, 18.49 million and 7.74 million, respectively. As such,
growing at an annual average of 4% since 2012. It is predicted that the number of the number of 2G and 3G subscribers together is smaller than LTE subscribers.
subscribers will reach 8.1 billion by 2018.
The status of LTE services is as following. According to the GSA (Global Mobile
Suppliers Association), 331 companies in 112 countries were providing LTE service
as of September 2014. If this trend continues, more than 350 companies will
commercialize LTE service by the end of 2014. In much the same way, expanded
introduction of LTE service to the emerging countries in Africa and South America is
anticipated (GSA, 2014). In Korea, all three mobile carriers had commercialized LTE
service by the end of 2011. By 2013 the subscriber count had reached 28.44 million,
<Figure 3-1> Number of Mobile Communications Subscribers in Korea (by Technology Type) 2) Ecuador
(Unit: 10,000 people)
According to data provided by the Ecuadorian government, the number of
mobile communication service subscribers in Ecuador, as of August 2014, was 17.59
million, indicating a penetration of over 110% of the population. However, rather
than indicating that the entire population has access to mobile communications
service, this figure is the result of multiple subscriptions using SIM/USIM cards
and prepaid services. In other words, this means that there still remains room for
subscriber increase once network expansion is achieved successfully.
<Table 3-2> Mobile Communications Subscriber Count in Ecuador

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Source: Fixed and mobile Communication Statistics of the Ministry of Science, ICT and Future Planning (MSIP) Website Subscriber
3,544 6,246 8,485 9,940 11,692 13,455 15,119 15,875 17,087 17,542
(2013) (1,000 people)
Population
13,027 13,215 13,408 13,605 13,805 14,005 14,483 14,766 15,521 15,775
(1,000 people)
As mobile communication service providers, SKT, KT and LGU+ are providing Penetration (%) 27.2 47.3 63.3 73.1 84.7 96.1 104.4 107.5 110.1 111.2
2G/3G and LTE services. As of the end of 2013, the subscribers of SKT, KT and LUG+ Source: Ecuadorian government’s response to questionnaire survey (Sep. 2014)
were 27.35 million, 16.45 million and 10.87 million, respectively. SKT’s market share
was 59% based on sales and 50% based on the number of subscribers. As such,
the tipping effect towards a market-dominating service provider is continuously The mobile communication market is configured with two global mobile carriers,
displayed. Despite fierce competition to attract subscribers, there are almost no CONECEL and OTECEL, and one government-run company, CNT. CONECEL and
changes in overall market shares based on the number of subscribers while the OTECEL, the private companies, are providing 2G (GSM) and 3G (WCDMA) services.
market share of the third ranking company is slowly growing. The government-owned CNT used to provide 2G (CDMA) service. but was not
successful in securing subscribers as a result of issues concerning handset availbility,
so the government ordered the pull down of the network by the end of 2014.
<Table 3-1> Subscriber Count and Market Share by Mobile Carrier in Korea (MVNO included)
Instead, the government haspreferentially allocated the 4G (LTE) frequency in AWS
and 700MHz band to CNT, which requested LTE spectrum, and thus enabled the
Carrier 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
company to start providing commercial service in January 2014. Accordingly, CNT
SKT 18,783 19,530 20,271 21,968 23,032 24,270 25,705 26,553 26,961 27,352 secured 310 LTE subscribers as of January 2014 and the number increased to 7,230 as
Subscriber KT 11,729 12,302 12,914 13,721 14,365 15,016 16,041 16,563 16,501 16,454 of August 2014. In addition, CNT is providing voicecall service by leasing a voice call
Count LGU+ 6,074 6,510 7,012 7,809 8,210 8,658 9,022 9,391 10,161 10,874 network from CONECEL.
Total 36,586 38,342 40,197 43,498 45,607 47,944 50,767 52,507 53,624 54,681
Dividing the subscribers by mobile communications technology type, the number
SKT 51.3% 50.9% 50.4% 50.5% 50.5% 50.6% 50.6% 50.6% 50.3% 50.0%
of 2G (GSM, CDMA) subscribers was 15.23 million as of the end of 2013. This
KT 32.1% 32.1% 32.1% 31.5% 31.5% 31.3% 31.6% 31.5% 30.8% 30.1% represents the largest share (86.8% of all subscribers). However, it was found that
Market Share
LGU+ 16.6% 17.0% 17.4% 18.0% 18.0% 18.1% 17.8% 17.9% 18.9% 19.9% the number of 2G subscribers decreased for the first time in 2013, indicating a
Total 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% gradual shift to 3G.
Source: Fixed and mobile Communications Statistics of the MSIP Website (2013)
<Figure 3-2> Number of Mobile Communications Subscribers in Ecuador (by Technology Type) 1.2 Future Demands for Mobile Broadband Spectrum
1.2.1 Global Mobile Data Traffic Growth
Across the world, the focus of the mobile communications market has rapidly
been shifting from voice to data service. As a result, mobile carriers are facing a
dilemma between investment expansion to secure traffic and profit decrease, and
thus are experiencing difficulties in pursuing a profit maximization model using
their existing networks. Mobile services now affect all areas of life, and smart mobile
devices have been disseminated to the ordinary public, hence creating a surge in
data traffic. Evolution to 4th generation mobile broadband that utilizes frequency
most effectively is a preventative measure to respond to the excessive data traffic to
come. Recently, key countries have recognized the importance of securing additional
Source: Response from MINTEL, CONATEL and SENATEL about this project (Sep. 2014)
frequencies to prepare for increased mobile broadband demand with a rapid traffic
increase, and thus are striving to establish long-term plans to secure the requisite
Ecuador’s mobile communication market is essentially a duopoly controlled frequency.
by CONECEL and OTECEL, the companies with huge market influences. CNT, a
government-owned company and the third-ranking company in the market, has 1) Overseas Traffic Frequency Requirement Prospect
a share of just 2.1% and thus is failing to induce changes in the market structure.
However, it is considered that CNT is trying to recover its competitive strength In 2013, the ITU conducted a mobile traffic forecast (draft: new report ITU-RM
in LTE by preferentially securing frequencies for LTE. In order to hasten network IMT.2020.Estimate) for securing additional frequency considering changes in the use
investmentor improve the speed of mobile broadband services, Ecuador’s mobile offrequencies, such as the increase of smart devices. Considering actual per capita
communications market needs competition among the market players. traffic, the ITU estimated that traffic will increase by at least as 44 times and as
much as 80 times by 2020 in comparison to 2010. Based on this estimation, the ITU
predicted that a frequency with a maximum width of 1,960MHz would be necessary
<Table 3-3> Subscriber Count and Market Share by Mobile Carrier in Ecuador (MVNO included) for mobile communications (IMT-2000, IMT-Advanced) by 2020. Accordingly, key
(Unit: 1,000 people) countries, such as the U.S. and the U.K. forecast their frequency requirements to be
Common a minimum width of 775MHz and a maximum of 2,770MHz. Using the estimated
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Carrier
requirements, the countries drew up national mid-to-long-term broadband plans
Claro 2,317 4,088 5,636 6,908 8,156 9,291 10,471 11,057 11,758 12,031
to secure the required frequency, and thus are doing so in stages according to their
Sub-scriber Movistar 1,120 1,932 2,490 2,582 3,212 3,806 4,315 4,514 5,020 5,148
respective plans.
Count CNT 107 226 359 450 324 357 334 303 309 363
Total 3,544 6,246 8,485 9,940 11,692 13,455 15,119 15,875 17,087 17,542
Claro 65.4% 65.5% 66.4% 69.5% 69.8% 69.1% 69.3% 69.7% 68.8% 68.6% <Table 3-4> Frequency Requirement Forecast
Market Movistar 31.6% 30.9% 29.3% 26.0% 27.5% 28.3% 28.5% 28.4% 29.4% 29.3%
Frequency Frequency
Share CNT 3.0% 3.6% 4.2% 4.5% 2.8% 2.7% 2.2% 1.9% 1.8% 2.1% Category Requirement Requirement Total
Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% (pre-IMT, IMT-2000) (IMT-Advanced)
Source: Response from MINTEL, CONATEL and SENATEL for this project (Sep. 2014)
Low Density 440MHz 900MHz 1,340MHz
High Density 540MHz 1,420MHz 1,960MHz
Source: ITU (Jul. 2013)
<Table 3-5> Frequency Securing Plans and Progress in Key Countries <Figure 3-3> Monthly Mobile Data Traffic
(Unit: TB)
Bandwidth
Current Remaining to be
Country Plan (Time) Frequency Securing
Bandwidth Bandwidth Secured by
2020
National broadband 300MHz by 2015
U.S. 545MHz 500MHz 1045MHz
planning (Mar. 2010) 500MHz by 2020
Future of superfast
250MHz by 2012
U.K. broadband 597.8MHz 505MHz 1102.8MHz
750MHz by 2020
(Mar. 2011)
Road of light 340MHz by 2015
Japan 410MHz 1460MHz 1870MHz
(Mar. 2010) 1500MHz by 2020
Mobile frequency
150MHz by 2014
Australia management 800MHz 300MHz 1100MHz
300MHz by 2020
(May 2011) Source: MSIP, Monthly Statistics of Wireless Data (as of Aug. 2013)
Commercial mobile
communications
Canada 750MHz by 2017 528MHz 225MHz 753MHz
frequency forecast
(Mar. 2013)
After the introduction of smartphones, the Korea Institute of Electromagnetic
Source: MSIP (2013)
Engineering and Science (KIEES) conducted a study in 2011 to forecast mobile
traffic and frequency requirements. It studied the expected amount of mobile
2) Forecast of Traffic Frequency Requirement in Korea traffic and frequency requirementsuntil 2020. The study shows that mobile traffic
will consecutively increase and that by 2020, trafficwill be 11 times bigger than
Since the introduction of smartphones, Korea’s monthly average mobile traffic in 2011. In 2011, the 320MHz width was allocated to mobile broadband, and
has been continuously increasing. Prior to the introduction of LTE, the traffic given the number the study predicted by 2020, mobile broadband will need a
increase was caused by the increased number of 3G smartphones, however, since width of approximately 459~610MHz. Using the study as a baseline, the Korea
LTE introduction, the increase of LTE traffic has been leading the overall traffic Communications Commission (KCC) established its “Mobile Gwanggaeto Plan” in
increase. In other words, with LTE, the increase in transmission speed and the large- January 2012 that suggests securing a 600MHz width by 2020 to prepare for future
size content use centering on video have been triggering the continuously upward demands. The plan is segmented into a short term plan whereby a 170MHz width
trend of mobile traffic (by a monthly average of 5.5% from Jan. 2012 to Aug. 2013). will be allocated by 2013, a mid-term plan that will add 230MHz by 2016 then finally
In detail, while 3G traffic has decreased slightly from approximately 20,000TB in an additional 200MHz by 2020.
January 2012 to 15,000TB in August 2013, LTE traffic increased from 3,000TB to
more than 53,000TB during the same period. As of August 2013, the overall traffic
was approximately 2.8 times larger than that in January 2012 with LTE traffic <Figure 3-4> Mobile Traffic Forecast in Korea (2011)
representing 73.6% of overall traffic volume.
Source: KIEES (2011)
Since the establishment of the Mobile GwanggaetoPlan 1.0, Korea’s spectrum plan, So far Korea has allocated a 330MHz width for mobile broadband usage.
evolution towards LTE-A to utilize carrier aggregation (CA) technology has been taking According to the 2013 traffic prediction, the country will need an additional
place rapidly. In addition, as a result of the mobile communication technology evolution 803~1132 MHz width by 2023. It is important to presciently allocate frequency
and the spreading of smart mobile devices, mobile data traffic has been increasing at a considering predictions of frequency demand.
faster rate than expected. Korea calibrated the results of its 2011 mobile communication
traffic prediction reflecting the recent changes in the market and technologies in 2013
<Table 3-7> Forecast of Annual Frequency Requirement in Korea
through the Korea Institute of Communications and Information Sciences (KICS, 2013).
(Unit: MHz)
In other words, while using the predictions of 2011, the traffic requirement from 2013
to 2020 was estimated by reflecting the trend of per capital traffic requirement increase Year Status 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
and, especially, the release of LTE smartphones.
Max. 653 669 714 882 927 985 1353 1399 1455 1522
At the time when the Mobile Gwanggaeto Plan 1.0 was established in January 2012, Min. 390 467 515 541 744 780 829 1061 1098 1141 1193
traffic was expected to grow 13 times by 2020, however, the 2013 study predicts 20 times
Additionally
bigger traffic growth. According to the forecast made in 2013, traffic will be generated 77-263 125-279 151-324 354-492 390-537 439-595 671-963 708-1009 751-1065 803-1132
Secured
mainly by an increase in the number of smartphone subscribers in the short term. Source: KICS (2013)
However, in the mid-to-long-term, new services, such as M2M, high-resolution video
transmission and mobile cloud services will lead the traffic increase.
<Figure 3-6> Forecast of Annual Frequency Requirements in Korea
(Unit: MHz)
<Table 3-6> Forecast of Monthly Average Wireless Traffic per Year in Korea
(Unit: TB)
Status Forecast
Traffic Sep. Aug.
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
2011 2013
Max. 118,897 131,965 152,392 200,683 221,789 247,592 349,622 376,938 408,130 444,016
17,409 72,837
Min. 81,509 91,241 106,597 167,372 184,974 206,494 279,929 301,800 326,774 355,507
Increase
1.0 4.2 4.7-6.8 5.2-7.6 6.1-8.8 9.6-11.5 10.6-12.7 11.9-14.2 16.1-20.1 17.3-21.7 18.8-23.4 20.4-25.5
(Times) Source: KICS (2013)
Source: KICS (2013)
<Figure 3-5> Forecast of Monthly Average Wireless Traffic by Year in Korea <Table 3-8> Forecast of Additional Frequency Allocation by Phase
(Unit: TB) (Unit: MHz)
Phase 1 Phase 2 Phase 3 Phase 4

Category Aug. 2013
(2015) (2018) (2020) (2023)
91,241 184,974 279,929 355,507
Traffic (TB) 72,837
~131,965 ~221,789 ~349,622 ~444,016
Requirement (MHz) 390 515-669 780-927 1061-1353 1193-1522
Additionally
- 125-279 390-537 671-963 803-1132
Secured
Source: KICS (2013) Source: KICS (2013)
<Figure 3-7> Forecast of Additional Frequency Allocation by Phase 1.3 Spectrum Analysis
(Unit: MHz)
1.3.1 Current Status of Mobile Spectrum Usage
1) Key Countries
The growth rate for LTE subscribers is relatively higher in the U.S., Japan and
Korea, and most European countries are now focusing on securing broadband
frequency. In Europe, the trend has been to secure broadband frequencies
through common frequency band formation as laid out by the EU. As for the U.S.,
fragmented frequencies and single bands is an issue, and for Japan, the single
Source: KICS (2013)
band issue has always been the problem. In the U.S., especially, LTE service is being
provided centering on the 700MHz band and Advanced Wireless Service (AWS)
band (1.7 and 2.1GHz band). However, the service is fragmented. At the same
1.2.2 Forecast on Future Traffic & Spectrum
time, frequency bands owned by each service provider are different, and thus
common broadband formation is difficult. On the other hand, Europe has reached a
Since the launching of 3G service, Ecuador has been supplied with and been using
consensus on the formation of a common band and is achieving commercialization
smartphones. However, almost 90% of mobile subscribers are still using 2G, so a data
mostly in the 1.8GHz and 2.6GHz bands. 1.8GHz was originally assigned for 2G,
traffic surge has yet to happen. As the KSP team realized during their field study in
however it was shifted to LTE service with usage liberalization. As for 2.6GHz,
Ecuador, neitherthe GoEnor the service providers have conducted any data traffic
broadband frequencies are being provided through new allocation.
related studies. The GoEhas expressed interest in the traffic prediction methodology
of Korea, and wishes to acquire the information, so Korea agreed to include the
traffic prediction method in the final report. As for the LTE spectrum requirement, <Table 3-9> FDD LTE Commercialization Spectrum
the Ecuadorian government has allocated 40MHz spectrum in the AWS band and
Name Frequency Band Country Note
30MHz spectrum (2 x 15MHz) in the 70MHz band to CNT. This is considered sufficient
Digital dividend in America and
for the LTE market in its initial phase. However, it will be insufficient once LTE goes 700MHz Digital Dividend 698-806MHz U.S., Japan and Puerto Rico
Asia – Pacific regions
vital. In particular, when mobile broadband service begins, sudden traffic generation
800MHz Digital Dividend 832-862/7891-821MHz Germany, Sweden and Italy Digital dividend in Europe
and a rapid increase of users may lead to such problems as service inability in some
2G spectrum in America and
regions. Service providers can expand the network to handle this situation. But 850MHz Cellular 824-849/869-894MHz U.S., Korea
Korea
doing so has its limitations, thus a plan to supply frequencies at the necessary time
2G spectrum in
must be established. Failing to supply frequencies at the right time can cause an 900MHz GSM 880-915/925-960MHz Sweden
Europe and Asia
increase in service rates, limited use of some applications, and passive service leading 2G spectrum in
1.8GHz GSM 1710-1785/1805-1880MHz Germany, Italy, U.K., Korea
to impeded development of related industries. Therefore, it will be necessary for Europe and Asia
the GoE to conduct an additional study on the method of traffic and frequency 1749.9-1784.9/1844.9-
1.7GHz (Japan) Japan 2G spectrum in Japan
requirement estimation. 1879.9MHz
AWS(1.7/2.1GHz) 1710-1755/2110-2155MHz U.S., Canada and Mexico 3G spectrum in America
1.9GHz PCS 1850-1910/1930-1990MHz U.S. 2G spectrum in America

Common 3G spectrum across
2.1GHz UMTS 1920-1980/2110-2170MHz Japan, Philippines and Tajikistan
the world excluding America
2.6GHz Norway, Australia, Sweden and
2500-2570/2620-2690MHz IMT additional spectrum
(IMT added) Denmark
Source: GSA (2014)
In addition to the FDD type of LTE service, TD-LTE is now commercialized in more
<Table 3-11> Status of Frequency Allocation in Korea
than ten countries. These countries provide service mainly by using 2.6GHz and
2.3GHz spectrums. Expiration
Category SKT KT LGU+ Total
(Term of Use)
800MHz 10MHz - - 30MHz Jun. 2021
<Table 3-10> Number of Service Providers by TD-LTE Spectrum 2G
1.8GHz - - 20MHz (10 years)
Name Frequency Band Country 3G 2.1GHz 60MHz 40MHz - 100MHz
Dec. 2016
(15 years)
2.3GHz Spectrum 2300-2400MHz Australia, India, Oman and Saudi Arabia
Brazil, Japan, Poland, Russia, Saudi Arabia 20MHz 20MHz
2.6GHz Spectrum 2570-2620MHz 800MHz (nationwide 10MHz (nationwide 200MHz
and Sweden
network) network)
3.5GHz Spectrum 3400-3600MHz U.K.
900MHz - 20MHz - 200MHz
Source: GSA (2014) Jun./ Dec. 2021
LTE 35MHz (8 – 10 years)
1.8GHz 35MHz (nationwide - 200MHz
network)
2) Korea
2.1GHz - - 20MHz 200MHz
2.6GHz - - 40MHz 200MHz
Korea uses the 800MHz band and 30MHz width in the 1.8GHz band for
Mar. 2019
2G, for 3G, a 100MHz width in the 2.1GHz band, and a total of 300MHz width WiBro 2.3GHz 30MHz 30MHz - 60MHz
(7 years)
including 200MHz width in 800MHz band is used for LTE. WiBro uses 60MHz in the
Frequency Secured 155MHz 135MHz 100MHz 390MHz
2.3GHz band. Therefore, a total of 330MHz width of frequency is used for mobile
Source: MSIP (2013)
communication. 2G and LTE frequencies have been allotted to the users until 2021,
3G until 2016, and WiBro until 2019. Subscribers to 2G and 3G are expected to
diminish and once the license is expired some of the frequencies will be available 3) Ecuador
for LTE services. Since 2012, only 20MHz has been necessary for 2G, and at the end
of 2016, the 60MHz band from 3G will also be available for LTE. It seems that only As of September 2014, Ecuador was using a total of 160MHz of frequency,
2FA (one-way 10MHz width) will be necessary for the current 3G subscribers and including 30MHz for 2G, 40MHz for 3G and 90MHz for LTE for mobile
LTE voice services. If VoLTE service stabilizes at an early stage, more frequency will communication. If the 20MHz allocated to CNT is included (though not being
be available for LTE services. Also, subscribers for WiBro, which is categorized as a used,) then a total of 180MHz is allocated for mobile communication services. What
separate market, have been decreasing, thus it seems plausible to transfer the use of is noteworthy is that 110MHz, the largest width, is allocated to CNT which has
the WiBro frequency for LTE TDD or other services. For the record, WiBro subscribers the smallest market share of around 2% and that CNT is providing LTE service by
increased to 1.04 million by the end of 2014 but the number began to decrease in preferentially using LTE frequencies. In other words, it is considered that a basis for
the latter half of 2013, and as of October 2013, only 990,000 people were subscribing CNT’s competitive network and business implementation has already been prepared.
to the service. This indicates that a foundation for CNT’s competitive network implementation
and project deployment has already been prepared. At the same time, in terms of
competition structure, CNT’s competitive role is regarded as an important factor for
the stimulation of Ecuador’s mobile communications market.
Also, although only 1 FA (2x5MHz) is being used as a nationwide 3G frequency

and one FA is additionally used only in specific areas, frequency shortage has not
been raised as a serious issue. This means that Ecuador’s mobile communications
market is still voice-centered and that the transition to a data-centered market is a
bit delayed.
<Table 3-12> Status of Frequency Alloction in Euador <Figure 3-8> Status of 700MHz Spectrum Usage in the U.S.
CONECEL OTECEL CNT*

Technology Type
and Spectrum Down- Down- Down-
Up-stream Up-stream Up-stream
stream stream stream
824-830 869-875 835-837.3 880-882.3
850 MHz
2G 845-846.5 890-891.5 842.3-845 887.3-890 Source: Kim Sang-yong et al. (2013)
1900 MHz 1885-1890 1965-1970 1865-1870 1945-1950
850 MHz 830-835 875-880 837.3-842.3 882.3-887.3
In South America, Brazil is pushing to change the 700MHz band usage (in
3G 1895-1905 1975-1985
1885-1890 1965-1970 1865-1870 1945-1950 metropolitan areas) from broadcasting to LTE service in March 2015, one year earlier
1900 MHz (to be (to be
(specific area) (specific area) (specific area) (specific area) than expected. Columbia has adopted the APT band plan for the idle DTV band and
recovered) recovered)
700 MHz 733-748 788-803
decided to use it for mobile communications service.
4G
1700 MHz 1710-1730 2110-2130 In Europe, the WRC-12 has additionally allocated the 700MHz band
Total 35 MHz 35 MHz 90 MHz (694~790MHz, 2nd digital dividend) to ITU Region One including Europe for mobile
Source: Ecuadorian government’s response to questionnaire survey (Sep. 2014) communications service. In addition, the Conference for European Postal and
Telecommunication Administration (CEPT) is reviewing the band plan. Germany has
※ CNT has been additionally allocated with 20MHz width in the 1900MHz suggested the band be used for mobile broadband service in its Mobile Broadband–
spectrum. However, it has not yet used the additionally allocated frequencies Project 2016 and their Federal Network Agency announced a plan to allocate the
(1890-1895 MHz/1970-1975MHz and 1905–1910MHz/1985–1990MHz). 700MHz band for mobile communications service through an auction that was held
in 2014. The U.K. expressed an intention to utilize the 800MHz band frequencies for
1.3.2 LTE Candidate Spectrum Bands mobile communication use through its UHF Strategy Statement in November 2012. It
is preparing detailed implementation plans accrording toOfcom’s UHF Strategy (Apr.
1) 700MHz Band 2013). Finland announced a plan to utilize the 700MHz band for mobile communications
service from early 2017 through a report submitted to the parliament.
a) Global Trend
For mobile communication services, most countries are using the possible <Figure 3-9> 700/ 800MHz Spectrum Usage in Europe (Plan)
spectrum after the switchover to digital television (DTV). The U.S. completed DTV
switchover in June 2009 so it was able to allocate the available 74MHz width
excluding the frequencies for public security (34MHz) to mobile carriers through
a frequency auction and lauch LTE service at the end of 2010. As for Canada, DTV
switchover in September was completed 2011 and is scheduled to carry out a Source: Kim Sang-yong et al. (2013)
700MHz band auction during the earlier part of 2014. Mexico plans to complete DTV
switchover by the end of 2015 and, considering its economies of scale, announced
the adoption of the Asia-Pacific Telecommunity (APT) band plan in September 2012. Japan completed DTV switchover in July 2011, allocated 60MHz width of the
700MHz band to three common carriers (NTT Docomo, KDDI and eAccess) in June
2012 and is scheduled to launch LTE service after 2015. Australia carried out its
frequency auction for the 700MHz band in May 2013. The license for the allocated
frequency band will be effectuated in January 2015. New Zealand is scheduled to
complete DTV switchover by December 1, 2013 and announced a plan for frequency
allocation for mobile communications service through an auction.
<Figure 3-10> Status of 700MHz Spectrum Usage in Japan b) Trend in Korea
60MHz of width was secured in the 1710~1745/1805~1840MHz bands of which

50MHz was allocated to SKT (35MHz) and KT (15MHz) through an auction in 2013.
According to the conditions of the allocation, SKT must transfer 20MHz of the
existing band (1755~1765/1850~1860MHz) to the allocated band and return the
Source: Kim Sang-yong et al. (2013) existing bandwidth within six months from the new allocation. In addition to the
previously secured 10MHz (1710~1715/1805~1910MHz), Korea has received 20MHz
from SKT, so there is currently 30MHz of unused frequency in total.
b) Trend in Korea
<Figure 3-12> Frequency Status

Of the 108MHz of frequency lying idle (698~806MHz) as a result of the DTV
switchover, 40MHz (728~748/783~803MHz) has been preferentially allocated for
mobile communications service (KCC, 2012). In addition, the government is striving
to set out utilization plans for the possible frequency bandwidth.

Source: Kim, Deuk-won et al. (2013)
3) 2.1GHz Mobile Communications Band
a) Global Trend
In most countries the 2.1GHz band is used for 3G (WCDMA) while some countries
are promoting the use of this band for LTE. However, as 3G is positioning itself as a
Source: Kim Sang-yong et al. (2013)
key mobile communications service, it will take some time to convert the use of this
band to other services including LTE.
2) 1.8GHz Band
b) Trend in Korea
a) Global Trend
3G (WCDMA) service is being provided in a total of 100MHz of bandwidth
The demand for LTE is increasing as a core band for global mobile including 60MHz for SK Telecom and 40MHz for KT. The use of this frequency
communications service. Most service providers around the world are providing will expire in December 2015. Since the introduction of LTE, the number of 3G
LTE commercial service in the 1.8GHz band. For reference, international standards subscribers and amount of traffic volume have been trending downward. Therefore,
(LTE, LTE-A) frequently used in the 1.8GHz band prescribe operation of separate it is expected that some of the band may not be necessary by the time the frequency
frequencies for transmission and reception in a 95MHz width. In Korea, separate license expires. However, as LTE voice service is using the WCDMA network in the DBDM
frequencies for transmission and reception were set for 90MHz during the initial format, introduction of VoLTE and its stable operation will serve as important factors to
phase of PCS frequency allocation. determine the necessity of 3G band retention. When use of the frequency expires (Dec.
2016) at least 60MHz of bandwidth will be recycled for LTE by reclaiming 100MHz thus
allowing the frequency to be used for 3G or higher-level services.
<Figure 3-13> Frequency Status Mobile announced a plan to start satellite-terrestrial service in 2018. Concerning
the issue of standards to be used, this company is developing a satellite-terrestrial
technical report in cooperation with China and Japan. However, China is opposing
the recommendations of frequency usage discussed in the technical report. Korea
and Japan will suggest a 2.1GHz band as an example for satellite-terrestrial system
structure and performance analysis without specifying the frequencies in detail. The
goal is to complete the technical report development by the end of 2014.
b) Trend in Korea
For terrestrial use, Korea will secure 60MHz of bandwidth

4) 2.1GHz Satellite/ Terrestrial IMT Band (1980~2010/2170~2200MHz) considering the trend of commercialization,
such as frequency conventions with neighboring countries and international
a) Global Trend standardization. Following the resolution of the Mobile Gwanggaeto Plan 1.0
announced in January 2012, an optimal technology development for the use
The 60MHz width internationally distributed for satellite/terrestrial IMT by the of the 2.1GHz satellite frequency band in terrestrial mobile communications
ITU (WARC-92) has been mainly promoted for mobile satellite service. But it has not service is being carried out centering on the Electronics and Telecommunications
been activated yet. To resolve the problem of frequency shortage caused by rapid Research Institute (ETRI). In addition, the Ministry of Science, ICT and Future
traffic increase, 60MHz is being considered as a satellite/terrestrial band for public Planning (MSIP) is consulting with the Chinese and Japanese governments about
interest purposes, such as disaster prevention and national defense, or as a terrestrial the usage of bandwidth. Meanwhile, 3GPP1) standardization to utilize the bands
mobile communications band. for terrestrial networks is being implemented separately with participation of
ETRI, the Telecommunication Technology Association (TTA), three common carriers
and manufacturers. 3GPP contribution and response activities will be promoted
<Figure 3-14> Frequency Status by industries and the status of standards will be inspected through a standards
subdivision operation (TTA) within the frequency utilization plan management team.
<Figure 3-15> Frequency Allocation (Plan)
5) 2.6GHz Band
China, a country adjacent to Korea, is utilizing the band for satellite service a) Global Trend
(CHNSAT-M-101.4E). At the Korea-China Satellite Network Coordination Meeting
in July 2013, China announced a plan to launch a satellite sometime in 2015. As As for the 2.6GHz band, 140MHz is used for LTE FDD and 50MHz (including the
for Japan, it is being reported that the country will decide a utilization plan in 10MHz guard band) is being used for WiBro or LTE in most countries. Frequency
the first half of 2014. If the band use is decided for satellite service, Japan will 1)　 3GPP (3rd Generation Partnership Project): A mobile communications technology (LTE and
launch a satellite in 2017, according to sources. In relation to this plan, SoftBank WCDMA) standardization group comprised of regional standardization groups, mobile carriers and
equipment makers
allocation for LTE service was carried out through a frequency auction in Europe 6) 3.5GHz Band
(Norway, Sweden, Finland, Denmark, Germany, Spain, Italy, Belgium, Portugal,
Switzerland and the U.K.), the Asia-Pacific region (Korea, Hong Kong, Singapore a) Global Trend
and Australia) and South America (Brazil and Columbia). As of December 2013, 77
companies were providing LTE service (FDD, TD) using the 2.5/2.6GHz band and 36 WRC-07 allocated 3.4~3.6GHz (3.5GHz band, 200MHz width) to around 90
are either testing an LTE service or building an LTE network. Following 1.8GHz, this is countries and international standards were completed in 2011 as FDD and TDD
the second most frequently used global common band for LTE service. multiple standards. Key countries abroad are examining the band for use for
mobile communications, such as LTE TDD. However, they are reviewing the impact
of interference with satellite communications, band plan (FDD or TDD) and the
<Figure 3-16> Frequency Allocation
utilization of small cells.
Source: Kim, Deuk-wonet al. (2013)

Source: Kim, Deuk-wonet al. (2013)
b) Trend in Korea
The UK Broadband is providing LTE-TDD service using the 3.5GHz band. In
The 2.6GHz band (2500~2570MHz/2620~2690MHz) is allocatied for mobile addition, as of the end of 2013, more than ten companies in Belgium, France,
communications service according to the ITU’s utilization plan. In Korea, the FDD Russia and Germany are preparing to launchLTE-TDD service in this band. China
80MHz width (2500~2540MHz/2620~2660MHz) was secured by recovering the is using this band for satellite communications. If Korea starts using it for mobile
2630~2655MHz used for satellite DMB in March 2013. Then 40MHz of the band communications service, regulation of frequencies with China’s satellite network will
was allocated in September 2013 through an auction. However, the use of the be necessary. 3GPP is drawing up an interference mitigation standard in relation to
2540~2570/2660~2690MHz bands for mobile communication service in Korea was 3.5GHz LTE TDD service.
subject to mutual interference with Japan’s mobile satellites. For reference, Japan
has been using mobile satellites for offshore, ship and overland satellite operations
<Table 3-13> 3.5GHz Spectrum Trend Abroad
and is planning to launch their next satellite in 2021.
Country/ Region Utilization Plan
Accordingly, Korea and Japan coordinated their positions through a number NPRM for use as small cells has been announced. This is under the
U.S.
of consultations in order to adjust the 2655~2690MHz frequencies that are subject condition that they will not cause any interference with other users.
to the possibility of mutual interference. As a result, an agreement was reached in 175MHz was auctioned off for WiMAX in 2004 – 2005. At present,
March 2013 for Japan to use the band for mobile satellite communication service Canada it is mainly used for wireless broadband and backhaul. (For reference,
Canada’s band plan does not comply with international standards.)
until the end of 2021 at the latest and then for Korea to use the band for mobile
communication service afterwards. Accordingly, it will be possible to secure 30MHz For mobile broadband service, band arrangement was completed by
for FDD in the 2.6GHz band in addition to the 40MHz (25250~2540/2640~2660MHz) Japan 2013. From 2014, the band will be used for mobile communication
service.
that had been secured previously but not allocated.
international common band will be decided at the WRC-15 meeting.
<Table 3-13> 3.5GHz Spectrum Trend Abroad
Country/ Region Utilization Plan Korea has also announced its Mobile Gwanggaeto Plan 1.0 in 2012 and expressed
At present, some bands are being used for satellite, FWA and its intention to secure a new frequency band with a 200MHz width in addition to
microwavecommunicatons. For TDD-based usage, compatibility with the existing IMT designated frequencies. This will be promoted continuously in the
China
LTE TDD and fixed satellite service is being tested at the moment.
Mobile Gwanggaeto Plan 2.0.
Detailed plans have not been established.
TDD is preferred. EC Decision 11 (2006) recommended that the use

Europe must be determined by the end of 2013 under the condition of existing <Table 3-14> Candidate Spectrums for IMT Addition Proposed to ITU
user protection.
Region 3 Region 1 Region 2 Industrial Sector
Brazil plans to auction the band within the next several years. However, Candidate
Central and South detailed plans have not been established. Uruguay has distributed it Spectrum Korea China Japan Australia India Russia Sweden Egypt France Canada Brazil Mexico UMTS GSMA Ericsson Telstra Telia Chinese
America for LTE TDD and Argentina. Mexico and Peru distributed it for BFWA. Forum Sonera Industry
Argentina permitted the use of this band for LTE. 807-825
598- 470-608 410- 614- 470- 470- 470-
Below 1.0GHz 852-870 Below 1..
Source: Global TD-LTE Initiative(2013) 694 614-698 430 698 790 790 790
(IMT)
1427.9- 1375-
1.0- 1452- 1462.9 1427- 1429- 1427- 1400 1300- 1452- 1375- 1300- 1300- 1000-
b) Trend in Korea 1500
1.7GHz 1492 1475.9- 1510 1518 1518 1427- 1525 1592 1492 1700 1525 1700
1510.9 1492
As the 3.4~3.6GHz band was allocated for mobile communications by the WRC- Except for
1427-
07, new radio station licenses for the band have been suspended since 2007. At 1400-
1518
1427
present, the band is being used for broadcast relay, amateur service, public service
and UWB. Korea plans to secure at least 160MHz of width through Use of
refarmingfrequencies. satellite 2025-
1.9- IMT for 2110 2.09-2.11 1.9-
2.1 1.9-2.9 1.9-2.2
2.3GHz terrestrial 2200- 2.2-2.215 2.215
<Figure 3-18> Frequency Allocation (Plan) service 2290
proposed
2.7-
2.7-3.4 2.7-3.1 2.7-2.93 2.7-2.9 2.7-2.9 3.3-3.4
3.4GHz
2.7-
2.7-3.4 2.7-3.1 3.3-3.4 2.7-2.9 2.7-2.9 3.3-3.4
3.4GHz
3.4-
3.4-3.6 3.4-3.6 3.4-3.6 3.4-3.6 3.4-3.6 3.4-3.6
Source: Kim, Deuk-wonet al. (2013) 3.6GHz
3.6- 3.6-4.2 4.4-4.5 3.6-4.2 4.4-4.5
3.6-4.2 3.6-5.0 3.6-4.2 3.6-4.2 3.6-4.2 3.6-4.2
5.0GHz 4.8-4.9 4.8-4.99 4.4-4.9 4.8-5.0
1.3.3 Additional Candidate Spectrum Bands
5.3- 5.925- 5.35-
6.0GHz 6.425 5.47
1) Below 6GHz Band
5.3- 5.925- 5850-
6.0GHz 6.425 5925
For evolution and advancement of mobile communication services, ITU members,
such as the U.S.,U.K and Japan are promoting additional frequency distribution. To Source: National Radio Research Agency internal data (2013)
achieve this, the ITU has received and is examining candidate spectrum proposals
from each country. For the proposed IMT candidate spectrums, coordination
of opinions will be carried out internationally and for each region and then an
2) Over 6GHz Band <Figure 3-19> Super High Frequency Band Industry Trend
The ITU (ITU-R WP5D) will continuously discuss additional frequency distribution
for mobile communications service. For bands above 6GHz, there has been
discussions to take his issue up as an agenda for the next WRC-18 meeting. In
October 2013, additional bands suitable for IMT frequencies and the requirements (Ericsson) Interest in super high frequency band
were suggested. The suitable bands were 410~430MHz and 470~6425MHz with
frequency requirements estimated to be 1340MHz (min.)~1960MHz (max). In July
2013, attendees of WRC-15 decided that discussion of the 6GHz and above bands
were premature so it was decided to conduct related studies to discuss this matter at
the next WRC meeting. So a new ITU-R M report [IMT.ABOVE 6GHz] for a study on the
6GHz and above frequencies has been started and will be completed by June 2015. (Fujitsu) Considering 10GHz or higher band
Korea suggested discussion on the6GHz and abovefrequencies as an additional

IMT frequency candidate spectrum. But the U.S. and E.U expressed opposition by
pointing out problems associated with IMT implementation in those frequencies as
well as GSMA. The U.S. is using the 13GHz and 18GHz bands, which were suggested
by Korea as candidate spectrums, for national defense and scientific purposes, so it (NTT Docomo) Considering 10GHz or higher band
should be undersood that the U.S opposed the bands being proposed as candidate
spectrums rather than the technology itself. Nevertheless, the U.S agreed to develop a
study on the 6GHz and above bands as part of the WRC-18 agenda after consultation
with key countries, and thus related studies will be conducted. The U.S alsofirmed to
continue studies on the above 6GHz bands through its Future IMT Vision, which is being
developed by WP5D, and the Future IMT Technical Trend report.
Meanwhile, in the above 6GHz high-frequency bands with high usability,

such as for small cells, R&D is being carried out on the technologies utilizing Source: Kim, Deuk-wonet al. (2013)
the frequency centering on industries around the world. Ericsson, NTT Docomo,
Samsung Electronics and Intel are currently conducting studies on mobile Major countries are focusing on the high-frequency band for next-generation
broadbandcommunications service in the mmWave band. In July 2012, Samsung mobile communication services. China is reviewing the use of 6GHz band frequencies
Electronics obtained a permit for an experimental station in the 28GHz band, and is for mobile communication service and with this in mind organized the ‘IMT-2020(5G)
now studying radio wave characteristics and experimenting with data transmission. Promotion Group’ in February 2013. As for the U.S., it has an interest in high-
frequency bands from a long-term perspective. It is being reported that the U.S. is
reviewing a plan to rearrange its use of the 23GHz and 39GHz bands. In the second
half of 2012, the E.U. launched its ‘METIS Project’ aiming at designing a new mobile
communications vision and conducting technical research in preparation for the
mobile era in 2020. This is a research project led by the E.U. and is being participated
by Ericsson, Nokia, Alcatel Lucent, Telecom Italia, Orange Telecom, Telefonica,
Docomo, Huawei, BMW and academic circles.
1.3.4 LTE Candidate Bands in Ecuador nationwide network structure is still insufficient. 80% of mobile phone subscribers
are prepaid phone users with this number increasing gradually. Nationwide 2G/3G/
In case of FDD, the 200MHz width, such as the 60MHz width of the 700MHz LTE networks have not yet been implemented, and thus expansion of a nationwide
band, 60MHz width of the 1900MHz band and the 80MHz width of the AWS band, mobile communications service network is considered an essential task for Ecuador’s
can be allocated to service providers immediately after 2015. However, considering mobile communications market. In this regard, although Ecuador’s mobile
the competition of the mobile communications market and speed of service communications market appears to be saturation state with a subscriber penetration
advancement, the likelihood of a policy for gradual allocation is considered high. of over 100%, the possibility of subscriber increase is still highly promising with a
In addition, for the 1900MHz band and AWS band within the bands available for successful network expansion.
supply, continuous broadband frequencies of the 40MHz width can be allocated to
service providers. Therefore, it is highly likely to be established as a band suitable for <Figure 3-21> Mobile Phone Penetrations across the World (as of the end of 2013)
4G mobile communications broadband CA.
<Figure 3-20> LTE Candidate Bands in Ecuador
Source: Merrill Lynch (2014)
Ecuador’s mobile communications market is comprised of two global mobile

carriers (Claro and Movistar) and one government-own company (CNT). On the
Source: Ecuadorian government’s response to questionnaire survey (Sep. 2014)
surface, it seems as if the three service providers formed a competitive market,
however, if one takes a close look at market shares, it become readily apparent
Ecuador is not yet using the TDD band for mobile communication purposes. that CONECEL has taken over 65% of the entire market and has never fallen below
However, it has allocated the 3.5GHz band for use in fixed wireless access as a that number since 2004. The distorted competition not only results in the generally
supplement for fixed Internet service. discussed problems, such as rate or service quality, but also poses a considerable
obstacle to the expansion, of networks to cover the nation in its entirety, an issue
which needs to be addressed with a greater emphasis for Ecuador. While nationwide
2. Implications & Suggestions 2G/3G/LTE networks have not yet been established, market competition can overturn
the situation. When the market is dominated by only one or two major companies,
The mobile communications penetration rate in Ecuador as of August 2014 was investment in facilities or infrastructure is hardly expected. In comparison to global
over 110% with the market holding 17.97 million subscribers. However, the number trends, the degree of market share concentration of the top-ranking company is
includes a large number of prepaid mobile phone users, and thus the status of the
extremely high in Ecuador. On the other hand, the market share of the third-ranking As of the figure below, 2G service is still dominant in Ecuador and 3G service
company is very low, so a political measure is critical. The figures below show an is displaying a partial increase. However, in Ecuador’s mobile communications
analysis of this situation using the Herfindahl–Hirschman Index (HHI). Compared market, competition is distorted and there is absolutely no pressure for competition.
to countries in a similar situation, market competition in Ecuador is still excessively Therefore, Ecuadorian mobile carriers are bound to be passive about investing in
concentrated on the top-ranking company. 4G as their investments in 3G have yet to be fully returned. This is the reason why
promotion of competition is significant.
<Figure 3-22> Market Shares of First Ranking Service Providers (2014 Q1)
<Figure 3-25> Mobile Phone Subscribers by Technology Type in Ecuador
<Figure 3-23> Market Shares of Third Ranking Service Providers (2014 Q1)
Source: Ecuadorian Government (Sep. 2014)
With non-existing market competition, the GoE’s decision to launch the

government-owned CNT into the oligopolistic industry with only Claro and Movistar
offering 2G (GSM) and 3G (WCDMA), seems highly optimal. Nonetheless, CNT was
not successful with its initial objective to expand into the 2G (CDMA) market due
Source: Merrill Lynch (2014) to difficulties with acquiring enough handsets to attract their targetednumber of
subscribers. CNTevetually announced that their 2G service would be terminated in
2014. To overcome this early failure, the GoE then decided to preferentially allocate
<Figure 3-24> HHI Comparison (2014 Q1)
the 4G (LTE) spectrum in the AWS and 700MHz band only to CNT, and since January
2014, CNT has been offering LTE service. But not successful due to difficulties of
restrictions on the import of smartphones by the GoE (Imposed by the COMEX)
measures, has become more difficult takeoff demand 4G-LTE service. But preferential
allocation policy decision of the GoE is highly valued.
<Figure 3-26> Mobile Phone Market Shares in Ecuador-Subscriber basis The first is efficient frequency utilization. For this, it is necessary to maximize
adjacent broadband frequencies and to prepare a basis for successful supply of
advanced broadband services (to minimize idle frequencies).
The second is the establishment of an environment for fair competition and

acceleration of competition. Unfair competition must be prevented while at the
same time promoting broadband LTE service competition. An environment in which
users can enjoy more advanced services at a reasonable price must be established.
The third is industrial promotion. It is necessary to promote development of the

related industries by overcome obstacles and activating a broadband LTE service.
The last issue is the imposition of reasonable frequency allocation fees. To ensure
efficient use of frequencies,which are actually a public resource,an allocation method
to impose an appropriate fee suitable for the economic value of frequency allocation
Source: Response from MINTEL, CONATEL and SENATEL to a questionnaire survey for this project (Sep. 2014)
must be designed.
Under circumstances where market competition is non-existent, a policy for fair

competition must be considered with the primary goal being efficient utilization of
radio wave resources.
Referring to a case in Korea would be helpful. The principal goal of Korea’s

mobile communications frequency allocation policy so far has been efficient use of
the radio waves and maximization of the public welfare. Opening the market for fair
competition was being considered when making policy decisions to reach the goal.
For the aspect of efficient spectrum use, the Korean government alleviated
regulations regarding usage and technology, and imposed obligations such as
network establishment to ensure prompt application of advanced technology. The
GoK ensured fair allocation of the spectrum for all three companies, and considered
a third market player to prevent it from falling behind. Details of the development
experience of Korea will be fruitful benchmark cases for the Ecuadorian government.
Moreover, to avoid market fixation, Korea has taken measures such as

rearranging low-frequency allocations preferentially allocating frequencies to new
service providers. For promotion of the industry, network investment and service
advancement (such as accelerating competition among LTE providers) have been
continuously considered. At the same time, following the introduction of a cost
allocation system in 2000, an allocation cost at a reasonable level has been imposed
for frequencies designated for business use. As an implication from a series of
policies implemented in Korea, the following must be taken into consideration in
order for frequency allocation to contribute to promotion of radio wave-related
fields and increase of public welfare.
<Figure 4-1> Status of Mobile Broadband Subscribers
Ⅳ
Case Study of Mobile Broadband Service
in Korea
1. Mobile Broadband Service Development in Source: Korea Internet Security Agency(KISA) (2014)
Korea
1.1.2 Market Growth and Traffic Volume
1.1 Mobile Broadband Status in Korea
The increasing rate of mobile subscribers has peaked, but traffic volume is
The scope of the study is an analysis of Korea’s mobile broadband development continuously surging due to LTE services. Since LTE was first introduced by LGU+ and
experiences such as the status of frequency allocation, policies and broadband SKT in 2011 with KT launching LTE in 2012, the numbers of mobile subscribers and
technology. In addition, through comparison with the cases in Korea, political and LTE subscribers are 54.82 million (109%) and 30.87 million (56%, ranked 1st in the
technical suggestions were made for broadband system improvement in Ecuador. OECD) respectively as of 2Q 2014. Significatly, the volume of LTE traffic was 66,613TB
which represented a 12 fold increase compared to 1Q 2012.
1.1.1 Status of Mobile Broadband Subscribers
<Figure 4-2> Market Growth & Traffic Volume
In korea, January 2014, the number of mobile communication service subscribers
was 54.82 million, indicating a penetration of 109% of the population. In particular,
the number of mobile broadband subscribers is 47.3 million. Therefore, the
broadband mobile subscreiberpenetration is 96%. As for the market shares of
the three mobile carriers, SKT, KT and LGU+ are claiming 50%, 30% and 20% ,
respectively.
Source: KISA (2014)
1.1.3 Status of Base Station Investment As for the reasons of using smartphone by gender, it was found that male
users placed a greater importance on function than females. Male users’ responses
The investment of LTE/LTE-A base station (eNode-B) and wireless access-related included: ‘to use various application software products (74.2%)’ and ‘to use high-
systems by the three major carriers is listed below. Ultimately, the companies will be function and high-performance terminals (38.3%),’ of which the response rates were
investing in slightly more than 100,000 base stations (eNode-B) (with both RU and higher by 11% and 9.2%, respectively, than females. As for female users, although
Femto) wireless access. This indicates that the optimal number of base stations to they also consider functions as important, it was found that they are affected more
cover all of Korea is 100,000~110,000. by their surroundings. Female users responses included: ‘because people around me
are using smartphones (44.9%)’ with rate of this response being 17.7% higher than
The number of wireless access points is highly relevant with the characteristics of for males.
the frequency used. However, as LTE/LTE-A networks, which deliver large-scale traffic,
are comprised of remote units and various wireless access devices, a large number of As for usage by area of information acquisition, there were no considerable
base stations is required to process the same amount of traffic in each company. differences between male and female users. However, a noticeable difference was
displayed in terms of news, financial information and self-education. Male users
responded high for “news” (84.5%)” and “financial and savings information”
<Figure 4-3> Status of Investment in Base Stations
(40.9%)” compared to women who responded most on the “Education and Study
(44.0%).” 84% of people in their 30s and 82.3% of people in their 40s selected
“news” as their most used function while 80.7% of people in their 50s responded
“weather” for the same question. For “Goods, Services and Shopping,” 71% of those
in their 20s responded this to be their main usage, while 51.1% of people between
age 12 and 19 answered “Education and Study” the most, and finally, 44.7% of
people in their 40s answered that they used their devices for “Financial and Savings
Information” the most. While it was found that male users check ‘e-mail (75.1%)’
and ‘SNS (62.3%)’ through smartphones more frequently than females, female users
displayed a high rate of using smartphones for their ‘blogs and personal websites
(53.4%).’ By age, those aged between 12 and 19 used smartphones for ‘SNS (70.8%)’
while and those in their 20s used smartphones for a range of communication
content, such as ‘mobile instant messenger (91.2%),’ ‘blogs and personal websites
(59.4%)’ and ‘communities (i.e social networking) (51.4%).’ The rate of mobile
Source: Central Radio Management Office (Jul. 2014) Internet phone usage is 28.1%. It was particularly higher for people in their50s.
1.2. Survey on Broadband Service in Korea 1.2.2 Smartphone Service Usage
1.2.1 Survey on the Status of Smartphone Usage The comparison of services frequently used, mobile apps frequently downloaded
and mobile apps frequently used produced similar results. It is considered necessary
The Korea Internet Security Agency (KISA) conducts surveys on smartphone and to analyze the routes of smartphone use by service type based on a comparison of
Internet usage and the patterns of the users annually and publishes reports such as its the frequently used services. The routes of use can be divided into built in mobile
‘Survey on the Status of Internet Usage’ and ‘Survey on the Status of Smartphone Usage.’ applications, downloaded mobile applications and the mobile web.
In 2012 a survey on smartphone use (first half) was conducted online targeting Key findings from the KISA study are as follows:
4,000 smartphone users in Korea aged between 12 and 59. The survey period was
ten days from May 31 to June 9, 2012.
<Figure 4-4> Usage Smartphone <Figure 4-5> Services Mainly Used by Smartphones
Source:Internet& Security Focus, KISA (Nov. 2013)
Source: Internet & Security Focus, KISA (Nov. 2013) 1.2.4 Mobile App Downloads
The order of mobile apps frequently downloaded by users was found ‘to be
1.2.3 Other Smartphone Frequently Used (1)“game and entertainment app” (76.8%),’ ‘(2) “communication app” (45.4%),’
‘(3) “music app” (42.4%)’ and ‘(4) “utility app” (41.7%).’ Male users downloaded
Other services mainly used through smartphones were found to be ‘the “alarm ‘“game and entertainment” (79.1%),’ ‘“map and navigation” (42.6%),’ ‘“weather
and clock (94.1%)’ function, which was folldhwed by“calendar and schedule information” (40.0%)’ and ‘“news” (38.5%)’ apps more than female users ‘who
management” (87.0%), “phone book and business card” (69.9%),“ring tone and typically downloaded ‘“music” (44.2%)’ and ‘“shopping” (32.4%)’ apps relatively
wallpaper production or download” (63.5%) and “mobile office” (10.2%). As for more frequently than males.
“mobile office,” the rate of usage by males was twice more than of females. On the
other hand, the rate of using “ring tone and wallpaper production or download” By age, it was found that more than 80% of people aged between 12 and 19 and
by females was 11.2% higher than males. As for people in their 30s and older who people in their 20s and 30s downloaded ‘“game and entertainment’” apps. As for
are engaged in social activities, more than 70% used the “phone book and business users in their 50s, the most frequently downloaded mobile app was‘in the“map and
card” service. The rate of using the “mobile office” was also higher than people navigation” (62.3%) category.
aged between 12 and 19 and those in their 20s. Mobile office is a form of smart
work promoted by the government. Through continuous data monitoring and
comparison by year, it will be possible to identify the results of the government’s
policy to spread smart work.
<Figure 4-6> Mobile App Download <Figure 4-7> SKT's Network Evolution
Source:SKT presentation at theITU-T workshop(July 2011)
Source: Internet & Security Focus, KISA (Nov. 2013)

2.1.2 SKT's Network Strategy
SKT has established a strategy to handle the explosive growth of data traffic
2. Mobile Broadband Network using hierarchical multi-solutions considering the characteristics of the data traffic.
Implementation by Mobile Carriers in More specifically, to accommodate large-size data traffic the plan is to handle
Korea multimedia IP traffic by reducing cell coverage to cells and to respond to hot zone
demand at school campuses, homes and offices with WiFi or WiBro.
2.1 SKT’s Broadband Strategy
<Figure 4-8> SKT's Network Strategy
2.1.1 SKT's Network Evolution
Since starting LTE service centering on Seoul in July 2011 in the 850Mhz band, SKT
has commercialized dual-band (850MHz band No.5 and 1800MHz band No. 3) multi-
carrier (MC) on July 11st, 2012 as the first in the world, and completed a nationwide
LTE-A (two band carrier aggregation: 10MHz + 10MHz) network in June 2013.
SKT started building a broadband LTE (20MHz broadband) network in Seoul in

October 2013 and expanded it around the capital area in December 2013. In July
2014, it completed a nationwide broadband LTE network.
SKT launched broadband LTE-A (20MHz + 20MHz) service in June 2014. Source: SKT presentation at the ITU-T workshop (July 2011)
2.1.3 SKT's LTE Deployment 2.1.5 HetNet& SON
SKT launched LTE service centering on Seoul in July 2011 and is currently A heterogeneous network was introduced to maximize the benefit of space
providing broadband LTE service across the country. reuse and to efficiently cover non-uniform traffic. In addition, SON (self organizing
network) technology was introduced for network automation.
<Figure 4-9> SKT's LTE Deployment
<Figure 4-11> HetNet& SON
Source: SKT presentation at the ITU-T workshop (Jul. 2011)

Source: SKT presentation at ITU-T workshop(July 2011)
2.1.4 Technology Evolution 2.1.6 Smart Cloud Access Network
The data speed of LTE service first introduced in July 2011 was 75Mbps. However, Smart cloud access network was promoted in order to minimize network
it was upwardly adjusted to 150Mbps through carrier aggregation (CA). In addition, investment cost and to maximize network capacity.
a data speed of 300Mbps will be supported with triple band carrier aggregation in
the future. In preparation for the Pyeongchang 2018 Olympic Games, 5G technology <Figure 4-12> Smart Cloud Access Network
development is being promoted at the moment. 1Gbps will be introduced for the
first time in the world during the Olympics period.
<Figure 4-10> Technology Evolution
2.1.7 Cloud Architecture expanded coverage to other metropolitan cities . The company now plans to
introduce broadband LTE-A in the second half of 2014.
Adopting a separate DU-RU structure and centralized DU structure, the smart
cloud infrastructure was completed through virtualizationof BaseStaion. <Figure 4-14> KT's Coverage
<Figure 4-13> Cloud Architecture
Source: IR presentation, KT(Mar. 2014)

2.2.2 KT's Pricing Plan

2.2 KT’s Broadband Strategy Unlimited voice call and text message service is provided with the LTE 670 plan. As
for data, the usage is limited and charged according to a fee schedule.
2.2.1 KT's Coverage
As allocationof frequency for LTE was delayed by reason of prolonged 2G service <Figure 4-15> KT’s Pricing Plan
termination, KT launched LTE service in January 2012, the latest of all three service
providers.
KT’s launching did not go as planned. It happened that not only did the 900MHz
band they were using overlap with the wireless band used for existing RFID(Radio-
Frequency Identification (RFID,) communication, but the newly acquired 1800MGz
band was also subject to interference. To solve the problem of line crossing, the
company moved the 900MHz band sideways by around 1MHz. Although it received
a strong complaint from LGU+ that was using a neighboring band, KT ignored it and
has since been providing the service.
KT was the first to launch broadband LTE service in September 2013. The
company could start the service immediately as its main spectrum was the 1800MHz
Source: IR presentation, KT(Mar. 2014)
broadband. After covering Seoul, KT then methodically expanded coverage to the
suburbs of the city from November 2013 and then from March of 2014 further
2.2.3 KT’s Marketing Strategy <Figure 4-17> LGU+’s LTE Promotion Strategy
In order to overcome the shortcomings of the latecomers, KT propose a various

LTE service charging plan.
<Figure 4-16> KT’s Marketing Strategy
Source: HSN2011 (2011)
Source: DIGIECO (Feb. 2014) 2.3.2 LGU+’s Network Migration Plan
For network advancement LGU+ changed its network to ROADM and carrier
2.3 LGU+’s Broadband Strategy ethernet (POTS). In addition, the company also changed its L2/ L3 networks to a
smart network with 100GE and 40GE interfaces.
2.3.1 LGU+’s LTE Promotion Strategy
<Figure 4-18> LGU+’s Network Migration Plan
In July of 2011 LGU+ became the first mobile operator in Korea to be allocated
an LTE frequency that isused to launchservice concurrently with SKT. At first LGU+
decided to install 2.1GHz band LTE network inonly 84 cities while holding off
installation of a nationwide network. The company eventually expanded coverage
to all metropolitan cities by March 2014 using 2.6 GHz broadband frequencies and
then completed a nationwide network by July 2014.
For a competitive edge, it will provide 300Mbps speed through triple band (MC)
frequency aggregation. Unlike SKT and KT, LUG+’s uploading data service is also an
broadband. Therefore, it can support speeds up to 50Mbps.
Source: HSN2011 (2011)
2.3.3 LGU+’ Broadband Strategy <Figure 4-20> LGU+’s network competitiveness
LGU+ does not have a WCDMA network. sothe company had been relatively
weaker compared to KT or SKT in the mobile broadband market. However, with the
advent of the LTE era, it was the first operator to supply LTE service in Korea (from
July 2011) and start building a network which the company did quite aggressively.
Unlike other common carriers, LGU+ has secured a broadband of 80MHz in three
bands (20MHz in the 800MHz band, 20MHz in the 2.1G band and 40MHz in the
2.6G band). With anits competitive advantage in speed, LGU+ is capable of starting
300Mbps service earlier on by using all of the secured frequencies. In addition, it can
provide an upstream speed of 50Mbps, which is twice higher than the other mobile
operators.
<Figure 4-19> LGU+’s Broadband Strategy
Source: LG U+ (2014)
3. Mobile Carrier Activation Policy and

Regulations in Korea
3.1 Result of the Communications Service Quality

Assessment by the Korean Government
Source: LG U+ (2014)
KCC(Korea Communication Councile) is promoting a policy that
fosters competition based on market principles by presenting the results of a
2.3.4 LGU+ Network Competitiveness
communications service quality assessment that it conducts each year. To encourage
common carriers to improve their service quality, and thus provide higher-quality
LGU+ is aiming for market expansion with its full HD and QHD (quad high
communication services, KCC has been conducting a communication service quality
definition) high-performance smartphone lineup. With the largest broadband
assessment on each common carrier since 1999.Quality of service evaluation result
secured of all common carriers, LGU+ has set out a strategy to realize 300Mbps
is notified to the operator. The results of the quality utilized for marketing by
speed with triple band carrier aggregation technology. LGU+ is strengthening its
the respective operators. The people want to get services from providers of good
competitiveness using a range of fixed and mobile combined products, such as IPTV.
quality. Therefore, the natural service competition between operators is derived. In
particular, the publication of the service area limitation among operators inducesa
competition ever get the nationwide network coverage between theoperators.
3.1.1 Result of the 2012 Communications Service Quality Assessment <Table 4-1> Mobile Phone Voice Call (LTE phone) Rating Standard
In 2012, a quality assessment was conducted for the first time for LTE service Rating
Measuring
(which was launched in July 2011) as subscribers to LTE increased exponentially. Index S (Very A B C D (Very
In addition, the ‘transmission success rate’ (a wireless Internet data quality Excellent) (Excellent) (Medium) (Insufficient) Insufficient)
measurement index that accounts for the minimum speed not affecting service Less than Less than 95% Less than 90%
Call Success 97.5% or
coverage and service usage) was introduced. Moreover, KCC assessed the quality ratings 97.5% and and 90% or and 85% or Less than 85%
Rate higher
95% or higher higher higher
of mobile phone voice calls as well as fixed and mobile Internet services. To ensure
objectivity and fairness, indicators, quality rating standards and methods of disclosure for Source: Quality assessment result press report in 2012, KCC(Feb. 2013)
each service were decided by a specially formed ‘quality assessment committee’ that was
comprised of experts from industrial, academic and research sectors.
※ For fixed telephone, the ITU recommends quality standard compliance of 95%
As for the simple key figures that had been presented in the past, users or more.
experienced difficulty understanding service quality levels using the figures. In ※ For quality assessment result presentation in 2000 and 2001, the ratings were
addition, the figures did not show actual differences in quality standards. Moreover, divided into five levels Aa (over 95 points), A (95 – 90), Bb (90 – 85), B (85 –
not only did the incomplete figures fail to provide useful information to users, they 80) and C (below 80). However, the rating standard was upwardly adjusted
also caused confusion among users as service providers used them as an unnecessary considering users’ expectations.
marketing tool. ※ For mobile phone quality standard (outdoor areas), Singapore’s IDA suggests
a connection success rate of 99% and disconnection rate below 1%. However,
Therefore, better presentation of each provider’s service quality rating will in Korea, the connection success rate, disconnection rate and defective sound
encourage them to voluntarily improve their overall quality but especially nudge quality rate are all assessed.
them to more actively improve the areas where their service quality rating is low.
From a user’s standpoint, they will be able to easily understand the overall quality As a result of a nationwide investigation, the domestic mobile phone voice call
standard of each service provider, to identify quality ratings in areas of their interest, quality (LTE phone) was found to be ‘S (very excellent)’ as of last year. By service
and thus request improvement if quality is found insufficient. provider, all of the three mobile carriers (SKT, KT, and LGU+) obtained an S rating.
This is a very high standard compared even to the six cities assessed by the same
method in November last year (‘B’ in average), and thus indicates that Korea is
3.1.2 Result of LTE Phone Voice Call Quality Assessment
maintaining a top-level service quality. In addition, none of the areas investigated
was found to have insufficient service quality.
For mobile phone voice call quality (LTE phone), 269 areas were selected for
measuring the call success rate. Those areas included those for which results of the
previous year’s assessment indicated that improvement was necessary as well as areas 3.1.3 Wireless Internet Service Quality Assessment Result
subject to a large number of civil complaints, and even areas with a large floating
population, such as subway transfer stations and bus terminals. As for wireless Internet service, 200, 199, 142 and 100 areas were selected
respectively for LTE data, 3G data, WiBro and WiFi service quality investigation. These
※ Call Success Rate (connection success – disconnection – defective sound areas included areas for which results of the previous year’s assessment indicated
quality): Ratio of successful calls to the number of call attempts (excluding that improvement was necessary as well as areas subject to a large number of civil
connection failure, call cut off following connection and defective sound complaints and areas with a large floating population, such as subway transfer
quality even though the call wasnot cut off) stations and bus terminals.
The quality rating standard according to the indices was set as of the following by For the mobile carriers’ own network sections, the transmission success rate
referring to quality standards recommended by international organizations as well reflected with the minimum speed not affecting service coverage and usage was
as domestic and overseas cases. measured in order to check if users could access wireless Internet service anytime,
anywhere without experiencing inconvenience. For all sections, web surfing time ※ International organizations (ITU and 3GPP) recommend network stability
was measured for the top 20 websites based on the number of visitors. quality standard compliance of 95% or higher.
※ See the mobile phone (voice call) quality rating standard.
※Transmission Success Rate: Rate of calls for which wireless Internet connection
is successful and data transmission of a set size completed at a speed higher 3.1.4 LTE Data Service Quality Assessment Results
than that prescribed within the internal network
※ Web Surfing Time: From the time the user enters a website address to the time As a result of a nationwide assessment, the download quality of domestic LTE
the initial screen is displayed in terminal data services within the companies’ own networks was assessed as ‘S (very excellent).’
By service provider, all three mobile carriers (SKT, KT, and LGU+) obtained the ‘S’
<Figure 4-21> Fixed and mobile Internet Service Assessment Configuration rating. The upload quality within the companies’ own networks was also rated as
‘S (very excellent)’ and all three mobile carriers obtained the S rating. The result of
this nationwide assessment including rural regions is even higher than those from six
cities across the world where service quality assessment was carried out in the same
method in November last year (download rating A and upload rating A), and thus
was found to be of the world’s highest level.
※ Six Cities: Tokyo, Hong Kong, Frankfurt, Stockholm, San Francisco and New
York
However, the service quality was found to be insufficient in two of the assessed
areas (one for KT and one for LGU+). Accordingly, KCC recommended improvement
Source: KCC 2012 quality assessment result press report(Feb. 2013) for these areas and the respective service providers announced a plan to take
necessary measures within the first quarter.
As for the wireless Internet, the quality rating was decided as with mobile phone The average web surfing time in all sections in Korea under the LTE service
voice calls so as to best facilitate general users’ understanding of service quality level. environment was found to be 1.1 second. By service provider, the times recorded
The rating was set by referring to assessment results in the previous year, quality were 1.1 second for KT, 1.3 second.for LGU+ and 1.1 second for SKT. As such, the
standards recommended by international organizations, and quality investigation results were excellent for all three common carriers.
results in key cities abroad.
※ According to ITU-T G.1010, a web surfing time within 2 sec/ page is categorized
as ‘preferred’ and aweb surfing time within 4 secs/ page is categorized as
<Table 4-2> Wireless Internet Rating Standard
‘acceptable.’
Rating ※ In all sections, web surfing time is determined by the network link between
Measuring S D the ISP and portal website (access route, circuit bandwidth usage, system
Index A B C
(Very (Very compatibility and network link method), web server capacity (server, circuit
(Excellent) (Medium) (Insufficient)
Excellent) Insufficient) count) and web page status.
Less than Less than 95% Less than 90%
Transmission 97.5% or
97.5% and and 90% or and 85% or Less than 85% Since LTE voice call and data service commencement, the number of subscribers
Success Rate higher
95% or higher higher higher
increased at an exponential rate. Nevertheless, the assessment result was found
Source: KCC (2013) to be S (very excellent), which is far superior to those in overseas countries where
the service was started much earlier. This is considered a result of the three mobile
carriers’ efforts for active network investment and quality improvement.
3.2 Korean Policy Examples for Fostering Competition
※ Radio Waves Act Article 10 (Allocation of Frequencies) (1) The Science, ICT and Future
First, the purport of the Radio Waves Act is examined in relation to the frequency
Planning Minister may allocate frequencies to be used directly by a person who intends to
allocation policy. The Radio Waves Act aims at promoting radio wave-related
industries and enhancing public welfare by accelerating radio wave utilization and run a business falling under any of the following subparagraphs. In such cases, the Korea
technology development through efficient utilization and management of radio Communications Commission shall publicize the matters prescribed by Presidential Decree,
waves. Accordingly, the preferential goal in allocation policy planning has been to such as the scope of persons who may apply for the allocation of frequencies, the usage of
focus on the purport of the Act as of the above. allocated frequency, technical mode, etc., by taking into account the influence afforded to
the key communications business, etc. by the relevant allocation of frequencies
※ Radio Waves Act Article 10 (Allocation of Frequencies) (3) The Science, ICT and Future
※ Radio Waves Act Article 1 (Purpose) The purpose of this Act is to provide matters relating
Planning Minister may, where it allocates frequencies, attach conditions to such allocation,
to the efficient utilization and control of radio waves to facilitate the promotion of the field
as prescribed by Presidential Decree, to prevent the person to be allocated frequencies
relating to radio waves and serve to promote public welfare by facilitating the utilization of
and persons in a special relationship with him/her prescribed by Presidential Decree from
radio waves and the development of radio-wave technologies.
dominating radio wave resources and to facilitate competition at a proper level.
Source: Korean Radio Waves Act fromhte Ministry of Government Legislation Website(Sep. 2014)
Source: Korean Radio Waves Act from the Ministry of Government Legislation Website(Sep. 2014)
In addition, to maximize radio waves for public welfare, the Act prescribes to
In summary, the Radio Wave Act emphasizes: efficiency, fair competition and
formulate and implement measures for radio wave resource utilization promotion.
growth of industries for the use of frequencies as it must contribute to the public
welfare. Other key countries also consider consumers, efficiencies, promotion and
fostering of a competitive environment as important factors when considering to
※ Radio Waves Act Article 3 (Facilitating Utilization of Radio Wave Resources) The frequency allocation.
government shall formulate and implement policy measures necessary to facilitate the
utilization of radio wave resources for the purpose of maximizing the utilization of limited
radio wave resources and promoting the public welfare.
<Considerations for Frequency Allocation in Key Countries>
Source: Korean Radio Waves Act from Ministry of Government Legislation Website(Sep. 2014)
(U.S.) (1) Increasing safety, (2) Increasing efficiency of frequency use, (3) Accelerating
competition and expanding service, (4) Increasing opportunities for sharing of
frequencies among services [USC Title 47]
The Radio Wave Act points out that when allocating frequency, it must consider:
the impact on the backbone communication industry, monopoly prevention and (U.K.) (1) Efficient usage, (2) Increasing effectiveness for users, such as economic benefits, (3)
appropriate competition level. Innovative service development, (4) Accelerating competition [Communications Act]
(Germany) (1) Ensuring efficient frequency usage without interference, (2) Fostering an
environment for fair competition, (3) Promoting continuous market competition
[Communications Act]
(Japan) (1) Fair and efficient usage, (2) Increasing public welfare [Radio Waves Act]
Source: KISDI internal data
The following summarizes details of the Korean government’s effort at the 1.8GHz band (1750~1780MHz/1840~1870MHz), 20MHz each was allocated to the
establishing fair competition regarding radio wave allocation policies. three PCS providers in the order of KTF, Hansol PCS and LGT.
3.2.1 Allocation of Frequencies to Exclusive Service Providers <Figure 4-23> Frequency Allocation to PCS Service Providers
Introduction
(Up-stream) 1750 1760 1770 1780 (Down-stream) 1840 1850 1860 1870MHz
For analog mobile communications introduction, 20MHz frequencies of the
800MHz band were exclusively allocated to Korea Mobile Communications in May KTF HansolPCS LGT KTF HansolPCS LGT
(10MHz (10MHz (10MHz (10MHz (10MHz (10MHz
1984. Using 825MHz~835MHz (10MHz) up-stream and 870MHz~880MHz (10MHz) width) width) width) width) width) width)
down-stream frequencies, the company started a car phone service in May 1984 and
then a mobile phone service in July 1988. Source: MSIP internal data
3.2.2 Allocation of Same Width within the Same Band to Secondary

After the allocation, SKT acquired Shinsegi Communication in January 2002 and
Mobile Carriers to Induce Competition
KTF acquired Hansol PCS in February 2000. The frequency license was transferred as
well and the current three-company system began. Through the acquisitions, SKT,
To have analog mobile communications to switchover to digital, a 20MHz width
then monopolistically owned 50MHz of width of the 800MHz band and KT had
of the 800MHz band, the same width of the same band, was allocated to both the
40MHz of width from the 1.8GHz band.
new and existing service providers in order to ensure and speed upcompetition.
In June 1994, Shinsegi Communications was selected as the second mobile carrier.
Korea Mobile Telecommunications(KMT) and Shinsegi Communications were each 3.2.4 Allocation of the Same Bandwidth to IMT-2000 Service Providers
allocated 20MHz out of the 50MHz width assigned for mobile communications
service. For reference, KMT had 30MHz frequencies at the time. 10MHz was used for For IMT-2000 service provider selection, the Ministry of Information and
analog service and the remaining 20MHz for digital service, this was the same for Communications announced politic goals in July 2000. The goals included building
Shinsegi Communications. a new high-speed information infrastructure, increasing consumer welfare, securing
social equality, increasing incomes, minimizing excessive repetitive investment and
selecting service providers in a transparent and a fair manner.
<Figure 4-22> Frequency Holding after Market Entry by New Service Providers
(Upstream) 825 835 845 849 (Downstream) 870 880 890 895MHz
SKT Shinsegi
SKT Shinsegi SKT SKT
(10MHz (10MHz
(10MHz width) (10MHz width) (analog) (analog)
width) width) < Politic Goal of IMT-2000 Service Provider Selection >
Source: MSIP internal data
Through IMT-2000 service provider selection, the government intends to achieve the
following:
3.2.3 Additional Allocation of the Same Bandwidth to New Service - First, it will establish new super high-speed information infrastructures centering on data,
Providers to Induce Competition in the Telecommunications and thus not only advance the information society, but also accelerate the shift to a digital
Market economy.
- It will increase consumer welfare and secure social equality so that all people can enjoy
using diverse high-quality services conveniently at low cost.
In August 1996, to initiate of fair competition in the communications market,
- In addition, it will create jobs and stibulate the economy, and thus will contribute to
the same width of 20MHz frequencies was allocated to three PCS providers in the
increased incomesfor all nationals.
1.8GHz band. Restructuring of the mobile communications market was implemented
to foster competition, and PCS, a replacement for the existing mobile service, was
introduced. For the new PCS market, KTF, Hansol PCS and LGT were selected. From
< Politic Goal of IMT-2000 Service Provider Selection > <Resolution at the 47th KCC Meeting>
At the same time, the government will keep excessive and repetitive investments to a • 20MHz width is recovered upon expiration of the use of the 800MHz cellular frequency
minimum (50MHz width) (Jun. 2011). In addition, 20MHz was recovered by June 2011 in order to
- while selecting service providers of excellent abilities in a transparent and fair manner thus respond to mobile communications service demand in the 900MHz band used by public
strengthening the international competitiveness of domestic industries. organizations and for FM broadcasting.
- Then, the recovered frequencies were allocated to new service providers for use for 3G in
Source: Ministry of Information and Communications (2000) order to establish a fair competition environment and to accelerate competition.
- As for frequencies used for 2G PCS in the 1.8GHz band, the frequencies were reallocated
In addition, for balanced industry development and global roaming, multiple for 3G or higher services in principle to KTF (40MHz width) and LGT (20MHz width) in June
standards for synchronous and asynchronous technologies were adopted. In 2011.
addition, to provide the related companies with opportunities to participate in the
business and to maximum synergy, the formation of a consortium with the existing - As for 40MHz width of frequencies for use for 3G WCDMA from the 2.1GHz band that
mobile carriers was encouraged. has not been allocated, it is allocated to the existing or new service providers of which
frequency shortage was expected by around 2010.
As for frequency bandwidth, an opportunity was provided for all three mobile
- As for 27MHz of frequencies used for WiBro from the 2.3GHz band that has not been
carriers to secure uniform bandwidth (40MHz). It was also arranged for them to
allocated, those were reallocated to new WiBro service providers.
commence service at the same time.
<Figure 4-24> Frequency Allocation to IMT-2000 Service Providers

Source: Korea Communications Commission (2008)
(Up-stream) 1920 1940 1960 1980 (Down-stream) 2110 2130 2150 2170MHz
Fair competition was promoted with a goal to settle disputes about fair
LGT SKT KTF LGT SKT KTF
distribution of low-frequency bands, which were raised by late starters in the
(20MHz (20MHz (20MHz (20MHz (20MHz (20MHz
width) width) width) width) width) width) market. Of the late starters, however, KT received low frequencies under the
condition of returning 1.8GHz like SKT, and for SKT, it returned the low frequency
Source: MSIP internal data and was reallocated with 2.1GHz.
Note: LGT’s business rights and frequency allocation were cancelled as the company breached conditions for its business
license (Jul. 2006)
In addition, for the rearranged and reallocated frequencies, the use was set for
3G or above, and thus competition over LTE service was promoted. For LTE service
3.2.5 Low Band Frequency Recovery and Reallocation for Fair competition, the same conditions were given to all service providers. Resultantly, LTE
Competition was triggered by LGU+ which then did not provide 3G services.
In December 2008, the ‘Key Frequency Recollection and Reallocation Plan’ was 3.2.6 Supply the same serive operating condition
established to recover some low frequencies from exclusive service providers and to
allocate the recovered frequencies to late comers in order to establish and soeedyo On June 22, 2011, an auction was held for the three bands that were available at
fair competition. that time, for expansion of the supply of frequencies for mobile communication and
to induce fair competition. It also considered investment for the new network and
quality competition.
At the time, Korea allocated spectrums by technological standard. KT and SKT were
granted business rightsfor WCDMA and LG for CDMA-3X from the government. This is
<Press Release on Allocation Policy> the difficulties of LGU+ (LG Telecom at the time). KT and SKT started 3G service in line
with WCDMA equipment development. However, LGU+returned its IMT-2000 spectrum
On June 22, KCC (Chairman: Choi Shi-jung) resolved a frequency allocation plan for for CDMA-3X in July 2006 and its market share has since dropped to less than 15%.
mobile communications to expand the supply of frequencies and induce a fair competition
environment according to the rapid logarithmic increase of traffic. 3.3.2 Innovation of the Third-ranking Carrier
(Omitted)
Ten years hence, LGU+ was able to appoint KT’s former CEO to head its
operations, and in addition, receive LTE band spectrums from the government.
By accelerating new network investment and service quality competition by service providers
through the concurrent allocation of three bands, KCC anticipates that communication
The government’s attempt to provide LTE spectrum to LGU+ by recognizing LTE
service providers will be able to use high-speed and high-quality services. as a new techonology rather than be tied down by previling notions of spectrum
allocation as in the past has succeeded. Accordingly, LGU+, which had taken a back
seat in the WCDMA market, could start LTE service with 3.9G technology again as
Source: Korea Communications Commission (2011) an extension of its 3G business. In 2011, LGU+ Vice Chairman Lee Sang-cheol made
a winning move by saying, “In the LTE era, not only will the mobile communications
market change completely, but also customers will be able to enjoy never-before-
For the auction, existing 2.1GHz band holders, SKT and KT, were automatically
experienced new value.” In March 2012, LGU+ became the first company in the
disqualified from the auction, and the band was eventually allocated to LGU+ to
world to start building a nationwide LTE network LGU+ not only established the
foster a more competitive market.
world’s first commercial LTE network but through extensive investment was the
first in Korea to establish a nationwide LTE network. As a result, according to data
In other words, KCC eliminated two companies already holding a 2.1GHz band
released by the Ministry of Science, ICT and Future Planning in 2014, the market
from the auction to prevent the rise of a distorted market competition structure,
shares of three mobile carriers changed to 50.13% for SK Telecom, 29.84% for KT
which can be caused by monopolization of frequency, as well as address the issue
and 20.02% for LGU+. As such, LGU+ increased its market share by approximately
of lowered convenience for users, which is also a possible result of a distorted
6% percentage points with LTE technology. The market in Korea at the moment
market structure. In addition, through this, KCC promoted competitiveness in the
has been stabilized without any shifts in market shares for the tenth year. With
communication market.
the market share increase, LGU+ recorded a subscriber count of 11,048,023, which
exceeded one fifth of the total subscribers in the market (55,180,086). LGU+
For the other two bands, all three mobile carriers were given opportunities to
market share exceeded 20% for the first time since the company’s foundation in
participate. However each company was limited to secure only one band so that
1996. As for the percentage of LTE subscribers out of total service LTE subscribers,
all three companies could secure a band each. In case KT secured the 1.8GHz band,
LGU+ was ranked first. By April 2014, LGU+’s LTE users totaled7.86 million, which is
broadband service was possible. However, at the time, a greater emphasis was placed
close to 70% of the company’s total subscribers, while LTE subscriber rates of SKT
on securing LTE frequency rather than broadband, and thus natural competition was
and KT were only 53.4% and 53.0% respectively. In the first quarter of this year,
allowed. In addition, the principle to preferentially allocate desired bands to new
LGU+ presented a remarkable performance to be ranked first in average sales per
service providers was applied in order to relax entry barriers for newcomers.
subscriber (ARPU) for the first time. The company’s aggressive LTE investment and
innovation led to changes in the mobile communications market structure. SKT and
3.3 Innovation of the Third-ranking Carrier KT started LTE service in 2011 and 2012 respectively. In 2011, 1.19 million subscribers
could enjoy using high-quality LTE service and in 2012, 15.81 million subscribers, 13
times larger than the previous year, accessed the service. In 2014, two years later, the
3.3.1 Technological Shift
scale doubled, and thus Korea became the first country in the world where 70% of
the population was using LTE. As such, the leverage effect of a small third-ranking
On December 15, 2000, the 3G mobile communications service provider selection
company drastically accelerated mobile broadband service in Korea.
result was announced in Korea and the 3G spectrum allocation was conducted.
3.3.3 Network Investment and Terminal Supply 3.4.2 Spectrum Cap System
For its 2014 fiscal year, LGU+ plans to invest KRW 2.2 trillion. As such, LGU+’s The spectrum cap system prevents certain service providers from over
nationwide coverage expansion has been possible as a result of the LG Group’s accumulating frequencies, limits their economic control and fosters spectrum use
extensive investment support and because the company followed the basics to efficiency. It is a powerful and direct regulation, and in order to implement correctly,
ensure high service quality, such as sufficient throughput, for each subscriber. the market must be clearly defined, and specific players must be selected in advance.
Additionally, LGU+ does not have any problems in securing LTE handsets to attract The U.S., Canada and Australia implemented the cap system as a supplementary to
subscribers as it is supported by LG Electronics, which is another LG Group subsidiary. prevent market failure when adopting a spectrum auction. Doing so encouraged
new entry into the market and was used temporarily until a sufficiently competitive
market was established for the players.
3.4 Policy Packages for Efficient Competition
As seen in the case of other countries, the spectrum cap system was introduced
In the communications market, basic facilities must be supplied, and as a supplementary to the spectrum auction system in case of market failure,
differentiated access to them may result in impeding competition. In addition, however it can stand alone as a complete regulatory means to foster the economy
as a result of network externalities, a tipping or locking effect can be generated. and to foster efiicient use of the spectrum. Nonetheless, for the regulation to be
Therefore, the likelihood of a monopolistic structure is relatively larger than properly applied, details of the implementation plan must be adjusted to meet the
in other industries. Moreover, entry barriers can be created as a result of the rapidly changing communication market, and fairness must be guaranteed to avoid
structure cost that involves both common and switchover costs. At the same time, arbitrariness when applying this powerful regulation.
according to limited frequency supply and different characteristics of each band,
frequency allocation can function as a key factor determining market share. As
such, for fair competition, the communications market requires very cautious and
3.4.3 Frequency Transfer and Lease
elaborate regulatory intervention by the policy making authorities. Considering such
Transfer and leasing of frequencies is the approval of deals in the secondary
market characteristics, the key tools that are actually used in reality for managing
marketamon service providers after government allocation is completed. Approving
frequencies to ensure fair competition are examined below. For a policy aimed at
the transfer and leasing of frequency saves administrative costs for the government,
inducing a competitive system, it is necessary to establish an appropriate plan by
and most of all, the service providers can flexibly use the spectrum. However, ther
carefully considering the characteristics of the frequency management tools and the
is the risk of formation of a spectrum monopoly, running counter to international
situations each country faces.
standards or occurrence of interfernc.
3.4.1 Qualifications Restriction for Participating in Allocation The possibility of monopoly by a dominant market player with massive
capital was pointed out as a problem ingerent in the transfer and lease system.
Qualification restriction limits participation in frequency allocation in order to Also, allowing deals in the secondary market in addition to an open auction or
accelerate fair competition in the market. This is largely divided into two according government controlled allocation of the spectrum might create an anti-competitive
to the purposes. First, there is the method to restrict bidding participation to prevent market, so thorough policy consideration is imperative.
ominant service providers from strengthening their position. Second, there is the
method to designate frequency bands separately for new service providers in order Generally, anti-competition following a market sweep may be controlled by
to promote competition in the market (Yeo et al, 2009). allowing technological and usage transfer, however when only transfer and lease
is allowed scarcity will increase, and the formation of an anti-competitive market is
Recently, access to the mobile market has widened as market access is given to most probable in the spectrum band with high entry barriers. The problem may be
players with a general permit. Therefore, the allocation policy has taken a bigger resolved to some extent through a screening process that checks whether the allow
role in deciding the actual access of a player. Delicate consideration on the allocation the usage transfer when the spectrum holders merge or acquire one another.
policy is required for the policy decision makers.
3.4.4 Liberalization of Frequency Utilization
Liberalization of frequency utilization is aimed at allowing frequency users to

select the purpose and technology of frequency utilization by removing or relaxing
Ⅴ
regulations concerning the uses and technologies assigned to the frequencies.
This is being introduced in the U.S. and Europe where market-based radio wave Establishment of Mobile Broadband
management is allowed in the hopes of realizing efficient frequency management
through competition. Frequency liberalization allows optimal use of each band and
Improvement Strategies for Ecuador and
the efficiency is maximized, also a limited expansion of supply may be achieved. Analysis of the Expected Benefits
However, as liberalization maximizes the rights of the frequency holders, concern
for interference with an adjacent spectrum is high. Therefore, when laying out a
frequency liberalization policy, the downsides should be thoroughly considered as
well as the aspect of fair competition.
3.4.5 Frequency Recovery and Reallocation
Frequency is a limited resource, and resources are now becoming scarcer. Securing
a proper band and allocation for mobile communication supply is necessary for
market proliferation and vitalization. Frequency recollection and reallocation 1. Suggestion of Mobile Broadband Spectrum
policy is very important for accommodating the rapidly changing technologies Policy in Ecuador
and evolving environment. Fair competition is one factor that must be considered
when applying the recollection and reallocation policy. Fair competition is indeed
an utmost priority, siKorea and other major powers have carefully implemented the
1.1 Strategy and Roadmap for MBB Spectrum Supply
policy considering the characteristics of each frequency band.
1.1.1 Spectrums in Ecuador
1) Sufficient and affordable amount of Spectrum in IMT candidate bands: 700

㎒, 1.8㎓ and 2.6㎓
As shown in <Figure 3-20>, a large amount of spectrum allocation has not yet
been carried out in Ecuador’s IMT candidate bands. Accordingly, affordable
frequency are available in contiguous bands between service providers.
Despite the fact that the distribution of smartphones has been started since
the commencement of 3G service, almost 90% of subscribers are still using 2G
service. As a result, spectrum supply for only voice callservice is sufficient at the
moment. As such, Ecuador has sufficient spectrums for service providers in the
contiguous bands and broadband spectrum allocation can be facilitated if it is
necessary.
2) LTE with the 700MHz band, which is narrow for broadband service by three
companies, but advantageous in securing nationwide coverage
LTE service, which was started by CNT, has not yet advanced to a broadband using AWS band and700MHz, which has been granted to CNT, and thus on
LTE service of 20MHz or higher. In addition, as discussed earlier, almost 90% accelerating competition between the top two service providers with network
of subscribers are 2G users. Therefore, for Ecuador, it is more important as of implementation. This is because, although the mobile communication market
present to expand a nationwide LTE coverage than to promote the broadband penetration in Ecuador has exceeded 100%, nationwide 2G/ 3G/ LTE networks
LTE service itself. In Korea, LGU+, which is the third-ranking company, have notbeen deployed yet in Ecuador. As much as so, a necessary measure
triggered competition over installinga nationwide LTE network. As a result, for Ecuador’s mobile communications market at the moment is to build and
the top two companies competitively completed their nationwide networks expand mobile communications services and the related nationwide networks.
within a relatively short period of time. So, for Ecuador, it is also important to To fulfill these goals, a permit-related political approach is necessary which will
encourage CNT, the country’s third-ranking company, to accelerate its network be discussed in detail in the following section.
installation to trigger competition over coverage expansion, and thus promote
the top two companies’ participation in the competition for a nationwide 2) Valid Competition
network.
Ecuador’s mobile communications market is under a serious duopoly where
3) So the short-term focus should be placed ondeploying a nationwide network two global companies (Claro and Movistar) have acquired more than 90%
by resolving the duopoly issue, import restriction and R&D promotionrather share of the market. The market share of Ecuador’s national company (CNT)
than on LTE-Advance expansion has not yet reached even 5%. A general problem associated with such an
asymmetrical competition is in the improvement of rate plans or service
As with other countries, Ecuador will commence broadband LTE service in the quality. However, for Ecuador, a greater emphasis must be placed on the issue
1.8GHz and 2.6GHz bands and preparation of related policies will be necessary of nationwide network expansion as was discussed earlier. In other words,
for the long term. In addition, there is not yet a problem with in the securing while nationwide 2G/ 3G/ LTE networks have not yet been established, one
of spectrums in Ecuador. However, what is important in the present point is of the key elements to solve the current problem is to stimulate market
to overcome import restriction, promote R&D and stimulate competition for competition. However, competition cannot be expected to be promoted
installation of a nationwide network. And in the long run, a focus must also successfully while the market is dominated by one or two companies as
be placed on resolving the distorton of competition within the communication this leads to the lack of inducement to invest in the facilities required to
market when supplying spectrums for broadband LTE service in the future. expand the network nationwide. When the concentrated market shares are
compared against those in other countries, the market penetrance of the
1.1.2 Spectrum Allocation Goals top-ranking company in Ecuador is extremely high while the market share
of the third-ranking company is insignificant. So it is clear that the country
is in a keen need of political measures to resolve this situation. Therefore, in
1) Nationwide LTE mobile broadband supply
establishing spectrum allocation policy for Ecuador, it is essentially required
to take into consideration the issue of valid competition. In addition, valid
As for spectrum allocation for mobile communications service, broadband
competition policies, such as for asymmetric estimation of interconnection
spectrum securement has been raised as a new issue across the world. Based
fees and differentiated radio wave fee imposition, are required. Details will be
on interactive service, LTE can utilize 10, 20 and 40MHz bandwidths with
discussed in the following section.
maximum performance achieved when a 40MHz band is used. However,
the LTE service currently provided in Ecuador is based on 10/ 20MHz
standards, and thus is not of 4G performance which would be possible 1.1.3 Strategy and Roadmap
with an application of at least 40MHz. Nevertheless, an LTE band of 40MHz
bandwidth allocated per FA is not yet available in Ecuador. As a large amount 1) Short-term Strategies
of spectrum has not been assoigned in Ecuador, there are possible and
suitable frequencies in contiguous bands between service providers. While As was previously discussed, for Ecuador, a short-term focus must be placed
a supply of broadband LTE spectrum of 40MHz bandwidth is also necessary, on resolving the duopolistic situation, and thus on building a nationwide
a greater emphasis must be placed on a nationwide LTE network expansion network rather than on the expansion of 20MHz or higher LTE-Advance
network. To accomplish this, CNT must be utilized actively. As for the plans for large cities, and thus maximize the rate of return.
using CNT, the following three are proposed.
As a weakness of this plan, CNT will focus on universal service in the
a) (Plan 1) To actively support CNT underdeveloped areas and the top two companies will be encouraged to
invest only in the cities where the rate of return is relatively higher. As such,
Plan 1 is to support CNT so that it builds nationwide LTE networks in urban this plan does not provide any inducement for LTE network implementation
and suburban areas by using the 700MHz and AWS bands and, at the same and service by any of the companies, and thus may result in a delay of LTE
time, to temporarily defer LTE spectrum allocation to the first and second service. In addition, this plan is not at all helpful in resolving the distorted
ranking companies during the respective period. competition structure. Therefore, it is necessary to either continuously
promote market entry by new companies or to actively encourage market
This plan enables CNT to buildout LTE networks, and thus offer exclusive entry by MVNOs.
service for a set period of time. If necessary, an additional spectrum allocation
to CNT can be considered. For this,a logical ground for spectrum allocation c) (Plan 3) Privatizing CNT
to the top two companies is necessary. As for the deferment period, it will
be more effective to apply differentiated periods to the companies (Ex.: Two Plan 3 is to minimize the government’s intervention, and thus leave the
years for the first ranking company and one year for the second ranking matter to the market. This is based on the assumption that sufficient benefits,
company). The granting of exclusive rights to CNT for a certain period of such as an exclusive granting of LTE spectrums, have been provided to CNT
time in order to resolve the situation of restricted competition results in a and that CNT failed to perform its role properly, and thus could not improve
large burden on the Ecuadorian government. In an effort to overcome this, the competition structure. To improve the competition environment, it is
the government needs to alleviate the burden through legislation. It is also necessary to promote privatization by finding a company to take over CNT
necessary to politically establish the granting of obligations to CNT for LTE although that may take some time. In addition, for LTE service diffusion,
network deploying and commercialization. What is important in the course spectrums must also be allocated to the top two companies. To accomplish
of this operation is to not allow CNT to build a 3G network together with this, a differentiated spectrum allocation to the first and second-ranking
LTE networks for voice call service. This is because the purport of this plan is companies will be more effective.
to have CNT concentrate its competencies oninstalling an LTE network and
providing servicesas a company specializing in LTE. In other words, for CNT’s 2) Long-term Strategies
voice call service, roaming to the current network, utilization of the MVNO
system or, ultimately, the VoLTE application must be considered. It is necessary to establish mid to long-term supply plans in order to fulfill the
above-listed goals although a spectrum supply for broadband LTE service is not
b) (Plan 2) To reestablish the role of CNT yet required. To establish the plans, the following strategies are needed.
Plan 2 is to restrict CNT’s roleonly to the expansion of public and universal a) Strategies
services, and thus have the company focus on LTE and 3G coverage expansion
in suburban areas. ① Reallocating expired spectrum
For this, it is necessary to encourage the top two companies to support The spectrums currently allocated to IMT bands will be expired as of the
the necessary investment for CNT’s universal service provision. In addition, following:
CNT must be assisted in its utilization of the top two companies’ networks.
As for the top two companies, it is necessary to have these two companies •T he 372 MHZ of the 2.6GHz band assigned to MUANA VISION an
strengthen their investment into the relatively underdeveloped urban areas UNVISA(186MHz each) will expire in 2016
other than those to which CNT is supplying universal service as a mandatory
requirement. This is aimed at preventing cream-skimming to invest only in
•The 50MHz of the 850MHz band assigned to CONECEL and OTECEL (25MHz
<Table 5-1> Spectrum Reallocation and Collection Rules in Ecuador’s Radio Regulations
each) will expire in 2023.
•The 20MHz of the 1900MHz band assigned to CONECEL and OTECEL RADIO REGULATIONS
(10MHz each) will expire in 2023.
CHAPTER V
AUTHORISATION AND RENEWALS OF FREQUENCY USE
•The expiration date for the 30MHz of the 700MHz band allocated to CNT
has not been specified. Article 10: Authorization .
Article 11: The authorized persons.
•And the expiration date for the 40MHz of 1700/210MHz band allocated to
Article 12: Application for authorization.
CNT has not been specified.
Article 13: Requirements for authorization.
Article 14: Content of the authorization agreement.
In summary, 372MHz (186 MHz each for MUANA VISION and UNIVISA) ofthe
Article 15: Duration of contract approval .
2.6MHz band will expire in the near future, 2016and 50MHz of the 850MHz band
and 20MHz of the 1900MHz band will expire in 2023. Lastly, as for the 30MHz of Article 16: Amendments to the authorization agreement.
the 700MHz band and 40MHz of the 1700/ 2100MHz band allocated to CNT, the Article 17: Technical Amendments .
expiration dates have not been specified. Article 18: Termination of the authorization.
Article 19: Termination by mutual agreement.
A survey on the trend of the spectrum usage must be carried out systematically Article 20: Termination unilateral .
and a conversion plan to allocate 4G or more in line with the decreased use of 2G Article 21: Notification of termination of the authorization.
and 3G at the time the spectrum expires needs to be established. What is important Article 22: Temporary authorization to use frequencies .
is that, as service providers can request LTE conversion prior to spectrum expiration, Article 23: Systems that do not require authorization.
it is also necessary to establish relevant action plans. In the long term, it is also Article 24: Renewal of the authorization.
necessary to draw up a plan for setting expiration dates for the spectrums of which
Article 25: Conditions for renewal and authorization.
expiration dates have not yet been specified. For this, an effective approach is to set
Rule 26: Signing of contracts.
up a reallocation plan by concurrently specifying expiration dates for all applicable
spectrums, such as to specify that “the period of usage for mobile communications
Source: REGLAMENTO DE RADIOCOMUNICACIONES
spectrums for which the expiration dates are not specified as of present will expire
in five years’ time” with a grace period (as was done in Korea). For reference, in
addition to the Telecommunications Law, Ecuador, has Radio Regulations comprised ② Establishing a spectrum refarming plan through a survey on usage trends
of 13 chapters. The radio regulations, prescribe the necessary details for radio wave
management including spectrum reallocation as well as recovery and relocations. For efficient spectrum usage, a survey on the trend of usage in all bands
is basically required. IMT candidate bands are core bands for mobile
communications service. These are also highly competitive bands in terms
of terminal and device supply. Therefore, if bands used for purposes other
than mobile communications service are applicable, cost and benefit analysis
for reallocation to these bands through spectrum refarming following an
appropriate compensation process is necessary. In addition, when necessary,
the permission to shift WiMAX bands to TD-LTE, such as 3.5GHz band, needs
to be examined from a long term perspective. Spectrum collection and
reallocation requires a considerable length of time until completion including
trend surveys and compensation processes. Therefore, it must be planned with
consideration given to the required time
③ Traffic Forecast than maximization of frequency auction profits,
(ⅱ) p roviding frequencies with satisfactory radio wave characteristics,
In 2013, the ITU conducted a mobile traffic forecast (Draft: New report ITU- (ⅲ) Mandating sharing of facilities
RM IMT.2020.Estimate) considering actual per capita traffic and estimated (ⅵ) c reating a competitive marketthrough roaming based on fair competition and
that traffic would increase by as little as 44 times and as much as 80 times mandatory designation of the top two-ranking companies as MVNOs ,and
by 2020 in comparison to 2010. Based on this estimation, key countries are (ⅴ) strict inspecton of performance
drawingup national mid-to-long-term broadband plans to secure the required
frequencies, and thus are doing so in stages according to their respective The above should be implemented when granting bradband licenses in order
plans. In the long-term, Ecuador also needs to start preparing such a plan with to foster the creation of a market rather than merely promoting broadband
the first step to the planning being a spectrum requirement forecast. LTE until the goal is fulfilled. To achieve this, it is necessary to set up the
related plans in detail, which is discussed in the following section ‘License
In Ecuador, smartphones havebeen used since the commencement of 3G Conditions.’
service. However, almost 90% of the subscribers are still using 2G service,
and thus a substantial explosion in data traffic has not occurred. In addition, ② Establishing rolling plans for mid to long-term mobile spectrum supply
traffic-related statistics or projections of the Ecuadorian government have not
been found. As for LTE spectrum requirements, theEcuadorian government In the midto long-term, it is necessary,
has allocated bi-directional 30MHz spectrum in the 700MHz band to CNT
which is considered sufficient for the LTE market in its initial phase. However, 1)to forecast traffic by referring to the results of international conferences, such
it is forecast to be insufficient after LTE activation. In particular, when mobile as the WRC,
broadband service is provided for the first time, the sudden traffic and user 2) to analyze frequency demand,
increase may lead to temporary suspension of service in some areas. Service 3) to establish spectrum re-farming plans based on an investigation of frequency use,
providers can extend their networks in response to this problem. However, 4) to set up reallocation plans for spectrums of which the terms of use have
as network extension has limitations, a plan for spectrum supply at the right expired, an
time must be established. Failure to supply spectrum at the required time 5) to establish plans for securing spectrum by considering the discovery of new
can result in such problems as an increase in service fees, restricted access frequency bands.
to some applications and passive service supply lowering activation of the
related industries. Therefore, it is considered necessary for the Ecuadorian To accomplish all of th above, a roadmap is required as follows:
government to conduct an additional study on the method of traffic and
spectrum requirement calculation. First, it is necessary to forecast traffic volume by considering consumption
patterns in the mobile broadband era as well as technological and service
b) Roadmap environment changes, and thus analyze the spectrum requirement.
① Securing nationwide LTE network coverage Second, it is necessary to establish a spectrum collection and reallocation plan
through an investigation of the pattern of spectrum usage by including a plan for
In Ecuador, a rapid increase in traffic is not yet being observed. Therefore, reallocation of expired spectrum.
the short-term focus must be placed on building a nationwide network
by resolving the market duopoly rather than through LTE-advance Third, it is necessary to prepare and continuously supplement the mobile
expansion. In other words, a primary goal for Ecuador is a nationwide communications spectrum plan to discover new mobile spectrums by reflecting the
mobile communications network expansion, which entails a policy to support results of international discussions on reallocation, such as those of the WRC.
broadband Internet diffusion by
Fourth, it is necessary to improve the system for service fees in order to accelerate
(ⅰ) p
lacing a greater emphasis on mandatory coverage and compliance rather incresed the efficiency of spectrum usage.
1.2 License Conditions with the business plans suggested by each service provider is imposed, it can be
expected that the burden of companies that have entered the market by submitting
The license system has been a core instrument for introducing competition into passive business plans. Will be eased. In a situation like this, sanctions on non-
the communications market. Through licensing, common carriers are granted various fulfillment of the allocation conditions may result in disadvantages for companies
rights but also held to specified conditions and obligations in order to legally provide submitting active investment plans.
communication services. The licensing system is to not only grant a license for
From the competition-wise standpoint, the likelihood of companies submitting
communications services, but also control regulations applied to the companies after
passive investment plans to win a bid increases in a monopolistic market. Therefore,
their market entry. Using this system, the regulatory authorities have established
under circumstances where the necessity of nationwide network expansion is large
an overall regulatory frame in the communications market, such as for the market
in a monopolistic market, the selectionmethod to give additional points in the course
structure, the stages of competition system introduction by service, the number of
of spectrum allocation to service providers according to their suggested coverage
service providers and the degree of competition. During the phase of competitive
conditions is not effective. Instead, it is necessary for the respective government
system introduction when individual communication service regulations were not
to suggest a strong coverage standard as a condition for spectrum allocation and
systemized, it was natural for most countries to establish a framework of regulations
to thoroughly inspect fulfillment of the condition by setting out related rules.
using the licensing system.
When mandatory network implementation is imposed as set by the regulatory
organizations, the problem of service providers with active investment plans to
With the introduction of a general approval system as of late, allocation
become disadvantaged upon imposition of a penalty of non-fulfillment of the
conditions began performing the role of licensing in wireless fields. Accordingly,
obligation is solved naturally.
the conditions for spectrum allocation to mobile carriers also need to be examined
compositely in terms of mid to long-term policies in order to ensure the spreading
As for the standard of coverage, a general practice is to impose coverage based
of wireless broadband services. In general, the key factors affecting broadband
on the population. However, for effective fulfillment if inspection, a method
Internet proliferation are population density, population scale, income level,
to utilize a quantitative indicator, such as the ‘number of base stations,’ can be
market competition status and the level of service fees. However, if these factors
considered. For example, following the suggestion of a number of base stations for
are not attractive enough to draw in service providers or when there are more
installation, spectrum is allocated by 30% of the base stations installed within three
primary goals, a nationwide network implementation through powerful imposition
years and by 60% or more within five years.
of allocation conditions at an appropriate allocation cost can be required as a
mandatory license condition rather than to induce fierce price competition through
auction system. <Table 5-2> Example of Mandatory Coverage
In Ecuador, the preferred goal is nationwide mobile communications network Number of 30% or Higher
60% or Higher
Band Existing Base within Three
expansion. Therefore, until this goal is fulfilled, a policy to support broadband within Five Years
Stations Years
Internet diffusion by (1) placing a greater emphasis on mandatory coverage and
2.1㎓ Band 7,400 stations 1,110 stations 2,220 stations
compliance rather than maximization of frequency auction profits, (2) providing
frequencies with satisfactory radio wave characteristics, (3) mandating sharing of Source: KISDI
facilities and (4) creating a competitive structure through roaming based on fair
competition, mandatory designation of the top two-ranking companies as MVNOs
It is also necessary to draw up penalties for non-fulfillment of the obligation for
and (5) strict performance inspection. All these should be necessary in granting of
coverage implementation. In general, such measures as threatening to cancel the
broadband licenses and market creation rather than the promotion of broadband LTE.
spectrum allocation or shortening the period of spectrum usage can be taken. As for
the method of allocation cancellation, the issues concerning user protection must
1.2.1 Obligation to Build Network be solved first. On the other hand, implementation of the shortening of the period
of spectrum usage is relatively easier without any problems involved. An example
In most countries, mandatory network implementation is promoted based on of the allocation condition would be to impose a sanction to ‘reduce the period of
their respective populations and cities. However, when only the obligation to comply spectrum usage by 20% when the obligation is not fulfilled within three years.’
1.2.2 Network Opening and MVNO if indeed it could transpire that the 850MHz band allocated only to the top two
companies Claro and Movistar and not to CNT will lead to a distortion in the
To stimulate market competition, network opening, mandatory permits for market competition and, if necessary, establish remedies. At present, 25MHz each
MVNOs and strict inspection of the fulfillment of obligations are necessary. In of the 850MHz band has been reallocated to Claro and Movistar with a utilization
Ecuador, network opening and mandatory MVNO permit systems have already been period of 15 years. Therefore, the reallocated spectrum usage will expire in 2023. As
introduced. Therefore, for Ecuador, a method to give additional points to service discussed in Chapter 2, restriction of participation and spectrum cap systems were
providers that promise to support more than simple network opening and permit designed to resolve the distorted market competition through the allocation policy.
usage in addition to mandatory MVNO permit in spectrum allocation for nationwide If it is considered that a fair spectrum distribution in 850MHz band is necessary and
LTE network expansion will be suitable. In other words, an appropriate method that there is no monopoly formed by spectrum in other bands, a plan to eliminate
for Ecuador would be to auction off a spectrum to a service provider of which the dominant service providers from participation in low spectrum allocation and not to
amount calculated by multiplying the bidding amount with a coefficient according apply the cap system can be considered.
to the company’s promise for MVNO permit is the largest. Another important
requirement is to set out procedures for inspecting fulfillment of obligations and to
2. Spectrum Demand Forecasts and Spectrum
establish powerful penalties for non-fulfillment.
Requirementsfor Ecuador
<Table 5-3> Example of Mandatory MVNO Permit
2.1 Broadband Spectrum Planning by Country
Technical
Economic
Support
MVNO Permit Support Coefficient The advance of various wireless devices including smartphones and development
(Full MVNO
(Resale Cost) of SNS, games and variosstreaming services have led to a dramatic increase in
Permitted)
Level 1 O 1
wireless Internet traffic. This, in turn, resulted in spectrum insufficiency. To prevent
this, countries across the world are establishing long-term policies to calculate and
Level 2 O O 1.5
secure the required spectrums. In March 2010, the U.S. FCC announced its National
Level 3 O O O 2 Broadband Plan to accelerate broadband service infrastructure establishment,
Source: KISDI investment, innovation and utilization in the U.S. and recommended the securing
of spectrums in the 500MHz band within the next ten years for the purpose of
broadband service.
1.2.3 Participation Restriction and Spectrum Cap
•USA : March 2010, National Broadband Plan, FCC
As for FDD in Ecuador, a total of 200MHz, such as 60MHz of the 700MHz band,
60 MHz of the 1900MHz band and 80MHz of the AWS band, can be allocated •UK : April 2009, Predicting Areas Spectrum Shortage, Ofcom
immediately to service providers after 2015. In addition, from the bands available,
continuous broadband spectrum of 40MHz in the 1900MHz and AWS bands can be •Japan : November 2010, Spectrum Re-farming Plan for WBB, Ministry of
allocated to each service provider. Therefore, 1900MHz and AWS bands are likely to Internal Affairs and Communications
become established as the bands suitable for 4G broadband CA. As such, Ecuador’s
IMT candidate bands still have a large amount of affordable spectrums. so, there will •Australia : 2010, Communication Report 2009, ACMA
not be any considerable problem in the broadband spectrum supply itself.
•France : April 2009, Digital France 2012
As for key considerations in allocation policy, encouragement of a nationwide
network installation, competition in the mobile communications market and speed •Korea : April 2011, Mobile Gwanggaeto Plan, MIFP
of service advancement must be taken into consideration. In addition, with regard
to the spectrum allocation, it must be examined from a long-term perspective •Ecuador : 2014, National Broadband Plan, MINTEL
For calculating spectrum requirements necessary for broadband service, various <Figure 5-1> Spectrum Requirement Calculation by ITU-R M.1390
methods are used in each country. The ITU suggests the following two methods. In
this project, M.1390 is used.
•ITU-R M.1768 : Methodology for calculating spectrum requirements for the

terrestrial component of International Mobile Telecommunications
•ITU-R M.1390 : Methodology for the calculatingIMT-2000 terrestrial spectrum

requirements
2.2 ITU-R M.1390 Method for Spectrum Requirement

Calculation
ITU M.1390 considers that the spectrum requirement is affected by
the environment and services offered, and thus calculates the requirement by
multiplication of adjustment factors. • (Topographical Characteristics)
- Potential Subscriber Density (users/km2): Relevant with population fluctuations
The spectrum required (F) in MHz is: in the respective area
- Cell Area (km2): Area of cell for subscriber service
• (Market and Traffic)

Where: - Penetration: Rate of service subscribers to total population
F = Terrestrial Component Spectrum Requirement Units:MHz - Connection Attempts during Busy Hour: No. of service connections tried during
Tes = Traffic/Celles Units: Mbit/s/cell the period of busiest traffic
Ses System capability Units: Mbit/s/MHz/cell - Call Duration in Busy Hour: Service connection time during the period of busiest
αesWeighting factor Units: dimensionless traffic
β= Adjustment factor Units: dimensionless - Activation Rate: Rate of actual data transmission time to service connection time
For this, M.1390 carries out calculation by considering topographical • (Technology and System)
characteristics, market and traffic situations, technology and systems deployed and - S ystem Processing Capacity: Subject to change according to the data
spectrum calculation factors as listed below. transmission rate per unit of spectrum of the service net work as well as radio
wave environment and wireless connection technologies
• (Spectrum Calculation)
- Weighting Factor: Factors for traffic margin in busy hours
- Adjustment Factor: Factors for spectrum calculation according to the number of
service providers
2.3 Spectrum Requirement Calculation Method The Number of subscribers per cell refers to the number of subscribers for
a device within a cell according to teledensity and size and it is calculated by
① Traffic Calculation: To calculateamobile broadband spectrum requirement for multiplying user density with cell area. Cell areas according to cell types and regions
the next ten years, the number of subscribers per cell for terminals of which are listed in the following table.
large traffic volume is expected out of devices to access mobile communications
network at present or in the next ten years is predicted using the formulas below. <Table 5-5> Cell Area and Radius
Teledensity DU SU RU
No. of Subscribers per Cell (persons/cell) = User density (persons/km2)xCell area(km2)
Cell Type Femto Micro Macro Femto Micro Macro Femto Micro Macro
User density (persons/km2) = Service penetration(%) x Population density (persons/km2) Cell Area 0.0016 0.070 0.100 0.0016 0.100 0.150 0.0016 0.150 0.220
Cell Radius 25 164 196 25 196 240 25 240 291
※ It is assumed that population density by year is consistent.
Note): For cell area, ITU-R Rec. M.1768 values were applied. As for cell radius, these were calculated by assuming that the
shape of the cell is a regular hexagon.
As for service penetration, annual penetration was predicted by estimating the
number of subscribers per mobile communication, PC, smart TV or M2M device. The number of subscribers per cell by device type, which is the final calculation
goal, is calculated as of the table below.
Calculation is carried out using the following table.
<Table 5-7> Number of Subscribers per Cell according to Teledensity

<Table 5-4> Service Penetration by Year (Unit: Persons/ cell)
(Unit: %)
Tele- Present Forecast
Device Present T+1 T+2 T+3 T+4 T+5 T+6 T+7 T+8 T+9 Cell Type Device
density T+0 T+1 ---- T+9
Feature Phone 73.9 50.8 35.7 29.3 27.3 27.1 27.5 28.0 28.5 28.9
Feature Phone 34.4 23.6 13.4
Smartphone 29.6 56.5 74.6 83.4 87.2 88.8 89.4 89.7 89.8 89.8
Smart PC 13.8 26.3 41.8
Laptop PC 0.2 0.3 0.3 0.3 0.4 0.4 0.4 0.5 0.5 0.6
Laptop PC 0.1 0.1 0.3
Tablet PC 1.8 2.1 2.4 2.7 3.1 3.6 4.2 4.8 5.5 6.3 Femto
Tablet PC 0.8 1.0 29
Smart TV 0.8 0.9 1.1 1.4 1.7 2.0 2.4 3.0 3.6 4.3
Smart PC 0.4 0.4 20
M2M 10.6 11.0 11.3 11.6 11.8 12.0 12.2 12.3 12.4 12.6
M2M 4.9 5.1 5.8
Source: KCC,Broadband wireless communications spectrum requirement calculation and supply method, (2011) Feature Phone 1506 1034 588
Smart PC 604 1152 1830
For user density, different population densities are applied to DU (dense urban), Laptop PC 5 6 12
DU Micro
SU (sub-urban) and RU (rural) areas. The population densities are calculated with Tablet PC 37 42 129
service penetrations. Smart PC 16 19 88
M2M 215 223 256
Feature Phone 2152 1477 840
<Table 5-5> Population Density according to Teledensity
Smart PC 862 1646 2614
(Unit: persons/km2)
Laptop PC 7 8 17
Teledensity DU SU RU Macro
Tablet PC 52 60 184
Population Density 29,105 16,189 2,068 Smart PC 23 27 126
Source: KCC,Broadband wireless communications spectrum requirement calculation and supply method, (2011) M2M 307 319 366
SU Femto Feature Phone 19.1 13.1 7.5
※ Compiled on the basis of data from Statistics Korea (DU: Seoul, largest area/ RU Femto Feature Phone 24 1.7 1.0
SU: Seoul, average/ RU Area: Gyeonggi-do)
Source: KCC,Broadband wireless communications spectrum requirement calculation and supply method, (2011)
As for traffic per cell, traffic generated in a random cell was calculated by DU, ② Technological evolution is considered by summing the spectrum efficiency
SU and RU using the formulas below. It is estimated that smartphone and video weightings of each technology. Then, the average spectrum efficiency by year
application traffic accounts for more than 80% of total traffic. is calculated using the market share of the technology.
Traffic per cell (bps/cell) = Traffic per user (bps/user) x No. of subscribers per cell (persons) Average spectrum efficiency (bps/Hz/cell) = ∑ (weighting by technology x spectrum efficiency by
technology)
Traffic per user (bps/user) = Total monthly traffic (Bytes/ month) x 8 (bits/byte) ¸ 30 (days/ month) ¸
(3600 (sec.) x time of use per day) x margin ※Only WCDMA, LTE and LTE-A were taken into consideration.
※ Margin: This refers to the rate of traffic in busy hours to average traffic used by Ofcom. For
voice and data service, margins of 1.5 and 1.2 times are assumed. For feature phones, 1.5 times is
applied. For other terminals, 1.2 times are applied. <Table 5-9> Weighting by Technology
(Unit: times)
Device Present T+1 T+2 T+3 T+4 T+5 T+6 T+7 T+8 T+9
<Table 5-8> Traffic per Cell according to Teledensity WCDMA 1 0.7 0.7 0.55 0.4 0.3 0.25 0.2 0.15 0.1
(Unit: kbps/cell) LTE 0.3 0.3 0.45 0.6 0.6 0.6 0.5 0.45 0.4
Tele- Cell Present Forecast LTE-A 0.1 0.15 0.3 0.4 0.5
Device
density Type T+0 T+1 ---- T+9
Feature Phone 35 24 14
Smart PC 928 2011 5622
<Table 5-10> Spectrum Efficiency by Year
Laptop PC 27 30 79 (Unit: bps/Hz/cell)
Femto
Tablet PC 116 159 1226 Device Present T+1 T+2 T+3 T+4 T+5 T+6 T+7 T+8 T+9
Smart PC 557 801 9288 WCDMA 0.3 0.3 0.67 0.78 0.89 1.00 1.00 1.00 1.00 1.00
M2M 126 266 1572 LTE 0.75 0.82 0.90 0.97 0.97 0.97 1.08 1.19 1.30
Feature Phone 1528 1049 597 LTE-A 1.30 1.34 1.38 1.42 1.46 1.50
Smart PC 40580 87967 245949
Laptop PC 1175 1292 3465
DU Micro
Tablet PC 5084 6953 53658
<Table 5-11> Average Spectrum Efficiency
Smart PC 24364 35057 406361 (Unit: bps/Hz/cell)
M2M 5503 11623 68757 Present Forecast
Feature Phone 2182 1498 852 T T+1 T+2 T+3 T+4 T+5 T+6 T+7 T+8 T+9
Smart PC 57971 125667 351355
Spectrum
0.30 0.44 0.72 0.83 0.94 1.02 1.04 1.17 1.27 1.37
Laptop PC 1679 1845 4950 Efficiency
Macro
Tablet PC 7264 9932 76655 KCC,Broadband wireless communications spectrum requirement calculation and supply method, (2011)
Smart PC 34806 50081 580515
M2M 7861 16604 98225
SU Femto Feature Phone 19 13 8
RU Femto Feature Phone 25 1.7 1.0
③ The total spectrum requirement per year is calculated using the previously as usual (B) and Dystopia (C) respectively in comparison to the average spectrum
calculated traffic per cell and average spectrum efficiency. Considering the currently requirement in 2020. Therefore, spectrum requirements for Wire-free world (A),
assignedd spectrum, the amount of spectrum to be additionally secured can be Business as usual (B) and Dystopia (C) are expected to be 124.4%, 83.5% and 75.3%
calculated respectively of the average spectrum requirement in 2020
Spectrum Requirement (Hz) = Traffic per cell (bps/ cell) ¸ average spectrum efficiency (bps/ Hz/ cell) 2.4 Spectrum Requirement Calculation in Ecuador
1) Firstof all, it was considered that the types of mobile terminals in Ecuador are
<Table 5-12> Average Spectrum Requirement similar to those in Korea. Then, the rate of service by year was set as can be
(Unit: MHz) seen in Table 3-12, which is similar to that of Korea in 2010 (initial phase of
Present Forecast LTE introduction).
Tele-
Device
density T+0 T+1 ---- T+9
Feature Phone 8 13 <Table 5-13> Annual Service Subscription Rate by Mobile Terminal Type in Ecuador
DU Smartphone 331 568
Laptop PC 473 812
Tablet PC 5 8
SU Smart PC 298 527
M2M 446 790
Feature Phone 1 1
RU Smartphone 57 101
Laptop PC 84 148
Requirement 260 (Korea) 473 812
Additionally Secured
473-260 552
Amount
Source:KCC, Broadband wireless communications spectrum requirement calculation and supply method, (2011) Source : Internal data of KSP team (2014)
④ Considerations for additional spectrum requirement calculation 2) To calculate the number of subscribers per cell by service type, values in the
following <Table 3-13>were applied as the population per cell area and unit
Cell size change is a factor to be taken into consideration when calculating area (km2), which was provided by the Ecuadorian government.
mobile broadband spectrum requirements. When a macro cell with the largest
spectrum requirement is replaced with 2-tier femto cell cluster, spectrum
requirement is reduced by about 70%. <Table 5-14> Population in Ecuador by Cell Type, Cell Area and Cell Unit Area (km2)
(Subject to Change)
In addition, when an unlimited rate plan is introduced, the rate of traffic usage
Cell Type Micro Small Large Macro
by subscribers rises by approximately 40%, and thus spectrum requirement increases.
Cell Area (Km2) 0.785 3.14 12.56 28.26
Lastly, as for the effect of spectrum requirement fluctuations according to social Population per km2 5000 3000 1000 100
development scenarios, it is calculated that spectrum requirement will increase by Source: Internal data of KSP team (2014)
24.4% for Wire-free world(A) and to decrease by 16.5% and 24.7% for Business
<Table 5-15> No. of Subscribers for Each Terminal Type per Cell in Ecuador 4) As for the average traffic per terminal type to be applied to the project in
Ecuador, it was calculated as (micro + macro)/ 2. Then, the average value
was applied to the calculation as in <Table 5-16>.
5) Wireless spectrum requirement was calculated as in <Table 5-17> by applying

the wireless spectrum efficiency value to the traffic calculated per cell.
<Table 5-17> Traffic per Cell in Ecuador

(Unit: kbps/cell)
Source : Internal data of KSP team (2014)
3) Individual subscriber traffic data was not available at the time of the survey
in Ecuador (Sep. 2014, so traffic per micro/ macro cell by subscriber was
estimated by dividing total cell traffic per subscriber in Korea then theaverage
traffic per mobile device was calculated as in the table below, and the values
used as traffic per handset in Ecuador.
<Table 5-16> Traffic per Subscriber in Ecuador Considering Traffic per Subscriber in Korea
Spectrum requirements for 2016, 2019 and 2022 are shown to decrease from
the previous years.This is because the technological efficiency factor was excessively
considered to the forcast calculation. Fortunately these values can be adjusted
according to market conditions in each country. This result indicates that 540MHz
spectrum will be sufficient for Ecuador until 2023. As the country has a large area in
comparison to its population resulting in a relatively lower population density, the
increasing traffic demand can be handled with spectrum cell placement only.
<Table 5-18> Spectrum Requirements in Ecuador organizations of countries around the world periodically assess the situation in their
market. When competition is assessed as ‘“invalid” due to the existence of market-
dominant service providers and market performances taken into consideration, the
respective regulatory organization seeks a valid competition policy in order to verify
the causes thereof and to resolve the situation. In this process, the regulatory
organization introduces or strengthens the system that appears to be most effective
out of regulatory systems available in the market. The table below lists key
regulatory systems in the communications market for resale, retail and other
categories.
<Table 5-19> Regulatory Systems in the Communications Market

System Resale Regulations Retail Regulations Other Regulations
Source : Internal data of KSP team (2014) • Obligation of

universal service
• Differentiated
imposition of
3. Valid Competition and Mobile Broadband • Interconnection, LLU, • (Retail) rate regulation
contribution
Policy facility supply
• Wireless network
• Regulation on
bundling
• Differentiated
imposition of radio
Key Systems opening, roaming • Prohibition of terminal
wave fees
• MVNO, resale subsidy
3.1 Valid Competition Policy – De-symmetrization of • Special business • Number portability/
• Accounting
separation
interconnection fees – Differentiated imposition of system number integration
• Equity restriction for
radio wave fees foreigners
• Merger and
acquisition
Regulations for a specific market can be divided largely into symmetric
regulations and asymmetric regulations. Symmetric regulations refer to regulations Source: Lee Sang-gyu, KISDI, Valid Competition, KISDI Expert’s Column,(2005)
applied with the same contents and intensity to all service providers that are under
the same conditions. On the other hand, asymmetric regulations are those applied
Although a variety of political measures are available as of the above, some are
with different contents and intensity to each service provider with attention paid to
difficult to implement or, for others, the effects of implementation are insignificant.
the different conditions that each service provider is facing.
Therefore, to ensure effects of the policy implementation, it is necessary to set fixed
amounts of the effects by considering various aspects of the policy implementation.
With regard to market competition, it is impossible for a perfect competitive
Of the mainly discussed valid competition policies, those necessary Ecuador are as of
market to exist in reality and, as an alternative, the concept of workable competition
the following.
has been suggested. Then, through numerous discussions, the concept of effective
competition was introduced. The policies to make the conditions of an inefficient
First is de-symmeterization of the interconnection fees in order to secure
monopolistic or oligopolistic market similar to those of effective competition, which
equality according to spectrum characteristics and to alleviate spectrum superiority.
is close to perfect competition, through asymmetric regulations are collectively
Considering that Korea has established a policy in 2004 for PCS providers to put
referred to as effective competition policy.
in more than twice the investment and administrative costs of cellular services
according to radio wave characteristics in order to accelerate mobile communication
When the concept of effective competition is applied to thecommunications
market competition, the ratios of radio wave fees for cellular services and PCS
market, different competition situations arise in each market. To identify
under the same condition were set as 1: 0.7. In other words, although companies
competition situations by each market and reasons for the differences, regulatory
with a larger number of subscribers are imposed with higher radio wave fees even 3.2 Mobile Broadband Industry Promotion Policy
according to the existing formula, the revised formula, which was reflected with
a radio wave characteristics coefficient, provides late starters with effectively a In general, funds are raised and managed in relation to specific projects off-
radio wave fee reduction of around 30% of existing companies’ radio wave fee budget so as to ensure more flexible and swift budget management by deviating
with the same number of subscribers. In the end, this was assessed to substantially slightly from the general budget rules and principles for the purpose of realizing the
strengthening valid competition in the market. government’s special political goals.
Ecuador has already introduced a differentiated radio wave fee system. However, Funds, as such, are used for long-term core technology development,
it is necessary to examine the calculation formula and coefficient to determine establishment of a foundation for the ICT industry and stable support of basic
if it is up to a standard to solve the distorted competition structure. In Ecuador, science and also for supplementing support to small and venture companies’
spectrums for which allocation cost is not imposed through auction or competitive technology development and investment and funding from private financial entities.
bidding and public spectrums are divided into 15 types based on the service types
and bands according to the Regulation of Rights Grant and Fees for Using Frequency Since 2000, Ecuador has been operating its FODETEL (Fund for
Spectrum Radio, and thus the fees are estimated for each type using a set formula Telecommunications Development in Rural and Marginal Urban Areas) to support a
and monthly imposed monthly. To fulfill the important goal of a fixed rate system, communications infrastructure in underdeveloped areas. In this report, the contents
which is to use a reasonable formula that includes coefficients subdivided by service of FODETEL are analyzed in terms of its effectiveness at securing and handling
and band types or to achieve nationwide network expansion, a review from the financial resources, and necessary improvements are suggested.
standpoint of a valid competition policy is necessary. At the same time, in terms
of radio wave fees in the granting of licenses, a plan to grant special benefits to
3.2.1 Financial Resources
companies laying out nationwide networks can be considered.
In Ecuador, radio wave fees are imposed on public spectrums or spectrums

Another valid competition policy necessary to be introduced to Ecuador is
for which allocation cost is not applied as the allocation was carried out through
de-symmetrization of interconnection fees through improvement of the
an auction or competitive bidding according to the Regulation of Rights Grant
interconnection method. For competition improvement in the communications
and Fees for Using Frequency Spectrum Radio. Most of the previously allocated
market, service providers with a business scale and market share higher than a
mobile communications spectrums have not been distributed through competitive
certain level that satisfy the applicable conditions are defined as market-dominant
bidding. Only the 850MHz band used for 2G and 3G services was granted through
service providers and these companies are applied with preliminary regulations
competitive bidding and other spectrums in the 700MHz, 1700MHz and 1900MHz
for retail fees, facility supply and interconnection. In addition, when companies
bands were allocated simply without competition, and thus are not subject to
fail to fulfill such regulatory obligations, they are subject to follow-up regulations
application of the regulation. According to this regulation, spectrums are divided
for misusing their market dominant positions. In particular, interconnection fee
into 15 types on the ground of the wireless service types and bands, and radio wave
de-symmetrization through interconnection method improvement is to change some
fees are calculated for each type using a formula and with the fees beingmonthly
connection rates as a means of consideration for late starters in the market in order
imposed. The radio wave fees for fixed and mobile services for 30MHz in 960 MHz
to achieve rational improvement of the connection fee estimation between first
band are as follows:
and late comers by solving reverse discrimination of the estimation method through
connection fee system improvement. Implementation of this system will be necessary
in Ecuador as it is considered to be helpful in the competition system improvement.
onthly imposition (US$) for fixed and mobile services for 30MHz in the
M
It is an extremely important goal for all countries to continuously and efficiently
960MHz band =Kiα× α2× β2×A × Fp
secure and improve valid competition in the communications market. Therefore, in
addition to introduction of the systems and promotion of the improvement plans
K = Adjustment factor for inflation.
suggested in this report, political efforts must continuously be made in order to
α = Coefficient spectrum valuation for mobile service bands above 30 MHz,
increase rationality, transparency and predictability of the regulatory policies.
β = Correction factor for the Mobile Service in bands above 30 MHz, not is showing signs as of late to drastically increase the rates, which is encouraging.
multi-access. However, it must endeavor to achieve success this time by handling service providers’
A = Bandwidth of the assigned frequency in kHz. opposition effectively.
F = propagation factor (according to Tables 2 through 5, Appendix 2).
3.2.2 Operation
In terms of the allocation method, it is fundamentally ideal to spread the
auctioning system. However, as the auctioning system cannot be actively utilized FODETEL (RULES FOR THE ADMINISTRATION OF FUND DEVELOPMENT OF
as a result of the special market conditions in Ecuador, it was appropriate to select TELECOMMUNICATIONS IN RURAL AREAS AND URBAN FRINGE) is comprised of such
a radio wave fee system as the second best plan. However, the appropriateness of contents as the objectives and operating policy to follow MINTEL as well as various
the allotment scale and rationality of the calculation formula must be examined clauses concerning agreement with service providers and financial support.
continuously.
In addition to radio wave fees, all common carriers holding a service license
are paying 1% of their annual sales as a contribution to FODETEL (Fund for
RULES FOR THE ADMINISTRATION OF FUND DEVELOPMENT OF TELECOMMUNICATIONS IN
Telecommunications Development in Rural and Marginal Urban Areas). In other RURAL AREAS AND URBAN FRINGE, FODETEL.
words, the Ecuadorian government is imposing a contribution to FODETEL for (RESOLUTION TEL-215-05-CONATEL-2011 24.03.2011)
communications service development in rural and non-urban areas in Ecuador.
In general, South American countries are collecting universal funding resources CHAPTER I : SCOPE AND DEFINITIONS
from service providers based on the benefit principle for the purpose of providing CHAPTER II : MISSION, GOALS AND OBJECTIVES
services to underdeveloped regions. In Columbia, mobile service providers and CHAPTER III : ADMINISTRATION AND MANAGEMENT STRUCTURE
supplementary service providers are paying 5% and 3% respectively of their CHAPTER IV : RESOURCES
revenues. However, in other countries, the companies are required to pay 1% of CHAPTER V : LANES OF PROGRAMS AND PROJECTS
their total revenues. CHAPTER VI : CONVENTIONS OF FINANCING
CHAPTER VII : AGREEMENTS WITH THE OPERATORS
CHAPTER VIII : OF L OS COOPERATION AGREEMENTS
In Ecuador, the government’s promotion policy to invest in communications
CHAPTER IX : AUDIT AND MANAGEMENT PLANS, PROGRAMS, PROJECTS AND
infrastructure has not been producing noticeable effects in fixed telephone or
CONVENTIONS
Internet distribution as a result of the FODETEL introduction. This is because, when
CHAPTER X : DESTINATION OF GOODS AND SERVICES
FODETEL was established in 2000, the government’s original plan was to collect 4% CHAPTER XI : DEBTS TO FODETEL
of revenues from service providers. However, the rate was lowered to 1% as a result
of the service providers’ opposition and it was stipulated to have the imposition rate
specified in concession contracts with the service providers. In addition, FODETEL
clashed with SENATEL’s regulations. In the event, a Universal Service Plan was UREGLAMENTO PARA LA ADMINISTRACIÓN DEL FONDO PARA EL DESARROLLO
approved and FODETEL was transferred into SENATEL’s administrative organization. DE LAS TELECOMUNICACIONES EN ÁREAS RURALES Y URBANO MARGINALES,
As such, the lack of financial resources as a whole led to insufficiency and instability FODETEL. Reformado. (RESOLUCIÓN TEL-215-05-CONATEL-2011 de 24.03.2011)
in the available financial resources. As a result, Ecuador’s efforts for securing financial
resources did not produce any considerable outcomes despite the government’s 1) Vision and Goal Setting
communications infrastructure investment promotionpolicy.
As for the communications development fund, the goals and visions must
In relation to R&D financing, the Ecuadorian government must estimate beclearly established. FODETEL processess such elements well. For reference, the
appropriate rates and impose the fees to service providers through negotiation, and process setting the goal and vision of the development fund is outlined below.
thus invest the collected fees for implementing a nationwide network and fostering
competitive service providers. With regard to this, the Ecuadorian government
The communications development fund is raised for the purpose of promoting •Fairness, transparency and minimization of inconvenience
the localcommunications industry. It requires a vision to promote public welfare and It is necessary to ensure fairness and transparency of allotment by prescribing
communications industry development. The vision must effectively support industrial the basic rules concerning the allotment system installation, management and
policy according to changes in the communications market. In addition, it is very operation.
important for the vision to suggest a direction for fund management. To suggest
an appropriate vision, a mid to long-term vision for Ecuador will be reestablished •Legal principles of allotment
through redefinition of the missions and relevance between the overall mission and The ground law for allotment imposition must specify the entities of allotment
the mid to long-term vision will be reexamined. imposition and collection, purpose of allotment system installation, conditions
for imposition, allotment calculation standard, calculation method and
The communications development fund must be able to contribute to the imposition rates clearly and in detail.
business undertakings of MINTEL, which is a higher-ranking organization, and,
at the same time, hold a mid to long term vision of its own. It is required to share •Stable securing of financial resources
the vision and strategic goals of MINTEL, which is both a fund management entity A long-term and stable financial resource management is required for stable
and decision-making entity, and this requirement is naturally resolved when the fund management.
fund is located under the management of MINTEL. In general, a strategic goal
includes several performance goals and performance goals are again divided into •Improvement of expertise of the institutes consigned of fund management
performance goal management tasks. In addition, various financial projects are To improve expertise of the institutes in charge of fund management, it is
established according to the performance goals. necessary to foster experts through systematic training and mid to long-term
re-training.
<Figure 5-2> xample of Vision and Goal of the Communications Development Fund
The rules above are already included in FODETEL. However, for Ecuador, the
establishment of a national think tank is considered important. This will bring
about a virtuous cycle of performances for radio broadcasting R&D fields as well as
among academic circles and the overall industry. Accordingly, R&D results will build
Vision
Vision of FODETEL up and the results will lead to ICT industry outcomes. Ultimately, this will provide an
opportunity for the national ICT industry advancement.
Strategic goal
Strategic goal
Performance 4. Technological Suggestions for Mobile

Broadband Services in Ecuador
Performance Performance Performance
goals goal 1 goal 2 goal 3
Performance goal Management Management Management

management tasks task 1 task 2 task 3
4.1 Technology Standards for LTE Implementation
Performance Assessment Assessment Assessment
indicators indicator 1 indicator 2 indicator 3
The establishment of the 3GPP Release-8 standard for LTE settledin 2009 has
led to Release-10 through continuous development. In 2016, Release-13 will be
Source: KISDI announced. According to the advancement of mobile broadband technology as
such, it is expected that 5G service supporting 1Gbps download service, which is
2) Basic Rules of Allotment ten times faster than the current speeds, will be commercialized around 2020. With
this in mind, it is important to select an LTE version that is suitable for more direct
Although FODETEL is already well established, the basic principles of allotment evolution while also fitting the current mobile broadband plan in Ecuador and
below must be observed. consideration future standardizationdevelopments.
<Figure 5-3> LTE Version Standardization Schedule 4.2 Key LTE Technology Application
To 4G IMT-advanced, new advanced functions, such as carrier aggregation,
high orderMIMO, CoMP and relays can be applied as shown in<Figure 5-5>to
achieveproper broadband width as well as multiple antenna expansion, alleviation
of cell interference and coverage expansion.
<Figure 5-5> LTE-Advanced Network Technology Application
Source: 3GPP (2013)
<Figure 5-4> below lists the characteristics of each LTE version. According to a Source: 3GPP (2012)
local equipment supplier Huawei, Ecuador's 3G and LTE services at the moment
are applied with Rel.7 and Rel.9 respectively. Accordingly, advancement to Rel.12
•Carrier Aggregation
and Rel.13, which facilitate networks evolution and contain the concept of disaster
Carrier aggregation enables broadband transmission by aggregating a multiple
network, is recommended.
number of continuous or discontinuous spectrum bands, and thus increases data
transmission speed. This technology improves the efficiency of spectrum usage by
<Figure 5-4> Characteristics of LTE Versions increasing trunking efficiency.
•High Order MIMO

High order MIMO enhances spectrum efficiency by expanding the maximum
4x4 MIMO of LTE to up to 8x8 MIMO, and thus increasing the maximum data
transmission speed and cell throughput.
•CoMP
CoM improves transmission speed in the cell boundary area and lowers cell
interference through cooperative multiple transmission between base stations. This
technology increases cell throughput and efficiency of spectrum usage.
•Relays
The use of relays expands coverage by relaying wireless resources of a mother
base through relays plays in the network to increase users’data transmission speed
Source: 3GPP (2008~2013) within cell boundary areas.
• Small Cell Network Implementation 4.3 LTE Network System
It is estimated that the current wireless network, which is designed centering The configuration plans for the LTE system to be built in Ecuador are as follows:
on outdoor coverage, is limited in effectively accommodating village unit coverage
in dense forest areas where a traffic increase is expect. To overcome this limitation,
1) Access Network
Ecuador can increase LTE wireless network traffic capacity and improve the spectrum
efficiency by using small RUs and femtocells. A typical femtocell configuration is
The access network should be comprised of capacity-type base stations only
shown in <Figure 5-6>.
for the purpose of capacity maximization. As for base stations, CPRI transmission
technology, to DU-RU interface as suggested by 3GPP, should be applied so as to
<Figure 5-6> Femtocell Configuration separate base stations into those for DU and remote RU. In addition, centralized
DU implementation in each region is ideal for reducing the expensive base station
LTE Network
lease fee in central Quito areas. <Figure 5-7>shows a schematizesfor a wireless
Femto gateway
network applied with CPRI technology. The wireless network is applied not only
to existing base stations but also to outdoor gap fillers to expand coverage, and
General thus provides the effect of increasing traffic capacity in areas subject to high traffic
Internet
density. Base stations that provide wireless connection with OFDM (downlink) and
SC-FDMA (uplink) terminals are linked with the core network through an IP network.
IP network
Femtocell AP
Considering traffic and coverage by topology, such as urban centers, suburban areas,
in-building and in-house, standard, compact and femtocell type base stations can be applied.
<Figure 5-7> DU-RU Basic Concept

Source: KT Internal Report (2012)
<Table 5-20> Considerations for LTE Technology Application to Ecuador

LTE Technology Plans for Application to Ecuador Note
Carrier Aggregation Areas with large data demand, such as Quito After 2016
High Order MIMO Gradual application After 2018
CoMP Application to cell boundary areas After 2016
Relays Applicable to mountainous and border areas 2015
Small Cell Network Applicable to small-scale and remote areas, such as
2015
Implementation forest
Source: Result of KSP report (2014)
Source:CPRI (1): Overview of LTE eNodeB interface between BBU and RRH(2014)
2) Core Network distribution be mounted with WCDMA and GSM capabilities in order to ensure
phased implementation of the LTE network and overseas roaming service. The key
The core network is comprised of an EPC, IMS core system and control and billing functions and specifications of smartphone type LTE terminals, which will be the
devices. It provides key functions for multimedia service in the overall network, such most universal type of LTE terminal, are listed in <Table 5-21>.
as subscriber management, various call processing, routing and internetwork linking.
<Figure 5-8> Mobile Communications System Core Network Configuration <Table 5-21> Smartphone Type LTE Terminal Specifications
Classification Item Description

LTE (Downlink: OFDM/ Uplink: SC-FDMA), WCDMA
Wireless connection
(HSPA, GSM
Baseband signal Channel coding, modulation and OFDM digital signal
processing processing
Wireless resource control signaling and packet call

Call processing and
Function sending/ receiving
mobility support
Handover between base stations/ sectors
Voice call, video call and data service connection

Service connection
processing
USIM and interface User authentication and mobility support, interface
function with peripherals
Source: Jeong Wu-gi, Chungkang College of Cultural Industries(2013) LTE: Multiple global spectrums supported (multi-
band)
Frequency band
WCMDA (HSPA), GSM: Multiple global spectrums
•EPC(Enhanced Packet Core) supported
EPC is comprised of an IP-based switching type MME, S-GW and P-GW2 and LTE: 1.4/ 3/ 5/ 10/ 20MHz (Default Bandwidth:
Specifications
provides packet-based multimedia service. Channel bandwidth 10MHz)
WCDMA (HSPA): 5MHz, GSM: 200kHz
•IMS Core System Max. output 23dBm
TheIMS core system provides multimedia service, such as RCS3 in an all-IP
OS Windows Mobile, Android, Symbian, Linux
environment. In Ecuador, CONECEL and OTECL, which have WCDMA networks,
can provide IMS service in an LTE network by using the existing IMS systems, Source: KT Internal Report (2012)
such as CSCF and MRF4.
3) Terminals 4) Transmission Network
For mobile broadband network service in Ecuador, it is requisite to introduce and The transmission network is comprised of devices for signal and traffic delivery.
activate LTE service and then improve the efficiency of communication services. In For CNT, they can build an Ethernet-based LTE transmission network using the optical
addition, to maximize the effects of service environment improvement, increased transmission network owned by the government and 10Gbps backhaul. As for the
distribution of smartphone type terminals providing high-quality multimedia services LTE backhaul network, considering hetraffic capacity of the DU concentration center,
and mobile office functions is essential. In addition to portable terminals, a variety of it is recommended to configure it in a way to accommodate base station traffic
terminals ranging from wireless modem, Internet of things (IoT) and MID terminals through the IP backbone network using line concentration switches and to connect
must be provided. At the same time, it is recommended that all LTE terminals for the traffic to a switch center.
4.4 Plans for Mobile Broadband Network Evolution in has a small amount of traffic for which only around 2FA is required. Therefore, the
Ecuador Using Existing Infrastructures 1Mbps level mobile broadband service requested by the Ecuadorian government
can be achieved without any additional investment. When additional traffic is
Traditionally, a mobile broadband network is established by scaling up the HSPA/ generated, capacity can be maximized through cell division as illustrated in <Figure
HSPA+ according to the increase of subscriber data in the previously installed 3G 5-10>. In other areas, capacity is increased through extension of the FA according to
network and then migrating to the 4G LTE network when a greater data demand is the traffic increase trend. As such, CONECEL and OTECEL have a competitive edge
generated. A new and radical method is to promote migration directly from 3G to in terms of network capital for the supply of mobile broadband service to their
4G LTE. The strengths and weaknesses of each evolution method are as outlined in customers.
<Figure 5-9> below. Network implementation through direct migration to LTE has
the advantage of preventing investment overlap for 3G/ 4G. Ecuador’s OTECEL and <Figure 5-10> Conceptual Diagram of Cell Division Plan
CONECEL plan to effectively accommodate customers’ wireless data service demand (Sector 1)
by advancing their existing WCDMA and WiFi networks. Therefore, gradual LTE
introduction is expected. As for CNT, which does not have a 3G network, it has the
financial burden to invest in both HSPA and LTE networks.
(Sector 1)
(Sector 2)
(Sector 3)
<Figure 5-9> LTE Network Implementation Method
(Sector 2)
New sector New sector
(Sector 2) (Sector 1)
(Sector 3)
Existing New base Gap filler

base station station
2) Scenario of Mobile Broadband Service for CNT
CNT, which does not have a 3G network, and thus is providing service by
sharing a 3G network with OTECEL, is building a voice call fallback network while
establishing an HSPA network. At the same time, with LTE frequencies assigned
by the government, CNT is already building some sections of its LTE network.
In addition to these methods, CNT can employ a radical implementation plan.
Considering the fact that Korea’s LGU+, while being a 2G CDMA service provider,
increased its market share from 14% to almost 20% simply by providing LTE service
without a WCDMA or a HSPA network, it can be seen that building a nationwide
4G LTE network without first going through 3G or 3.5G can be a viable alternative
for CNT. This is because, as indicated in the <figure 5-11>, an LTE network can be
1) Scenario of Mobile Broadband Service for CONECEL and OTECEL installed more economically than 3G network and also because supply of terminal
and network equipment linked with a variety of wireless technologies is possible.
CONECEL and OTECEL, which already have 3G networks, have been promoting
an upgrade from WCDMA to HSPA in line with the technological evolution of 3GPP
since 2012 (consultation between KSP team and CONECEL). Ecuador’s HSPA network
<Figure 5-11> LTE Network Implementation Efficiency As a result, 146 parroquias with more than 15,000 residents were selected as
target areas for base station construction. This will provide sufficient a coverage to
provide service to 10,959,240 people, which is approximately 76% of Ecuador’s total
population of 14,483,499 (according to the 2010 population census). The service area
is 44,410.31 Km2 which corresponds to approximately 17% of Ecuador’s total area.
<Table 5-22> Administrative Districts in Ecuador and LTE Target Area Selection
Serviced
Target Service Area
Provincia Canton Parroquia Population
Parroquia (Km2)
(persons)
AZUARY 15 75 7 447,120 789.34
Source: KT Internal Report (2014) BOLIVAR 7 26 1 55,374 519.56
CAÑAR 7 33 3 98,940 256.95
CARCHI 6 32 2 81,499 291.07
4.5 Basic Design of eNode-BNetwork in Ecuador
COTOPAXI 7 40 4 199,354 941.75
CHIMBORAZO 10 55 5 232,301 967.70
In this section, the number of eNode-Bs for a basic design is calculated in order
to estimate a rough investment scale under the assumption of building an LTE EL ORO 14 63 7 464,946 1,310.13
network for nationwideMBB service in Ecuador. For actual network implementation, ESMERALDAS 7 64 7 351,698 3,615.25
it is necessary to consider the results of the field studyin the installation areas as well GUAYAS 24 54 24 3,376,168 9,656.04
as the conditions of various communication infrastructures for backbone network IMBABURA 6 42 5 250,434 449.13
establishment. Therefore, details of the basic design described in this section can be LOJA 16 92 4 241,103 1,173.76
used for reference for estimating a rough LTE network investment scale. LOS RIOS 13 27 17 685,668 6,002.24
MANABI 22 75 19 1,022,714 8,378.04
1) Selecting Areas for eNode-B Installation MORONA
12 58 1 19,176 53.33
SANTIAGO
First, it was necessary to establish the standards for regional and population NAPO 5 23 1 33,934 261.84
information of Ecuador in order to best select of eNode-B installation target areas. PASTAZA 4 21 1 36,659 87.67
To do this, figures from the 2010 census officially provided by the Ecuadorian PICHINCHA 8 60 22 2,381,241 3,795.62
government’s website were utilized. According to the census data, Ecuador is divided TUNGURAHUA 9 53 3 224,155 140.05
into three administrative units – Provincia, Canton and Parroquia. Provincia is the ZAMORA
9 35 0 0 0
largest administrative district and Parroquia is the smallest. The numbers of cantons CHINCHIPE
and parroquias in each provincia, which is similar to Korea’s ‘Do (province)’ are as in GALAPAGOS 3 8 0 0 0
the table below. SUCUMBIOS 7 33 2 84,103 832.18

ORELLANA 4 33 2 63,097 342.69
For LTE installation target selection, the Ecuadorian government’s goal to SANTO
1 8 1 305,632 1,092.89
DOMINGO
build broadband coverage for 76.8% of the population by 2020 was taken into
SANTA ELENA 3 11 7 283,166 2,965.05
consideration. For this, areas and populations of the smallest administrative district,a ZONAS NO
3 3 1 20,758 33.88
‘Parroquia’, were investigated, and thus the areas subject to eNode-B installation DELIMITADAS
were selected. Total 222 1,024 146 10,959,240 44,410.31
Source: Ecuadorian census website (http://www.ecuadorencifras.gob.ec/informacion-censal-cantonal), (2014)
2) Conditions for Estimating the Number of eNode-Bs <Table 5-24> No. of Base Stations Required by Region
In Ecuador, there are almost no dense urban areas where population is densely No. of Base No. of Base
Type Type
Stations Stations
concentrated, such as in Seoul, Korea. In contrast, Ecuador has manycommunities of
small populations that are widely distributed across broad areas. In the basic design, Dense-Urban 655 Suburban 1,352
the number of eNode-Bs was estimated based on Ecuador’s population characteristic
Urban 257 Rural 919
by assuming macro cell base stations rather than the pico cell eNode-Bs built in
densely populated areas, such as Seoul. Source: Internal data of KSP team (2014)
However, considering that the parroquias selected as targets of this project were In addition, the numbers of base stations calculated by provincia are listed in the
comprised of areas with both high and relatively lower population densities, the table below.
parroquias were divided into four areas according to population density with the
number of eNode-Bs built in each subdivided area calculated by assuming that they
<Table 5-25> No. of Base Stations per Provincia
are subject to different cell radiuses according to population density.
No. of No. of No. of
Provincia Base Provincia Base Provincia Base
<Table 5-23> Standard for eNode-B Cell Radius Application according to Population Density Stations Stations Stations
AZUARY 124 GUAYAS 590 PICHINCHA 700
Type Population Density Cell Radius
Dense-Urban 3,000/Km2 or more 0.5 Km BOLIVAR 41 IMBABURA 36 TUNGURAHUA 67
Urban 1,000 ~ 3,000 /Km2 1 Km CAÑAR 20 LOJA 61 SUCUMBIOS 46
Sub-Urban 100 ~ 1,000 /Km2 2 Km CARCHI 23 LOS RIOS 297 ORELLANA 19

Rural Less than 100/Km2 3 Km SANTO
COTOPAXI 75 MANABI 444 87
DOMINGO
Source: Internal data of theKSP team (2014) MORONA
CHIMBORAZO 55 4 SANTA ELENA 145
SANTIAGO
ZONAS NO
EL ORO 136 NAPO 21 17
DELIMITADAS
Ecuador is comprised largely of rural regions where population density is less than
ESMERALDAS 167 PASTAZA 7
100 persons/ /km2. In executing the design, which is for the actual construction of
base stations, it is estimated that the construction of base stations will be difficult in Source: Internal data of KSP team (2014)
a considerable number of areas due to the lack of infrastructure, such as steel towers
and backhauls. The following figure shows the numbers of base stations together with
population density in each provincia. Cantons in each provincia are distinguished
3) Result of eNode-B Basic Design with different colors according to population density. In addition, numbers in
brackets indicate the numbers of base stations to be built in the respective provincia.
As for the number of base stations applied to the basic design, the number
of eNode-Bsneeded was calculated by applying the cell radius according to the
population density in the area of each parroquia based on an the assumption that
LTE service is to be provided to the total area of each parroquia selected as target
areas. As a result of the calculation, it was found that a total of 3,183 base stations
will be necessary.
<Figure 5-12> No. of eNode-Bs per Provincia <Figure 5-13> The Three Key Components of IoT
Population density 150 persons

or more/km2
Population density 100 – 149
persons/km2
Population density 100 persons/
km2
Population density 100 persons/
km2, areas excluded from LTE
implementation
Source: Result of KSP team (2014)
4) Additional Considerations
Additional considerations include investments to secure coverage and network

capacity. Based on the situations in Ecuador, network implementation to secure
coverage was assumed in the basic design. In large cities with high population
density, such as Guayaquil or Quito, it may be necessary to increase base stations for
additional capacity extension following the initial securing of network coverage.
4.6 Network Enhancement: IoT and 5G

1) IoTOverview
IoT (Internet of things) is a network to connect object spaces that form mutually
cooperative intelligent relationships, such as of sensing, networking and information
processing, without explicit human intervention in relation to the three dispersed
environmental elements, which are humans, objects and services.
Source: Korea Internet & Security Agency (2013)
Objects, which is a key component of IoT, include not only end-devices in According to the market surveyor MarketsandMarkets (2012), the IoT service
fixed and mobile networks, but also humans, vehicles, bridges, various electronic market is expanding centering on public safety and retail fields through convergence
equipment, cultural properties and physical objects composing the natural with various industries. It is forecast of expand centering not only on existing
environment. healthcare and smart energy technologies, but also intelligent transportation
services and public infrastructure (buildings,bridges,etc.) remote management
IoT evolves into the concept of interaction with not only all information in real services.
and virtual worlds, but also objects by expanding the concept of M2M, which is
intelligent communication between humans and objects and also between objects,
<Table 5-27> IoT Vertical Service Market Scale
to the Internet.
(Unit: $100M)
CAGR%
Type 2011 2012 2013 2014 2015 2016 2017
<Figure 5-14> Changes in the Concept of M2M and IoT (2012~2017)
Public Safety &

7.9 13.8 21.6 28.7 34.9 41.8 48.7 28.7
Urban Security
Retail 8.8 15.3 34.0 32.0 38.9 46.5 54.2 28.8
Healthcare 4.0 6.9 10.6 14.0 16.7 19.5 22.4 26.6
Energy & Power 2.6 4.8 7.8 10.7 13.5 16.8 20.6 33.8
Transportation 2.0 3.9 6.7 9.8 12.9 16.6 20.5 39.5
Telecom & IT 5.3 9.2 14.3 18.9 22.6 26.5 30.3 27.0
Consumer & Residential 6.2 10.5 16.1 21.1 25.4 30.0 34.5 26.9
Industrial & Commercial
3.3 6.0 9.6 13.2 16.5 20.5 24.9 33.0
Buildings
Manufacturing 2.4 4.5 7.2 10.1 12.6 15.8 19.6 34.4
Others 1.5 2.9 4.8 6.8 8.9 11.3 14.2 37.6
Total 44.0 77.7 122.7 165.3 202.8 245.2 290.0 30.1
source: Korea Internet & Security Agency (2013) Source: MarketsandMarkets( 2012)
2) IoTMarket Forecast and Industry Trend

As for the IoT industry trend, new market value creation is expected in line with
The scale of the global IoT market is expected to grow from KRW26.82 trillion in the distribution of intelligent terminals, such as smartphones, smart cars, smart
2011 to KRW 47.07 trillion in 2015. As for the domestic market, the scale is estimated watches and smart goggles.
to increase from KRW 414.7 billion in 2011 to KRW 1,347.4 billion in 2015.
According to the Global Mobile Communications Industry Association, the
number of global connected terminals is estimate to increase from approximately 9
<Table 5-26> Global and Domestic IoT Market
billion in 2011 to around 24 billion in 2020and the marketis expected to grow from
Type 2011 2012 2013 2014 2015 CAGR $593.7 billion in 2011 to KRW 1.986 trillion in 2020.
Global Market
26.82 29.18 35.61 42.49 47.07 11.9%
(KRW trillion)
Korean Market
4,147 5,674 7,201 10,338 13,474 26.6%
(KRW trillion)
Source: Date (2011), KAIT (2012)
3) IoT Services in Korea <Figure 5-16> Smart Home Service
a) Smart Farm Service
SK Telecom is providing a proprietaryintelligent vinyl greenhouse management

system in Jeju Island and Gyeongsangbuk-do, it calls ‘Smart Farm Service.which
enables remote controlof the supply of water, fertilizer and drainage as well as the
interior temperature and humidity of vinyl greenhouses using smartphone.
<Figure 5-15> Smart Farm Service
Source: KT (2013)
c) Intelligent Vehicle Control Service
LGU+ is providing a real-time vehicle control service through a link between a

DTG (digital tacho graph) and IoT platform to trucks, buses and taxis. The company
has also provided real-time vehicule information to traffic control center using LTE-
based IoT solution such as operating conditions, speed and moving distance and
even crew and passenger management during the YEOSU EXPO 2012 in Korea.
<Figure 5-17> Intelligent Vehicle Control Service

Related
organizations
(112/119 center, Ministry of Land,
police, insurance Infrastructure
company) Maintenance shop and Transport
Source: SKT (2013)
Operation analysis
b) Smart Home Service report
Real-time Wireless operational report/ Emergency rescue Customer

vehicle control Breakdown and accident notice/ Theft tracking information/
KT is providing various IoT services, such as home security ,electric power control Driving information/
Diagnosis information/
Vehicle
information/
Driving
and electricity & gas consumption reading using smartphones. From remote Vehicle information
distance/
Diagnosis
locations, users can use their smartphones to monitor the climates of their homes in information/
Diagnosis
real-time and even control the lighting and doors through IoT platform. In addition, Logistics company
history/
Breakdown
(Platform) explanation
users can be able to use smart remote control service provided by real-time intruder vehicle management
center
Control in reverse
direction
Control center DTG history
and fire alarms.
Source: LG U+(2012)
d) Smart Grid Service Advancement towards fixed, wireless and ICT convergence to compositely
provide diverse services according to the needs of IoT is forecasted. Ultimately, this
A small-scale IoTcompany in Korea, Nuritelecom build a smart city targeting will lead to an evolution to ubiquitous service, which offers all services through any
265,000 households in Gothenburg, Sweden that uses a wireless mesh connection networks anytime and anywhere using all devices. It is also expected that
communications network based on ZigBee near field wireless technology.And also, the network will advance in a direction to accommodate such service evolutions, and
thhe companyprovided a remote AMI (advanced metering infrastructure) to low- thus will develop into the ubiquitous-based 5G communications network structure as
voltage (100,000V) households in Ghana in 2015.Nuritelecom provides atotal AMI shown in <Figure 5-19>.
solution that consists of a smart meter, data concentration unit (DCU) and a platform
mounted with remote meter reading modems based on wireless Mesh network and
<Figure 5-19> Development Direction to Realize Ubiquitous Service Network,
GPRS (General Packet Radio Service) technology.
which Serves as the Basis for 5G Service
Convergence service
Application
Open type
4) 5G Mobile Communications and Internet of Things standard interface
All-IP integrated Core

network network
At present, Ecuador’s 3G – 3.5G networks can successfully provide voice&video
call, SMS and small-scale data service. However, these networks are limited in terms
Home
of data speed and service latency time. Considering that the demand for large-scale G/W
Access
multimedia information and interactive communication is increasing, evolution network
towards high data transmission speed and short latency time is expected together
with the advent of interactive multimedia service in the future. Once the evolution Fixed Mobile
communications Home network Broadcasting communications
Sensor network
is achieved, an LTE-based mobile broadband service will be possible. Nevertheless, network network network
Multifunctional,
as shown in <Figure 5-18>, the proliferation of IoT around the world will require a composite
terminals
service network to satisfy 20 – 50 times the current connection need by around 2020.
Source: ETRI (2014)
<Figure 5-18> New Connection Demand according to IoT Evolution 5G mobile communications technology is for the Beyond IMT-Advanced mobile
communications service, which is the next stage of IMT-Advanced service. It refers to
technologies relating to wireless interface and mobile communications connection
networks. It aims to provide 1Gbps levelcommunications service to each mobile
subscriber.
<Figure 5-20> Purpose of 5G Network Technology according to IoT Expansion
Source: 5G & Giga Networking Vision in Korea, ETRI (2014) Source: ETRI (2014)
5) 5G Technology Study Trend 6) 5G Studies in Korea
For 5G mobile communications technology development, Europe’s Horizon Korea established 5G mobile service visions and mid to long-term technological
Program and 5G PPP Project are promoting studies by setting out subdivided innovation strategies and founded a ‘5G Forum’ in May 2013 with public
technological strategic goals as shown in <Figure 5-21>. organizations, universities and investing institutitions participating. In addition,
centering on the Ministry of Science, ICT and Future Planning, Korea is promoting 5G
related technological and standardization development projects, such as for Pre-5G
<Figure 5-21> 5GTechnology Research Project Items
communications, 5G revolution technology, device to device (D2D) communications
and next-generation WiFi. In January 2014, the Ministry of Science, ICT and Future
Planning confirmed “Creative 5G Mobile Strategy” in order to innovate ICT and
other industries and create new jobs in the respective fields.
<Figure 5-23> Source: ETRI (2014)
Market Standard
Expanding international cooperation

Discovering five key services for 5G standard
Securing 5G spectrum at the right time
Demonstration and commercialization Qualitatively leading 5G standardization
as the first in the world
Technology Ecosystem
Source: 5G PPP Promoting technology-leading R&D

Strengthening 5G innovation
competencies of small and
Promoting global market-oriented R&D medium companies
Strengthening 5G core components Supporting entry to overseas 5G market
For 5G service technology, 5G New Radio Access Technology (NRAT) will be

introduced after 2016 as shown in <Figure 5-22> following the completion of Rel.14
Source: ETRI (2014)
of the 3GPP standardization group.
The Korean Ministry of Science, ICT and Future Planning selected ‘Future
<Figure 5-22> Relationship between 5G Radio Access Technologyand LTE SNS, Mobile 3D Imaging, Intelligent Services, Super High-speed Service and
UHD/Hologram’ as the five core technologies to pursue R&Ds and is planning to
demonstrate the services at the Pyeongchang 2018 Winter Olympics. Through this
strategy the Korean government aims to fulfill the following visions.
Source: ETRI (2014)
<Figure 5-24> Vision of a 5G Industry allocated to hot spot areas where the amount of traffic is large, and thus traffic
demand is handled effectively. For the Rel-12 standardization goal, 3GPP is discussing
micro cell on/ off and discovery as well as dual terminal connection on macro and
micro cell as a method for efficient mobility management, increased spectrum
utilization efficiency and energy efficiency improvement according to high-density
micro cell placement.
In particular, under dual connectivity, terminals are connected to both macro

and micro cells where macro cell base stations ensure base station coverage and
mobility management and micro cell base stations provide a high data transmission
rate. Network densification is regarded as a key 5G technology to increase network
capacity per unit area, and thus accommodate the rapid traffic increase that will
surely occur in the near future.
Source: ETRI (2014)
b) Massive MIMO
7) Key Wireless Technologies for 5G

Massive MIMO is designed to achieve high energy efficiency and while also
increasing capacity by installing tens or hundreds of antennas in base stations so
There are slight differences in 5G visions and technological goals proposed by
that multiple users can access the same resources concurrently. Although multi-user
korea and international 5G companies, such as Ericsson, Samsung, LG and Huawei,
MIMO technology can considerably increase transmission efficiency by increasing the
and the related organizations. However, the visions are largely divided into five
number of transmission antennas and users, it is subject to transmission problems
categories and detailed goals for each category are as listed below.
and reception filter complexity that increases exponentially, to the technology has,
in reality, been associated with a number of difficulties, but it is subject to increase
① To accommodate logarithmic growth of data traffic: Up to 1,000 times that of 4G
transmission and reception filter complexity with exponentially so it is difficult to
② To drastically increase transmission rate per user: Average transmission rate of
realization.
1Gbps
③ To accommodate the increased number of connected devices: 10 – 1,000 times
On the other hand, massive MIMO removes interference between channels of
of 4G
different users when the number of antennas increases to a high level as long as a
④ Extremely low end-to-endlatency: Up to 1ms
perfect channel vector can be obtained using the correlation between uplink and
⑤ High energy efficiency: 10 – 1,000 times of 4G
downlink channels in TDD system. Therefore, the system design has been simplified
based on the fact that a number of users can be concurrently serviced using simple
The technological goals and requirements of 5G are largely divided into four
transmission and reception filters. Although massive MIMO is a technology based
technological fields, namely capacity increase, low latency, energy efficiency and
on TDD, a majority of common carriers across the world are currently operating
the number of connected devices. Wireless transmission technologies necessary for
FDD spectrum bands instead of TDD. Therefore, it will be difficult to realize massive
realizing 5G visions with a focus placed on capacity increase and low latency are as
MIMO under TDD in the near future. On the other hand, LTE-Advanced transmits
follows:
a data stream to each of up to four users using eight antennas. In LTE fields, the
concept of massive MIMO has been expanded to the three-dimensional space, and
a) Network Densification
thus 3D beam forming technology standardization is expected to take place soon.
Accordingly, studies are being conducted on 3D channel models.
Wireless transmission technology improvements increase the amount of traffic
that can be accommodated by a single cell and, at the same time, reduces the cell
size. Accordingly, this leads to capacity increase through cell division by increasing
the number of cells within a fixed area. In particular, small cells are extensively
c) In-band Full Duplex boundary, it regards interference signals from the terminal at the center of the cell,
which are relatively weaker in intensity, as interference, and thus can decrypt its own
To increase wireless link transmission rate volume according to the Shannon’s signals.
limit, in-band full duplex transmission is being studied in attempt to increase the
amount of wireless resources by sharing the transmitted and received wireless e) Super Wideband
resources.
The LTE and LTE-A technologies available at the moment support bandwidth up
The currently used half-duplex transmission and reception units can distinguish to 20MHz (single bandwidth) without the application of carrier wave aggregation.
transmission and reception signals in either spectrum or time domains using To accommodate 1,000 times the data traffic, 5G goal, a spectrum resource holding
a duplexer or a circulator. However, the full duplex unit, which handles both a far wider bandwidth (hundreds of MHzs~several GHzs) than the current cellular
transmission and reception signals, is subject to the problem whereby the band is required. To achieve this, an efficient transmission and reception supporting
transmission and reception modems do not operate when transmission or reception is technology suitable for broadband wireless channels is necessary.
carried out using a single antenna. To solve this problem, the full duplex unit physically
distinguishes transmission and reception antennas. When a full duplex unit is applied The ultra wideband (UWB) communications studied until the early and mid
to the base station of a mobile communications system, the reception power for the 2000s targeted low-power near-field transmission for a coverage of approximately
echo signal is larger by tens of dBs than the reception power of cell boundary terminals. 10m. From this standpoint, it is different from the UWB transmission technology
Therefore, the reception power of the echo signal must be lowered by using an being discussed as a 5G technology. As element technologies for UWB transmission
appropriate echo control/ cancellation technique before signal processing is carried out support, a broadband initial connection technology suitable for wider band channel
by the baseband modem. To cancel the echo, the transmission and reception antennas characteristics, HARQ transmission and feedback supporting technologies for
are isolated and then analog echo cancellation and digital echo cancellation techniques efficient transmission of large-scale data to each terminal and technologies for
are applied sequentially. The techniques applied include the technology for handling cooperation with existing cellular bands can be considered. The candidate bands for
line crossing used in digital subscriber networks (xDSL) and the echo signal processing UWB transmission include the cellular band, which generally refers to the bands less
technology of the analog repeaters (ICS repeater) used in 3G wireless communications than 6GHz, and also the millimeter wave band with a capacity of 6GHz or higher.
networks (CDMA, WCDMA and WiBro). In case of the millimeter wave band, large-scale fading characteristics, such as the
Doppler effects of wireless channels, are considerably different from those of cellular
d) NOMA (Non-orthogonal Multiple Access) bands. Therefore, a new design for the frame structure, physical channels and signals
may be needed.
NOMA is a candidate technology to achieve cell capacity increase, which is one
of the 5G technological goals. It improves spectrum efficiency by concurrently f) Low Latency & High Reliability
transmitting data to two or more terminals in the same spectrum spatial and
time resource fields. NOMA aims at increasing resource efficiency through dual The LTE and LTE-A technologies available at the moment support bandwidth up
allocation of two or more terminals to the same spectrum resources by breaking the to 20MHz (single bandwidth) without the application of carrier wave aggregation.
orthogonality if spectrum resource allocation is applied to the existing orthogonal To accommodate 1,000 times the data traffic, 5G goal, a spectrum resource holding
multiple access method, such as the OFDMA. a far wider bandwidth (hundreds of MHzs~several GHzs) than the current cellular
band is required. To achieve this, an efficient transmission and reception supporting
For a multiple number of terminals with large discrepancies in channel quality technology suitable for broadband wireless channels is necessary.
(e.g.a terminal located at the center of a cell and a terminal atthe cell boundary),
base stations send the respective symbols through superposition. During this process, The ultra wideband (UWB) communications studied until the early and mid
terminals at the cell center and on the cell boundary can be allocated with low 2000s targeted low-power near-field transmission for a coverage of approximately
and high powers respectively. The terminal at the center of the cell removethe 10m. From this standpoint, it is different from the UWB transmission technology
interference signals of the cell boundary terminal and thus can successfully decrypt being discussed as a 5G technology. As element technologies for UWB transmission
its own signals, which has high signal intensity. As for the terminal at the cell support, a broadband initial connection technology suitable for wider band channel
characteristics, HARQ transmission and feedback supporting technologies for The increase of income, consumer surplus and total factor productivity is a long-
efficient transmission of large-scale data to each terminal and technologies for term effect generated as general users and companies utilize broadband services.
cooperation with existing cellular bands can be considered. The candidate bands for The effects generated through broadband network investment are relatively short-
UWB transmission include the cellular band, which generally refers to the bands less term effects.
than 6GHz, and also the millimeter wave band with a capacity of 6GHz or higher.
In case of the millimeter wave band, large-scale fading characteristics, such as the 2) Direct Benefits
Doppler effects of wireless channels, are considerably different from those of cellular
bands. Therefore, a new design for the frame structure, physical channels and signals Most studies trying to estimate the long-term economic effects of broadband
may be needed. analyze how much of a percentage the GDP growth rate increases for an increment
in the number of broadband circuits by 10 for every 100 people. These are based
on a regression analysis with the economic growth rate increase as a dependent
5. Analysis of Benefits variable and broadband penetration increase as independent variable.The following
table lists the results of relevant studies.
5.1 Economic Effects
<Table 5-28>Studies on Regression Analysis between Broadband Penetration Increase and
1) Types of Economic Effects
GDP Growth Rate Increase I
The economic effects of broadband are largely divided into effects resulting from Target Data
Publishing
Authors Countries Collection Key Results
broadband network establishment, the effects of overall economic productivity Year
and Regions Period
increase as general users and companies start utilizing broadband service and
GDP per capita increases by
the effects of increased consumer surplus as consumers access broadband services High-income
1.21% when ten broadband
Qiang&Rossoto 2009 earning 66 1980-2002
at a price lower than the maximum price for which they have an intention of circuits are added for every 100
countries
payment. Katz (2012) used the following diagram to illustrate the economic effects people.
of broadband and categorized the benefits general users and companies obtain GDP increases by 0.24% per year
OECD 22 when a country with an average
through broadband utilization as direct benefits and those to increase production Kourtroumpis 2009
countries
2002-2007
GDP level introduces broadband
and employment in other fields through the broadband network implementation as network.
indirect benefits. GDP per capita increases by 0.9
OECD – 1.5% when ten broadband
Czernich et al. 2011 1999-2007
members circuits are added for every 100
<Figure 5-25> Flow of Broadband Economic Effects people.
Source: KISDI
Distribution for Consumer
household use surplus
Regression analysis, as such, is persuasive when estimating the effects of

Household
income broadband at the time of the first broadband system introduction. However,
Direct benefits additional assumptions are necessary when estimating the effects of rapid
broadband upgrade (ADSL -> FTTH) or of additional mobile broadband introduction
while the fixed broadband system is already in use. In particular, it is necessary to
Broadband
implementation
Distribution for
corporate use
reflect the differences between fixed and mobile broadband systems. In general, the
Total factor speed of fixed broadband is much faster than that of mobile broadband. However, it
productivity
Investment for Contribution to
can be used only in limited spaces as the system is fixed at home or office.
infrastructure GDP growth
Source: Katz (2012)
In addition, fixed broadband of household is shared by all family members job finding and that, according to this trend, the consumer surplus for broadband
whereas mobile broadband is used for personal purposes. For an appropriate utilization in the U.S. increased from $20 billion in 2005 to $32 billion in 2009. This
estimate, such differences need to be considered. However, studies that explicitly study also reports that the differences between households and races decreased in
reflect the differences between fixed and mobile broadband systems have not yet line with an increase in the Internet speed and generalization of broadband service.
been found. In this report, an estimation of broadband effects was carried out under
the assumption that fixed and mobile broadband services are the same. 3) Indirect Benefits
Some argue that mobile broadband is far more effective for GDP increase The indirect benefits of broadband network establishment are the effects
than fixed broadband in the developing countries where fixed infrastructures are generated from facility investment. These effects are manifested through the
weak (World Bank and InfoDev,2012, p.103). However, no empirical study results following processes. Broadband network implementation and operation generates
to support this argument have been published. Deloitte, GSMA & CISCO (2012) demand for construction work, such as road excavation, pipeline and cable
estimated the additional economic effect generated when mobile communications installation and telecommunication building/ base station construction and for
system evolves from 2G to 3G network by using data from 96 countries from 2008 general support facilities, such as transmission facilities including base station
~2011. According to their estimate, GDP per capita increased by 0.15% when 3G equipment and optical transmission devices necessary in communication, switching
penetration increased by 10% over four years. facilities including routers, monitoring facilities, power facilities and vehicles. In
addition, broadband network establishment increases household and corporate
An empirical study reporting that broadband introduction led to an increase in broadband subscribers, and thus generates sales in the communications market.
corporate productivity, and thus resulted in an increase in total productivity of the At the same time, it generates demand for modems and mobile phone terminals
national economy analyzedcorporate-level data or differences between countries. A that are necessary for new services. Moreover, diverse broadband content and the
recently published study by Mun et al. (2014) investigated the differences between related advertising markets are created. The new investment and new market effects
a case of web-based management system introduction and a case where the system generated as such spread to the national economy through the multiplier effect,
is not introduced targeting all companies in Korea with a scale larger than the set and thus trigger production/ added values and induces employment. The multiplier
level from 2006 to 2008. Through this study, it was found that the labor productivity effect amplifies in terms of its ripple effect on other industries when domestic
increase rate of companies that use the Internet in their management strategies was human resources and domestically produced components are used more frequently.
higher by 1.5% than those not utilizing Internet. In addition, an additional labor On the other hand, the level of dependence on imported items increases, and the
productivity increase of 1.3% was observed in the manufacturing industry compare ripple effect leaks to foreign countries. As a result, productivity,added value and
with the service industry, which indicated that the utilization of the Internet employment do not increase any more.
in business activities brought cost reduction effects through various routes for
manufacturing industry of which the production processes are complicated. As for
sales increase, the rate of sales increase displayed by companies utilizing the Internet 5.2 Social Effects
was higher by 0.8%, indicating that Internet usage contributed not only to cost
reduction, but also demand creation and expansion. A number of other empirical Literature on the social effects of broadband network establishment is discussed
studies report the effect of corporate or national-level broadband utilization on in detail in SQW (2013). The key social benefits of broadband network establishment
productivity increase. include expansion of communication among broadband users, development of
digital type online entertainment, an increase in online shopping, an increase in
There are not many empirical studies to measure consumer surplus according to online learning, remote medical services, exchange of job information and increased
broadband utilization. However, as broadband service has become established as a communication with the government.
daily necessity in recent times, some studies report a gradual increase in consumer
surplus through broadband distribution. For example, Dutz, Orszag&Willig (2009) EC(2009) points out that the increased communication among users through
argued that broadband is an essential means in everyday life because people do blogging and social networking is an example of the fastest growth in the history
not cancel Internet service even when they become unemployed because they want of the communications industry andSelouani and Hamam(2009) suggest examples
to use the Internet to collect information for employment and as a channel for of positive changes communications improvement will bring to the native Canadian
community in the form of ‘social capital.’
Broadband development is sharply increasing the percentage of Internet usage in and that around two thirds of employers that have posted a job opening have
entertainment industries. Ofcom(2012b) reports that a rapid increase in the amount used the Internet in the course of employment. According to the Joseph Rowntree
of content distributed in digital format through such services as YouTube and iTunes Foundation (2012), many employers stopped advertising for job openings on
is leading to fundamental changes in how people access entertainment. In addition, the press and moved to the Internet due to cost-related issues. This can be
studies conducted by the EU (2009) and Anderson (2008) report that the increase in disadvantageous for people who do not have an Internet environment established in
Internet usage has led to an increase in the utilization of e-mail services, and thus their homes or those seeking jobs intermittently.
the rate of TV watching by younger generations and the nationwide newspaper
subscription rate are decreasing. Cabinet Office(2012) reports that the utilization of an e-Government support
service is growing in the U.K. and that a large amount of government transactions
In line with an increase of broadband distribution, Internet shopping is also on are being made online, and thus potential cost reduction is achieved. Boulianne
the rise. According to Civic Consulting (2011), Internet shopping provides users the (2009) collected evidence to support an argument that broadband Internet exerts
ability to search inexpensive products, compare prices conveniently, enjoy a wide contrasting effects on citizens’ participation. According to this study, some scholars
range of choices and obtain accurate information about specific products. As for argue that the Internet provides a platform that encourages people to have a higher
SQW (2008), it estimates that Internet shopping is providing a monetary benefit of level of interest in their local communities or political issues, while others claim that
￡70 (about USD 107)on an average to each household in the U.K. meaningless Internet surfing leads to distractedness and that the opportunities for
entertainment available on the Internet decrease the chance for the people to enjoy
Opinions about the education effect of the Internet vary widely. Casey et their lives as citizens.
al. (2012) conducted a survey targeting nine-year-old children in Ireland and
reached the conclusion that, while Internet surfing for fun, working on projects for Internet utilization has relevance with the well-being of people. According to
learning and e-mail transmission have relevance with an increase in the children’s Penard, Suire and Poussing(2011), people not using the Internet are less satisfied
mathematical exam scores and reading, text messaging, music downloading with their lives than those that use the Internet. Kavetsos and Koutroumpis(2011)
or movie watching on the Internet exerted negative impacts on both reading also argue that owning a computer with Internet access at home is relevant with a
and mathematical exams. In addition, Valentine et al.(2005) reported in a study significantly high level of happiness. In addition, a study conducted by Dutton and
conducted in 2004 targeting 12 schools in England that ICT utilization outside the Blank(2011) suggests evidence that the Internet is helpful in the formation and
school provides a positive impact on students’ performance improvement for specific maintenance of relationships with friends and family members. As for Ford and
subjects together with various benefits including motivational effects for students. Ford (2009), they discovered that Internet usage exerted a considerable impact on
On the other hand, according to this study, ICT utilization outside the school for reducing the outbreak of depression.
recreational purposes resulted in a statistically significant drop in the students’
academic records.
In relation to remote medical and public health services, I2 Media Research

(2010) explains how broadband service can assist the elderly, how new broadband
products and services can contribute to medical service distribution and with which
method a better social participation can be encouraged. According to Kenny and
Kenny (2011), although remote medical service targets the elderly, as the elderly
are a demographical class experiencing the biggest difficulty in Internet access,
continuation of remote medical service incurs unexpected connection and training
expenses. Therefore, this study points out that remote medical service may require
technological support over quite a long period of time.
Institute for Employment Studies and Ipsos MORI(2012) explains that the
Internet has become an important path connecting employers and job-seekers
5.3 Estimation of Economic Effects of Broadband The Internet speed in Ecuador was around 1~ 2Mbps in 2012. The goal is to
Distribution in Ecuador increase it to 2Mbps ~ 20Mbps by 2017.
1) National Broadband Plan in Ecuador <Table 5-31> Broadband Speed in Ecuador
According to MINTEL’s national broadband plan (Plan Nacional de Banda Ancha), 2018 2019 2020
Ecuador has established a broadband investment plan until 2017 as of the following: Fixed broadband penetration 22.91% 25.82% 28.73%
Mobile Broadband Penetration 71.11% 73.94% 76.77%
<Table 5-29> Ecuador’s Broadband Investment Plan Source: MINTEL(2014)
Target Circuit Count Investment

Investor Ecuador’s National Broadband Plan suggests targets from 2018 to 2020. The
(1,000 circuits) Amount (USD)
government aims to achieve 29 fixed broadband circuits for every 100 people and 77
ADSL 1,700 510 million Government
mobile broadband circuits for every 100 people by 2020.
ADSL 2+ 340 20.4 million Government
Cable Modem 750 230 million Government

<Table 5-32> Broadband Penetration in Ecuador
DOCSIS 3.0 230 78.4 million Government
2018 2019 2020
LTE 331 million Government Fixed broadband penetration 22.91% 25.82% 28.73%
Investment in Mobile Mobile Broadband Penetration 71.11% 73.94% 76.77%
939 million Private sector
Carrier
The Ecuadorian government estimates that a 1% increase in broadband
penetration would result in a GDP increase of 0.052%, and thus, through fulfillment
With investment as of the above, the Ecuadorian government anticipates
offixed broadband penetration by 20% and mobile broadband penetration by 63%,
broadband distribution performance as listed below by 2017. When fixed broadband
it forecast an additional GDP increase to a total of $8.835 billion from 2013 to 2017
penetration reaches 20% in 2017, the penetration by household becomes 76%
(MINTEL,2014, p.41).
as the average number of people per household in Ecuador is 3.8. In 2013, the
penetration by household was 26%.
According to the broadband distribution increase as such, the government
<Table 5-30> Broadband Distribution Performance and Plan in Ecuador expets accumulated job creation for around567,000 people from 2013 to 2017
(MINTEL,2014, p.41).
2007 2013 2017
Fixed broadband penetration (1) 1,700 510 million Government During a meeting with the KSP team on September 17, 2014, the Ecuadorian
Mobile Broadband Penetration (2) 340 20.4 million Government government explained that the economicbenefits as estimated above had been
Broadband Penetration (1+2) 750 230 million Government
obtained through consultation with Professor Raul Katz at Columbia University(New
York). The government offered to show details of the consultation available for
Percentage of Households with Internet
230 78.4 million Government disclosure but inthe end was notableto so. So instead an ITU study conducted by Raul
Connection
Katz (2012), which is considered to have been the basis for the consultation, was
No. of Households with Internet
331 million Government obtained and analyzed. As a result, it was found that information about broadband
Connection (1,000 households)
penetration was used until 2006 and the increased rate of GDP growth was used
Percentage of Households with 5Mbps -
939 million Private sector until 2008. Therefore, the rate of smartphone distribution, which began in line
20Mbps speed Internet Connection
with iPhone distribution in 2007, was not taken into consideration. As much as so,
the effects of the national broadband distribution plan, which centers on mobile The KSP team’s estimations are slightly different from those of MINTEL (2014).
broadband, are considered to have been underestimated. In addition, it was found While MINTEL’s estimation of job creation is 567,000 people, KSP’s estimation is
that the inter-industry relations table used in the analysis was from 2007, and thus 434,000. Such a difference was generated because some of the following factors
was not updated. exerted a combined. First, Ecuador’s industrial structure could have changed from
2007 to 2010. Second, it is possible for the scopes of broadband investment to be
For this report, it was decided to update the economic benefit estimation using different. Of industries in the small category of the inter-industry relations table,
Katz’s technique based on the data available for presentcircumstances. Fixed and the KSP team regarded communications, broadcasting and information (038002)
mobile broadband penetration and GDP growth rates from 2007 to 2013 were and construction and building (034001) industries as those for direct investment
additionally obtained and the rate of higher education enrollment, percentage of in the broadband implementation. Although an investment can be made in
private investment in GDP, globalization index and population increase rates wereall electrical facilities, in the case of Ecuador, there is almost no production from the
updated to 2013. At the same time, an inter-industry relations table of 2010 was manufacturing industry, and thus it was regarded that all communication devices,
obtained, and thus the industrial relevance analysis was updated. terminals and electrical facilities were imported. Therefore, it is proper to consider
that broadband implementation has no ripple effects on other industries in Ecuador.
2) Estimation of Indirect Effects: Input- Output Analysis As for machinery, equipment and instrument industry (029001), these were excluded
from industries relevant to broadband system establishment.
As a result of analyzing Ecuador’s inter-industry relations table for 2010, the
investment multiplier for the ICT industry was found to be 1.53. This means that 3) Limitations in Job Creation Effect Identification
when $100 is invested, a production of $53 is generated. The economic effects of
fixed and mobile broadband investment from 2013 to 2017 are as outlined in the Broadband network installation can affect the employment market in three ways.
following table. In summary, the production induction effect, added value induction First, network construction creates direct employment for electrical communication
effect and employment induction effect were found to be $2.76 billion, $2.11 billion and construction workers as well as people in manufacturing industries to produce
and 434,000 people (accumulated) respectively. electrical and communication equipment. These human resources are essential for
the construction of broadband-related facilities. Second, the direct employment
effects bring about indirect effects. Differently Putting it differently, the direct
<Table 5-33> Economic Effects of Broadband Investment (Industrial Relevance Analysis) employment effects will connect manufacturing industries and, in the course of
Government Investment this process, markets to trade the related equipment will be formed. Job creation
effects generated through this process are called indirect employment effects. Lastly,
Mobile Private
Item Fixed Broadband Total employment induction effect refers the increase in the income of workers from
Broadband Investment
direct and indirect employment effects, which results in an expansion of household
Cable DOCIS
ADSL ADSL+ LTE expenditures, which in turn, creates more jobs.
Modem 3.0
Total Investment 510 20 230 78 331 939 1,800
Ecuador’s industrial classification table for 2010 is comprised of a total of 71
Production
middle category industries and 47 large category industries. For this broadband
Induction Effect 783 31 353 120 508 1,441 2,763
($1M) project in Ecuador, input and output analysis was carried out by separately
categorizing construction and building, which is middle category 1 of large category
Added Value
34, and the communications, broadcasting and information industry, which is middle
Induction Effect 597 24 269 92 387 1,098 2,106
($1M) category 2 of large category 38 as an ICT industry. The job creation effect generated
by broadband-related construction and building is direct job creation and the job
Employment
Induction Effect 122.88 4.92 55.42 18.89 79.76 226.25 433.70 creation effect generated from electronic and electrical facility manufacturing in the
(1,000 persons) process of the broadband network implementation is indirect job creation. However,
Ecuador’s inter-industry relations table does not have a subcategory for electronic
and electrical facility manufacturing. Therefore, a focus was placed on total job
creation rather than to divide it into direct and indirect effects. As a result, difficulties of economic openness and a technology-related variable, such as broadband,
were experienced in identifying the employment effects in detail. are added to the model, the degree of limitations exerted on the model can be
resolved to some degree. The second problem is the endogeneity between GDP
4)
Estimation of Direct Effects: Effects of Broadband Introduction to Latin per capita and broadband penetration. Koutroumpis(2009) regarded the decision
American and Caribbean Countries to build a broadband network as functions of GDP per capital, rate, competition
and regulation functions, and thus utilized a simultaneous equation model to
To test the hypothesis that broadband introduction to Latin American and Caribbean endogenize the functions within the model. However, as a result of the lack
countries leads to economic growth, this study used a multivariate regression model for of time-series data on broadband rates and economies in Latin American and
GDP growth, broadband implementation as suggested by Katz (2012) and broadband Caribbean countries, utilization of this method is realistically impossible. Therefore, a
penetration. Instead, these data were updated to the latest available. recommended method is to collect and analyze broadband penetration variables by
time series (Katz, 2012, p30).
a) Limitations of Econometric Analysis and Alternatives
b) Processing Data used in Analysis and Missing Values
So far, many analyses have estimated the effect of broadband distribution
on GDP and employment growth. However, most of those studies target the The total number of Latin American and Caribbean countries included in theITU
advanced countries. This is because, for the developing countries or new nations, DB is 49. However, for broadband penetration used as an explanatory/independent
sufficient data for analysis could not be secured or the data collection itself is not variable in the establishment of a multivariate regression model, the time when data
possible. Katz (2012) reported an estimation of the economic effects of broadband collection began was around 20 years ago and data does not exist for a considerably
distribution through multivariate regression analysis on data from Latin American large number of countries. Even if data of all countries are used in building the
countries for the period of 2004 to 2009. In this report, the regression model of Katz model, it is highly likely that there will be errors that will distort the actual values to
was updated using the latest data. occur when calibrating missing values using minimum, maximum or average values.
As such an analysis is conducted without a large number of samples, this report used
However, as aforementioned, time-series data on broadband penetrations in even the small-scale data in model establishment as long as the data were measured
Latin American and Caribbean countries are insufficient, and thus not enough data accurately rather than using inaccurate data. For this reason, it is appropriate to conduct
have been collected for development of a time-series model. For this reason, a cross- a multivariate regression analysis targeting 41 countries listed in the World Bank DB.
sectional analysis was conducted using pooled data from 2007 to 2013. This analysis However, even the World Bankincludes countries of small economic scales of which
uses the ordinary least square (OLS) technique that allows for robust error. The term GDP used as a dependent variable is not collected. Therefore, these countries were
‘robust’ is used for the results of an analysis technique when the technique is useful excluded from the analysis, and thus the regression analysis was carried out on a total of
even if it violates the most fundamental statistical assumptions of data accuracy. 32countries2). The table below lists thevariables used in the actual analysis.
As data collection for Latin American and Caribbean countries is relatively more
difficult than for other countries, the results of multivariate regressionanalysis can be
described as ‘robust.’
As the collection of data on broadband penetrations in Latin American and

Caribbean countries is limited, two problems occur when conducting any sort
ofanalysis. These are explained in detail by Katz (2012).
The first problem is that the constant term of linear regression model cannot 2)　 Countries excluded from the analysis: Anguilla, Bonaire, Cayman Islands, Curaçao,
distinguish the potential differences between the countries. One of solutions for Falkland Islands, French Gyiana, Guadeloupe, Haiti, Martinique, Montserrat, Saint-
Barthelemy, Saint Lucia, Saint Martin, Sint Maarten, Turks and Caiscos Islands, Virgin Islands
this is to utilize panel data. Panel data ensures control over unique characteristics
of specific countries. However, as a result of the limitations in securingdata, this Analysis stargetcountries: Antigua, Argentina, Aruba, Bahamas, Barbados, Belize, Bolivia, Brazil,
Chile, Colombia, Costa Rica, Cuba, Dominica, Dominica, Republic, Ecuador, El Salvador, Grenada,
approach cannot be utilized. Nevertheless, when a variable indicating a degree Guatemala, Guyana, Honduras, Jameica, Mexico, Nicaragua, Panama, Paraguay, Peru, Puerto Rico,
St. Vincent, Suriname, Trinidad & Tobago, Uruguay, Venezuela
<Table 5-34> Variables Used for Measuring Broadband Effects on Economic Growth <Table 5-35> Effects of Broadband on Economic Growth
(Latin American and Caribbean Countries) (Latin American and Caribbean Countries)
Variable Theoretical Regression Standard 95% Confidence

Variable Type Data Set Source GDP Growth T-Statistic Pr(T>t)
Name Ground Coefficient Error Interval
Economic Dependent
GDPGrth Real GDP growth in 2012 World Bank Broadband Distribution
Growth variable 0.0200 0.011 1.914 0.0672 -0.002 0.042
Growth
Fixed broadband distribution Total Fixed Capital 0.1402 0.073 1.915 0.0670 -0.0011 0.291
Broadband and growth rate in 2007 – 2008
Independent Population Increase 0.8437 0.306 2.755 0.0108 0.0213 1.474
Distribution BP (broadband penetration estimated ITU
variable
Growth as number of broadband users per Educational Level 0.0629 0.026 2.419 0.0232 0.009 0.012
100 populations)
Economic Growth -0.0002 0.00008 -2.711 0.0120 -0.0004 -0.00005
Control variable for
Control on Average fixed capital formation in National Openness 0.1404 0.063 2.238 0.0344 0.011 0.270
Invest World Bank investment differences
Investment 2007 ~– 2009
by country Constant Term -11.280 4.520 -2.496 0.0195 -20.592 -1.972
Control variable for

Population Population increase in 2010 ~
PopCAGR World Bank population differences Observations 32
Increase 2012
by country
F(6, 25) 6.09
Control variable Pr(>F) 0.0004914
Educational
Edu College enrollment rate in 2005 World Bank for differences in
Level R^2 0.5938
human resources
Root MSE 2.204
Control variable
Economic Source: KSDI
GDPC Nominal GDP per capita in 2009 World Bank for the time of
Growth
growth
Control variable c) Estimation and Analysis

ETH
for differences in
National Global index average in 2007 ~ (www.
GlobalInd economic, social The estimation coefficient for fixed broadband penetration was 0.020, a positive
Openness 2009 globalization.
and political
kof.ethz.ch) number, which was concluded to be statistically significant at the 10% significance
openness
level. In other words, a 1% increase in broadband penetration in Latin American and
Source: KSDI Caribbean countries leads to an additional GDP growth of approximately 0.02% in
the respective country. As a result of analyzing variables for broadband penetration
growth with a time interval while controlling other variables, the time period which
exerted the most statistically significant impact on the GDP growth rate for years
2011~2012 was found to 2007~2008. This serves as grounds for concluding that
broadband usage exerts animpact on GDP growth over a time interval of three years.
For this study, a new independent variable was created by adding fixed
broadband penetration, which is an independent variable, to mobile broadband
penetration. Recently, the technological advance of mobile devices andrapid growth
of infrastructures to access such devices as much as possible have played a major
role in the explosive increase of mobile broadband users. Therefore, in this study, an
analysis was carried out using the new independent variable in order to identify how
much the mobile broadband penetration growth rate influenced GDP. However,
although a statistically significant regression coefficient was obtained, the coefficient
was a negative value (-0.013). This indicates a rather contradictory conclusion
that an increase in the mobile broadband penetration leads to a decrease in GDP
growth. There are mainly two possible reasons for such a contradictory conclusion. Ⅵ
First is that the data available for utilization, which was continuously mentioned
above, has not been sufficiently secured. The ITU’s data on the number of mobile
broadband users per every 100 people by country have a considerable amount of
Conclusion and Suggestions for National
missing values. Therefore, it is difficult to measure the actual effects using the data.
In particular, there are many missing values in the mobile broadband penetration of
Mobile Broadband in Ecuador
Latin American and Caribbean countries for years 2007 to 2009, which affects GDP
growth for the period of 2010 to 2012, and this is considered to have distorted the
estimations significantly.
Second is that, unlike fixed broadband penetration, the time interval at which
mobile broadband penetration affects GDP can be longer or shorter than three
years. Accordingly, it might be inappropriate to add together the fixed and mobile
penetrations of the same year. Together with the aforementioned reflection of
differences between fixed and mobile networks (location fixed, multiple usage),
this requires an additional empirical study. Most importantly, it is necessary to The content of the KSP- IDB Joint Consulting, Action Plan for Effective Spectrum
collect data on Latin American and Caribbean countries far more extensively and Allocation for Mobile Broadband in Ecuador is largely divided into three: (1)
systematically than now. Once data collection is completed successfully, more technological consulting to derive a mobile broadband implementation method
accurate results can be produced with more appropriate analysis techniques. for Ecuador and an analysis of Ecuador’s related laws by examining Korea’s success
with LTE deployment, (2)establishing of long-term mobile broadband deployment
Despite various limitations, the results of this study are summarized as strategies for Ecuador, and (3) sharing of technology through presentations and
follows. When fixed and mobile broadband penetration increases from seminars to spread the strategies throughout Ecuador. During this process, KSP
29.6%(=6.8%+22.8%) in 2013 to 83%(=20%+63%) in 2017 (penetration increased by Junior Consultants were sent to Ecuador to closely investigate conditions in Ecuador
53.4%, GDP additionally increases by 1.068% (=0.02%×53.4) over the four years. This and foster relationshop among the stakeholders. Moreover, the broadband plan set
is equivalent to 1.068% of GDP in 2013, which is $6.140 billion (=KRW 57.49 billion up by the Ecuadorian government was analyzed during the Field Study conducted in
×1.068 %. This is categorized as adirect benefit with the consumer surplus excluded. September 2014 and Ecuador’s government-level requirements for fulfillment of the
In addition, the induced added value of $2.106 billion calculated using the inter- plan were analyzed through meetings with Ecuador’s MINTEL, SENATEL and major
industry relations table is categorized as anindirect benefit. Therefore, the direct and carriers. At the same time, areas requiring improvement were identified through
indirect effects of broadband investment are summarized as additional GDP increase an investigation of each mobile carrier to implement the plan (CNT, CONECEL and
by $8.246 billion and job creation for 433,700 people. OTECEL). Short and long-term plans to reflect improvements to the government’s
policy are established and the related benefits are analyzed.
<Table 5-36> Economic Ripple Effects of Broadband Investment A. Suggestions based on Technological Consulting
Job Creation As the results of technological consulting for this project, the followings are
Estimated by GDP Increase ($1M)
(1,000 persons)
suggested:
MINTEL (2014) 8,835 567.0
KSP 8,246 433.7 First, by defining LTE technology as a core technology for mobile broadband
deployment, a swift installation of a nationwide LTE network with the latest VoLTE C. Effective Competition Policy and Industry Promotion
based technology standard is suggested in order to encourage Ecuador’s third-
ranking company CNT to establish a nationwide network swiftly and economically. The mobile broadband valid competition policy applicable to Ecuador is
This plan is subject to partial modifications according to terminal development and de-symmetrization of interconnection fees through radio wave fee differentiation
supply policy to suit the characteristics of Ecuador, which currently has a prepaid type and interconnection method improvement. It was suggested to use this technique
mobile communications service subscription system. in order to facilitate establishment of a competitive system in the long term with
consideration given to late comers in the market.
Second, as the mobile broadband spectrum requirement calculation method
requested additionally by the Ecuadorian government during the Field Study of the As a mobile broadband industry promotion policy, the establishment of a
KSP team, the M.1390 method of the ITU studied by the Korea Communications national think tank is considered important. This will bring about a virtuous cycle of
Commission was spread and, through a realistic simulation, the appropriate performances for radio broadcasting R&D fields as well as for academic circles and
spectrum requirement for Ecuador was calculated (515MHz in total required by the industry as a whole. Accordingly, R&D results will build up,which will lead to
2020). As for estimating the traffic per subscriber applied to the calculation (not ICT industry outcomes. Ultimately, this will provide an opportunity for national ICT
derived during the Field Study), Korea’s LTE subscriber count was substituted for that industry advancement.
of Ecuador. Therefore, some additions or deductions may apply.
D. Benefit nalysis of Mobile Broadband Plan
Third, considering the characteristics of population distribution in Ecuador, the
number of eNode-Bsfor eachparroquia (an administrative district equivalent to a As a result of re-estimating the economic ripple effects listed in Ecuador’s
Korean ‘eup) was designed to increase to cover around 67.8% of the population by national broadband plan using updated data for the period of 20072013 and the
2020, and thus a rough estimate for neededinvestment costs was enabled. inter-industry relations table of 2010, it was found that the GDP would additionally
increase by $8.236 billion and accumulated job creation would be possible for
B. Mid–Long term Strategy and Roadmap for Mobile Broadband Spectrum 433,700 people.
Supply
Although regression analysis was conducted using the total of mobile and fixed
In Ecuador, a rapid traffic increase is not yet being observed. Therefore, broadband penetrations since 2007 in addition to fixed broadband penetration,
the short-term focus should be placed on building a nationwide network by it did not produce meaningful results as there were too many missing values.
resolving theduopoly of the market rather than through LTE-advance expansion. Therefore, the estimates produced through this study can be considered the
In other words, a preferential goal for Ecuador is toexpand the nationwide mobile best results achievable with the given data and information. Nevertheless, once
communications network through a policy promoting broadband Internet diffusion thedata necessary for analyzing fixed and mobile broadband penetrations and
by (1) placing a greater emphasis on mandatory coverage and compliance rather rates in Latin American and Caribbean countries are systematically compiled, a more
than maximization of frequency auction profits, (2) providing frequencies having accurate estimate will be achieved. Based on the accurate benefit analysis result,
satisfactory radio wave characteristics, (3) mandating sharing of facilities, and (4) investment decisions will be made through selection and concentration, and thus the
creating a competitive structure through roaming based on fair competition and economic and social benefits of broadband network establishment in Ecuador will
(5) making mandatorythe designation of the top two-ranking companies as MVNOs be maximized.
necessary when granting broadband licenses to foster market creation rather than
promoting broadband LTE until the goal is fulfilled. In the mid-to-long-term, it is It is anticipated that the result produced by the KSP team will be reflected in
necessary to establish spectrum collection and reallocation plans through traffic other F/S projects promoted by the IDB in the future. As for the promotion of this
forecast, spectrum requirement analysis and a survey on the pattern of spectrum project, the biggest difficulty was incommunicating with Ecuadorian officials due to
usage based on a link with the results of international conferences, such as the language barriers. To overcome this, junior consultants capable of communicating
WRC, and also to establish a plan for securing spectrums with consideration given in Spanish and DaeyoungUbitec’spersonnelcompetent in Spanish were sent to
to reallocation of the expired spectrums and discovery of new spectrum bands. Ecuador to collect the necessary data and establish a communication system for
Accordingly, a road map for the plans must also be established. successful project deployment. During the implementation of this project, Ecuador’s
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948•2014 Joint Consulting with IOs : Inter-American Development Bank [IDB]

05 Ecuador

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05 Ecuador

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Establishment of 2014

2014 Joint Consulting with IOs:

1. Creating Rural Innovative Strategy for Sustainable Rural

Action Plan for Effective Spectrum

1. Vision 2030 and Indicator Analysis

Abbreviation Full Description

List of Abbreviations GPRS General Packet Radio Service

Abbreviation Full Description Abbreviation Full Description

Ecuador’s national broadband plan established in 2014 aims at providing

VI. Conclusion and Suggestions for National Mobile

1. Project Background and Objectives

1.1 Project Background

As a reason of Ecuador’s geographical features such as the Andes Mountains,

embarked on a project to support mobile broadband improvement in Ecuador as

1.3 Purpose of the Final Report

1.4 Project Goal

Source: 2014 Worldwide Country Handbook, KEXIM bank (Dec. 2013)

3.2.4 Dissemination Seminar in Ecuador

<Table 2-1> Ecuador’s Key Economic Indicators

Domestic GDP per Capita $ 4,753 5,325 5,743 6,154 6,417

Source: 2014 Worldwide Country Handbook, KEXIM bank (2014)

1.2 Communications Service Subscribers

<Table 2-2> Broadcasting and Communications Industry by Item

Fixed Communications 2,325,105 lines (Jan. 2013) 15.1%(2011)

Broadband 869,036 lines (2012) 5.8% 2.1 Fixed Service Status

CNT is a government-owned company established through a merger between

Claro 104,910 12.1% WiMAX 0 0 0 0 0 0 0

Total 2.582.436 3.211.922 3.806.432 4.314.599 4.513.874 5.019.686 5.148.308

Source: SUPERTEL, as of 2012 3G(WCDMA, HSPA, etc) 0 0 0 0 0 218 148.416

3 Mobile Communications CNT EP 4G(LTE : FDD & TDD) 0 0 0 0 0 0 0

Total 449.63 323.967 356.9 333.73 303.368 309.271 362.56

As of August 2014, there were 17.97 million mobile communications

Total 6.907.911 8.156.359 9.291.268 10.470.502 11.057.316 11.757.906 12.030.886

CONECEL $ 1.114.295.390,28 $ 1.217.482.903,00 $ 1.379.753.045,00 $ 1.441.873.810,00 $ 1.590.961.642,00

3.3 Plans and Status of LTE Promotion for Mobile

Phase 1 2014 • To lower data price per Kbps

③ Details of the National Broadband Plan and Applications

The goal is to provide mobile-based broadband service to 63% of the population

<Figure 2-3> Ecuador’s National Broadband Plan

② National Broadband Plan Overview

<Figure 2-4> Plans for Broadband Supply by 2020

<Figure 2-5> Optical Network Implementation Plan

<Figure 2-7> 3.5G Service Status

The Cantons in which optical communications networks are currently established

Source: Press report, BeyondStrategy reconstructed

③ Regulations of Mobile Communications and Internet Service

Information& Knowledge Financial&

The key concern of ‘TEL-477-16-CONATEL-2012’ is the obligation of service

<Contents of Radio Regulations>

CHAPTER I OBJECTIVES, TERMS AND DEFINITIONS

Source: Ecuadorian government’s response to questionnaire (Sep. 2014)

<Table 3-2> Mobile Communications Subscriber Count in Ecuador

1.2.1 Global Mobile Data Traffic Growth

Source: ITU (Jul. 2013)

Source: KIEES (2011)

Phase 1 Phase 2 Phase 3 Phase 4

Requirement (MHz) 390 515-669 780-927 1061-1353 1193-1522

Source: KICS (2013) Source: KICS (2013)

1.3.1 Current Status of Mobile Spectrum Usage

1.9GHz PCS 1850-1910/1930-1990MHz U.S. 2G spectrum in America

Source: GSA (2014)

Also, although only 1 FA (2x5MHz) is being used as a nationwide 3G frequency

CONECEL OTECEL CNT*

1) Sufficient and affordable amount of Spectrum in IMT candidate bands: 700

•ITU-R M.1768 : Methodology for calculating spectrum requirements for the

•ITU-R M.1390 : Methodology for the calculatingIMT-2000 terrestrial spectrum

5) Wireless spectrum requirement was calculated as in <Table 5-17> by applying

Source : Internal data of KSP team (2014) • Obligation of