Make much more productive use of current spectrum: Should you envision wireless spectrum as being a highway, that street is acquiring jammed with trucks carrying huge plenty of YouTube and Netflix (NFLX).New network systems may get people trucks to generate much closer with each other, freeing up potential. Verizon (VZ, Lot of money 500), AT&T (T, Fortune five hundred) and Sprint (S, Lot of money five hundred) are deploying a "4G" technology called Long Term Evolution, which adds about six to eight times much more ability than a traditional 2G network.The problem is that the vast majority of cellular customers don't have 4G-capable devices. Even Apple's (AAPL, Lot of money 500) iPhone isn't there yet.LTE has nowhere near the same level of national coverage as less-efficient 2G and 3G services. Even if carriers offered incentives to get customers to buy 4G phones, they would still need their 2G and 3G networks to keep users connected in non-4G areas.
Down the road, some analysts predict that even 4G's extra ability won't be enough."You can try to be more successful, but we're really nearing the end of that," says Ken Rehbehn, an analyst with Yankee Group. "It's reaching the point of diminishing returns as we push up against the boundaries of physics."Get people off the mobile network: Another solution is to simply get customers to stop using so considerably spectrum.It's easier to cram a lot a lot more data into wires than into airwaves -- that's why your home broadband is generally considerably faster than your smartphone. Offloading mobile traffic to Wi-Fi connections is an effective way to lighten the load.Carriers are using carrots and sticks to shift traffic. The sticks: tiered pricing models and speed limits for the biggest bandwidth hogs. The carrots: free Wi-Fi in crowded areas. AT&T has hotspots in packed places like New York City's Times Square and programs many of its phones to connect to them automatically.
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The tactic is working. About 22% of traffic from mobile devices will travel over non-carrier networks in 2016, according to estimates from Cisco (CSCO, Fortune five hundred). That's double today's rate.Add spectrum: "The lever of last resort is to go out and acquire a lot more spectrum," says PwC's Hays. "That's a costly proposition, as well as one with a limited supply."There's vacant spectrum out there in the wild. The problem is that some of it is held by companies and government agencies that can't or won't make good use of it, and a whole lot of it is unsuitable for wireless broadband.That's why the industry cheered last week when the Federal Communications Commission gained congressional approval to auction off a large chunk of some of the highest-quality spectrum around. The FCC is expected to raise $15 billion by holding incentive auctions for TV broadcasters, which could voluntarily choose to give up their spectrum and either go dark or share a channel with another local broadcaster.The auctions won't happen until 2014 at the very earliest. Bidding will be fierce: The FCC's last major auction, in 2008, raised almost $20 billion and drew bids from all of the industry's power players.
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