The future of professional mobile communication in the Netherlands

In 2005, the Minister of Economic Affairs made available 2x 3 MHz paired frequency space in the 450-470 MHz spectrum for PAMR (Public Access Mobile Radio) services (the spectrum between 451.76-454.77 MHz and 461.76-464.76 MHz). A PAMR service is a mobile, electronic communication service designed for professional users in closed groups. Examples of applications include voice communication between employees on a company site, communication between taxis and a taxi dispatch centre, or remote reading and control of equipment. With the current frequency license expiring in 2020, the Ministry will need to make a decision regarding the future of the PAMR band. Dialogic has been tasked with conducting market research.

What is the market demand for professional mobile communication services in the PAMR band?

The market shows a stable demand for critical voice communication and mission-critical data communication, with a slight increase in demand for business-critical data communication. Customers have to choose between in-house networks (make) or purchasing communication services (buy). We observe that customers of critical data or voice communication, despite a common preference for service purchase, often opt for an in-house network for the following reasons: (1) Control over the network, especially concerning coverage and capacity planning, (2) Control over technology, especially its lifecycle, (3) Dependencies on other systems and the power grid, and (4) (Perceived) safety and separation from public infrastructure. A PAMR service can fulfil national demands for voice and data and, compared to services over generic mobile networks, better meet the above aspects. In geographically defined scenarios like communication on a company site, a PAMR service competes with private PMR networks and direct communication, with the relative added value of a PAMR service on the aforementioned aspects being limited. The Dutch market for professional mobile voice communication based on PAMR is quite saturated. A business case for offering PAMR data services in the Netherlands is expected to be feasible between 2017 and 2025 only if the provider can achieve a certain volume (in the order of hundreds of thousands to a million or more, primarily dependent on the willingness of customers to pay). The market for (mission and business) critical mobile data communication is currently small. The number of customers requesting national (non-defined) critical data services is also relatively low. The main factors and uncertainties influencing the demand for, and viability of, services in the PAMR band in the period 2017-2025 are as follows:

• The suitability of services based on generic mobile networks for professional users, which a PAMR service will compete with. Determining factors include (1) the extent to which operators of generic mobile networks will meet specific customer needs, such as deploying functionalities for professional users, and (2) the extent to which mobile network operators invest in network reliability and availability (such as independence from the power grid) and subsequently offer stricter Service Level Agreements (SLAs).
• The Internet of Things (IoT) indirectly leads to increased demand for critical data communication within the investigated period. Operators currently providing IoT connectivity are expected to gradually respond to this, raising uncertainty about a specific role for services from the PAMR band. Additionally, the extent to which the need for IoT connectivity grows and shifts from non-critical to business-critical is a determining factor.
• The rollout of a new service brings a risk concerning technology choice. LTE deployment is most likely, but equipment availability is still limited. Determining factors include (1) whether standardisation of the entire PAMR band within LTE will take place (expected within two to three years), and (2) whether a lively ecosystem for LTE equipment that can operate in the band will emerge.