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Mar. 8, 2007

Overall, 3G spectrum costs a lot more than WiMAX bandwidth, according to analysts over at Pyramid Research.

With the impending build-out of more and more WiMAX networks, this could drastically change the wireless landscape.

One important part of the price differential is that 3G licenses are typically nationwide, while WiMAX licenses are usually awarded only to a specific region.

In today's market, network operators don’t buy spectrum in just one region. They acquire their needed spectrum to cover multiple markets in many regions.

To this day, WiMAX licenses have been sold on a regional basis and covering only single regions at any given time.

Pyramid Research noted that Vodafone paid $9.4 billion for its national spectrum seven years ago. The highest bid at a WiMAX spectrum auction fetched just $3.2 million to cover Greater London.

Such a high price for 3G spectrum isn't surprising, given that mobile operators are banking on wireless data usage as a significant part of their future revenues.

To date, and with only smaller players making bids for WiMAX spectrum, prices have been lower.

With Sprint and other large network operators interested in obtaining more spectrum for future networks, the overall price is expected to largely increase very soon.

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Source: Wireless Week