Spectrum Crunch?

Tim Farrar pointed out that bandwidth demands aren’t increasing on a per-device basis (though as more people get smartphones, overall traffic continues to increase). To me it seems obvious this is a result of data caps, and given the performance I’ve had with my iPhone 5 so far it seems like the spectrum crunch is easing (I’ll reserve final judgment until after Christmas and the holidays to see how the LTE networks hold up). The telecoms are pushing hard on things like LTE-Adv, hetnets, microcells, and 40MHz LTE, but what good is all that coverage and 25Mb/s data speed all if you still have a 2GB or 3GB monthly cap for $30/mo? Or 10GB of data to share between 4 people for $120/mo?

Given that both AT&T and Verizon in most areas are only using a 10+10MHz LTE network (20MHz total, or about 20% of their total spectrum capacity), and speeds are still fairly fast for me while out on the go (10Mb/s down, 10Mb/s up on AT&T for me), I don’t see what the big deal is over spectrum anymore. Yeah, we’ll need a little more spectrum, I’d venture to say about another 50MHz per major carrier before 2020, but as long as the prices for data transfer caps stay where they are, people are going to adjust their habits to keep their monthly bills in check. And as the unlimited data plans fade away (due to devices failing and upgrades requiring capped plans), those users are going to have to check their data usage (no more spending all day watching or listening to movies on Netflix over the cellular network).

With the plans currently in place, all four major carriers probably have enough spectrum for the next 4 years. By 2016 the picture will look quite different — AT&T has 20MHz of LTE now, and will have another 20 with WCS, and then whatever it can refarm on PCS (10MHz per market), so an average of 50MHz of LTE per market. Verizon will have 40-60MHz of LTE in metro areas – 20 in 700MHz and 20-40 in AWS. Sprint will likely end up with 20MHz nationwide (PCS G+H blocks) plus what it holds in the SMR spectrum (17MHz avg nationwide), plus Clearwire’s TD-LTE. T-Mo will have 40MHz LTE in the AWS band in most major areas, plus I expect them to pick up more spectrum in the future AWS-3 (extended AWS-1) and the 600MHz incentive auctions. Beyond the big four, we’ll also see Dish Network try to get in the game with their 40MHz of spectrum, building a pure LTE-Adv network, plus whatever they may pick up in auctions.

So why not divert some of the spectrum away from cellular carriers, and towards metro-area wireless broadband? I’d love to see the 70MHz in the 1.3GHz spectrum identified in the recent PCAST report not used for cellular but rather for metro WiFi. Lower frequency, better propagation, set stuff up on light poles and let people hook up to it, use an updated protocol that can handle 100+ devices, etc. Some of the spectrum identified might be better suited for backhauls to sites as well (3.6GHz), rather than tower to handset.

There is still a lot of work ahead for the transition to LTE, a process that will take a long time (3G networks wont be shut off until the early 2020s). And there are spectrum needs for the next few years to manage that and other future transitions. But with the growth in mobile traffic trailing off due to carriers successfully altering consumer behavior, the worries about a future wireless apocalypse doesn’t seem realistic anymore.

3 thoughts on “Spectrum Crunch?

  1. Jim Murrell

    Your point is well researched and logical, however, when geographic footprint parity is reached by the major national carriers on LTE one of them will start the “speed war”. Fat dumb pipes will be the next big battle and those with large spectrum inventory will win. It will kick off another big push for more spectrum especially below 1GHz.

    LTE Advanced will provide higher capacity for large data transfers through carrier aggregation (even in non-adjacent bands). This will allow pieces of spectrum to be essentially mixed and matched and will take theoretical speeds to as high as 1 Gbps. But operators will need 100 MHz of clean spectrum to do it rather than the 20 they are struggling to find now.

  2. Gil

    Side question… Has the Spectrum map information been updated to reflect the AT&T and Verizon to T-Mobile frequency transfers? Possibly the pending MetroPCS AWS? I agree LTE Advanced carrier aggregation will resolve the bulk of the spectrum issues caused by non adjacent bands. I believe the big four are all migrating to LTE Advanced in 2013.

    1. Anthony Post author

      The spectrum transfers should include all the ones that were approved prior to Oct 1. I believe the Verizon/T-Mo swap is still pending.

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