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Sep. 2, 2008

Between now and 2013, it is widely expected that the three largest wireless operators in the U.S. will deploy their respective next-gen broadband wireless technologies.

Overall, Sprint Nextel will deploy its Mobile Wi-MAX technology at a speed of about 2.5 GHz. For its part, AT&T Mobility and Verizon Wireless will both deploy their LTE technology at speeds hovering close to 700 MHz.

Verizon and AT&T's technology could possibly yield speeds as high 1700 MHz, although Verizon hasn't officially indicated that LTE will be deployed in the higher frequency band.

Sprint Nextel has made it clear that they have a speed advantage with over 100 MHz of untapped spectrum available at their disposal.

Conversely, barely a day went by during the run-up to Auction 73 without some media outlet writing about the glorious prospects for networks deployed at 700 MHz and how radio waves operating in the band would seemingly travel to infinity and beyond...

Of course, we all know that both arguments are one-sided and should be taken with a grain of salt, although directionally correct in a way. In order to better appreciate the issues at hand it is important to take a closer look at the arguments and the relative competitive strengths.

Neither wireless operator have ruled out the use of other technologies at 700 MHz. As is usually almost always the case when companies try to highlight their competitive strengths, the three operators have widely advertized why their respective strategy is going to fly.

However, what they don't talk about are the various limitations in these respective technologies.

No matter how you look at it, Sprint Nextel's spectrum portfolio is rather large. Sprint Nextel probably has at most two EV-DO carriers deployed in any given market, or 5 MHz of spectrum, excluding guard band, dedicated for mobile broadband data services.

So Sprint is essentially betting that it will find a need/demand for at least a 20 times increase in dedicated spectrum for broadband data usage until 2013.

Once you factor in the propagation loss associated with 2.5 GHz versus 1900 MHz, or where EV-DO is deployed today, the implied increase in demand is substantially higher.

Sprint Nextel has publicly stated that if another wireless operator were to offer a similar amount of capacity at 700 MHz that the operator would require 600 percent more mobile towers due to the limited amount of spectrum available in that frequency.

But first, until broadband wireless data usage reaches the higher threshold, many of the advantages associated with having lots of spectrum cannot be realized.

Based on various analyzis and on some modeling done in the recent past, average data usage on the Mobile WiMAX network could easily exceed several gigabytes per subscriber per month with a very strong subscriber penetration rate.

If that were to happen, there would still be plenty of unused spectrum assuming that the network was designed to provide full mobility and deep in-building penetration.

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Source: P.F.Y.