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Network World - The top U.S. carriers over the past year have stepped up their efforts to grab more spectrum for 4G wireless data services needed to accommodate a seemingly insatiable and exploding population of iPhone, iPad and other mobile device users.
To get a sense of just how much additional bandwidth carriers will need, consider that Ericsson's most recent Traffic and Market Data report predicted that global mobile data traffic will grow by 10 times between now and 2016. What's more, the FCC has projected the nation's wireless carriers will face a 275MHz "spectrum deficit" by 2014 if no new spectrum is opened up for use. Carriers are going to need that spectrum not only to build out nationwide LTE mobile data networks but also to support critical applications such as Voice over LTE (VoLTE) and eventually move to LTE-Advanced, the next generation of LTE that's projected to deliver average download speeds in the 100Mbps range.
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AT&T's failed $39 billion acquisition of T-Mobile was all about gaining more spectrum for its 4G LTE network, as were Verizon's nearly $4 billion in recent deals to purchase spectrum licenses from big cable companies including Cox, Time Warner and Comcast.
Mark Lowenstein, the managing director for consulting and advisory firm Mobile Ecosystem, says that getting significantly
more spectrum would allow carriers to promote LTE not just as wireless technology for smartphones and tablets but for high-definition
video services as well. Or put another way, while it would be impractical to stream Netflix movies on your Xbox using LTE
right now, it might not be that impractical in the future when carriers have significantly more spectrum to play with and
can thus charge less money for high data consumption.
“As a result of trying to manage the spectrum they have, wireless carriers have kept their 4G pricing relatively conservative,” he says. “Significantly more spectrum will allow them to be more aggressive with regards to video.”
But while the carriers are scrambling trying to get more spectrum for their LTE networks, it's useful to step back and examine just what spectrum they already have and what they'll need in the future to deliver ubiquitous 4G service across the United States as mobile users seek to view and exchange more video and other bandwidth-hogging content.
In general, LTE networks run on frequencies in the 700MHz to 2.5GHz range, though spectrum on lower frequencies is preferable for carriers since it can maintain signal strength over longer distances, meaning carriers can cover more people while building less infrastructure. With this in mind, you can see why Verizon and AT&T were so aggressive in bidding for spectrum on the 700MHz band that had previously been used for broadcasting UHF stations before the FCC opened it up for auction in 2008. In total, Verizon bid $4.7 billion for the rights to operate on the so-called "C Block" of the 700MHz band while AT&T spent $6.64 billion to operating on the so-called "B Block" of the same band.