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Network World - Ahead of a major new spectrum auction scheduled for next year, America's four major wireless carriers are jockeying for position in the frequencies available to them, buying, selling and trading licenses to important parts of the nation's airwaves.
Surging demand for mobile bandwidth, fueled by an increasingly saturated smartphone market and data-hungry apps, has showed no signs of slowing down – Cisco’s latest VNI Global Mobile Traffic Forecast shows that bandwidth demand will grow by a factor of 11 over the next four years alone.
This, understandably, has the wireless industry scrambling to improve its infrastructure in a number of areas, including the amounts of raw spectrum available to the carriers. Analysts told the Wall Street Journal last month that they expect nearly $50 billion to be spent by Verizon, AT&T, Sprint and T-Mobile (as well as by relative newcomer Dish Network) over the next 24 months on licenses.
Moreover, the past few months have seen several high-profile license transfers, as the carriers fine-tune their strategies. T-Mobile announced in January that it would buy the A Block of the 700MHz spectrum from Verizon in a number of major markets for a total of $3.3 billion. The addition was seen as an effort to build out T-Mobile’s 4G coverage in a hurry, since signals in the relatively low frequency 700MHz band propagate well and allow large areas to be covered by a single transmitter.
Almost a third of that sum, however, was paid to Verizon in the form of higher-frequency licenses in the Advanced Wireless Services (AWS) and Personal Communications Service (PCS) bands, which Big Red is using to add capacity to its existing LTE network.
"Since Verizon Wireless is using its 700MHz upper C Block spectrum for our 4G LTE network build-out and adding capacity with AWS spectrum, we wanted to rationalize our spectrum holdings by selling the lower 700MHz A and B Block licenses," said Verizon spokesperson Robin Nicol.
AT&T, as well, announced the addition of AWS licenses this month, presumably with a similar aim.
George Schmitt, a wireless industry veteran and current chairman of xG Technology, says that T-Mobile was wise to snap up available licenses in the band, noting that AT&T and Verizon are in a commanding spectral position in large part because of their 700MHz licenses.
“Any time T-Mobile can buy frequencies, they’re going to do it, and they know, just like everybody else, that the frequency at 700MHz is a hell of a lot better to have for your network outside the city of New York than any other number you can get your hands on today,” he says, adding that New York presents some unique challenges to wireless network designers.
Only lateral moves
These shifts, however, are essentially just lateral moves – nothing to directly solve the problems posed by a crowded spectrum. What’s really going to save the wireless world, some experts think, is a more comprehensive re-imagining of the way spectrum is used.