Industry Voices—Mun: LTE use in unlicensed bands is the mobile industry’s fracking moment

Fracking technology has caused natural gas prices to drop.

According to the Brookings Institution, fracking technology has caused natural gas prices to drop 47% compared to what the price would have been prior to the fracking revolution in 2013. While the overall net impact of fracking in consideration of environmental impact is probably too early to call, the immediate economic gain is clear. The lower cost of extracting natural gas through fracking has yielded immediate benefits for consumers and industry alike. Just as the energy industry was able to revitalize abandoned underground shale fields with the new fracking technology, the mobile industry is going through a similar transformation with unlicensed and shared spectrum technologies such as LAA, LWA and MulteFire.

Utilizing “free” or presumably less costly shared spectrum bands is one of the ways for operators to lower the unit cost of delivering mobile data. Finding lower unit economics of data transmission is ever more paramount in today’s “unlimited data” competition. As mobile operators upgrade to LTE-Advanced Pro networks leveraging three-plus Carrier Aggregation, 4x4 MIMO and high-order modulation schemes, they will be eager to deploy lower-cost resources including spectrum, backhaul and site locations. The LTE-based technologies for use in the unlicensed and shared spectrum bands are akin to fracking to harness spectrum previously thought to be unsuitable for LTE services.

As highlighted in our most recent LTE-U and Carrier Wi-Fi report, Mobile Experts expects mobile operators, especially those with limited licensed spectrum holdings, to actively leverage LTE-U/LAA multiband small cells, in lieu of traditional Carrier Wi-Fi equipment, to increase network capacity in high-demand locations and tout “Gigabit LTE” services as higher Category UE devices such as Samsung Galaxy S8 proliferate in the marketplace through natural smartphone replacement cycles.

Fracking technology uses existing oil fields, achieving higher gas production by expanding the reach of underground caverns that each well can draw from. LTE-U technology does the same thing: using existing cellular towers and small cell sites and expand data services by aggregating more spectrum. And hey, LTE-U doesn’t cause earthquakes.

Kyung Mun is a Senior Analyst at Mobile Experts LLC. Mobile Experts is a network of market and technology experts that provides market analysis on the mobile infrastructure and mobile handset markets. Over the course of his 20+ years in wireless and cable industries in a dynamic range of roles from engineering to product management and technology strategy, Mun has contributed to the advancement of mobile communication while working at leading companies in the mobile value chain including Motorola, Texas Instruments, Alcatel-Lucent and a few startups in between. He holds undergraduate and graduate degrees in electrical engineering from the University of Texas at Austin and Georgia Tech, and studied finance and strategy at Southern Methodist University.