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Can Mobile Operators Afford to Keep Up With the Demand for Bandwidth?

October 27, 2010

Even in the face of a global economic meltdown, wireless technology has been an unqualified success. Energy-efficient microprocessors power mobile devices that let people share words, sounds, and images–and tap into a world of entertainment–almost anywhere. But the success of these smart phones, e-readers, and tablets challenges the telecommunications companies that must provide connectivity for a device long after the store receipt for it has been lost.

These businesses are now spending billions of dollars upgrading infrastructure to handle the traffic, buying new radio spectrum licenses, and deploying next-generation broadband technologies, such as WiMax and LTE (see “Feeding the Bandwidth Beast” ), that make better use of the portions of the spectrum the companies already own.

Wireless operators hope this will satisfy the appetite of data-hungry subscribers. However, experience suggests that unless constraints are imposed, that appetite will simply expand to consume the new bandwidth, leaving operators right back where they started (see “Making Wireless like Wired”). In the United States, this problem has already forced AT&T, which is the national carrier for the iPhone, to stop offering unlimited data plans to new subscribers. Some think the only way to guarantee that data hogs won’t crowd out, say, someone simply trying to make a phone call will be to introduce pricing based on the type of traffic, so that those wanting to stream high-quality video would pay a premium. Such a practice might not be allowed, however, if government regulations enshrine the principle of network neutrality in wireless systems (see “Should the Airwaves Be Neutral?), and it’s likely that the shape of mobile networks in this decade will owe as much to deals done in national legislatures as to any technical innovation.

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