There has been a lot of talk about "high-frequency spectrum" and "low-frequency spectrum" over the past week, as Sprint announced it was not going to bid in the upcoming PCS H-Block auction (high frequency). I am sure Sprint has several reasons for this decision, whether because it already has twice as much spectrum as any other carrier in the United States or it doesn't want to get into another tussle with Dish Network, which already committed to bid $1.56 billion for the nationwide license, substantially more than what Sprint indicated it was prepared to pay.
All three companies--Dish, Sprint and T-Mobile--hold very large amounts of high-band spectrum and have been using it to support lots of network and service innovations as a way to compete against AT&T and Verizon. So, why is there such a resurgence of commotion about the virtues of "low-band spectrum?"
The pundits are right in that lower frequency spectrum travels further in flat territory compared to high-frequency radio waves, using the same amount of power. These lower frequency cells therefore cover more territory with their spectrum than their higher-band brethren. For example, a cell tower operating in the 850 MHz band can provide up to one third more coverage area than a 1900 MHz band cell, but they handle the same amount of capacity. Regardless of coverage area, both the low band and high band cell sites provide the exact same amount of data bandwidth.
Thus, the issue for areas where people are making lots of calls and using their mobile devices to get on the Internet to watch movies or send data packets, is how much bandwidth the spectrum supports, not how large the coverage area is.
In densely populated areas where capacity is king, Dr. Saw, former CTO of Clearwire (now Sprint), explains that a 2.5 GHz network like Clearwire's looks and operates almost the same as a 700 MHz network. There is no material upside or downside to using low or high band frequencies in such situations.
In a densely populated U.S. city, like New York City, the same amount of cell sites are used regardless of whether high or low frequency spectrum is being used. In a city, you are not solving for far-reaching coverage but for capacity. For example, in Manhattan, cell sites are often as little as 300 feet apart due to capacity constraints, regardless of the frequency band used.
Lower frequency spectrum is better at providing big, cheap coverage across flat areas with few people, and these areas are not experiencing a spectrum crunch like the urban cities are. The closer the network gets to highly populated, high voice and data demand areas, the less important it becomes to provide big coverage areas and instead, the priority shifts to maximizing capacity.
The curious developments around the H-block seem to reflect nothing more than companies interested in perfecting their spectrum portfolios with the sort of spectrum they want. Even more curious are the arguments being made in Washington claiming access to low-band spectrum as necessary to compete in today's marketplace. Today, companies are pursuing the spectrum they need to optimize their capacity and fit in with their evolving business models, balance sheets, network deployment timing and just maybe, to avoid a bidding war with Charlie Ergen.
Roger Entner is the Founder and Analyst at Recon Analytics. He received an Honorary Doctor of Science from Heriot-Watt University. Recon Analytics specializes in fact-based research and the analysis of disparate data sources to provide unprecedented insights into the world of telecommunications. Follow Roger on Twitter @rogerentner.