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Summary:

Carrier aggregation is the latest weapon carriers are trying in order to add capacity to their mobile broadband networks and AT&T is the latest operator to consider using the technology to consolidate its multiple spectrum bands into one network. What does that mean for spectrum valuation?

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Carrier aggregation is the latest weapon carriers are trying in order to add capacity to their mobile broadband networks, and AT&T is the latest operator to consider using the technology to consolidate its multiple spectrum bands into one network, according to Fierce Wireless. But as operators implement this practice in the next generation of the Long Term Evolution standard it changes the way spectrum is valued and sold.

Carrier aggregation refers to using different spectrum bands together to create a contiguous swath of the airwaves over which to deliver mobile broadband. Without the technology, carriers need to deploy their broadband technology in larger chunks of spectrum, and the size of those chunks has a direct influence on the quality of the service. For example, Metro PCS is deploying LTE in 5-MHz swatches of spectrum because that’s all it has. Meanwhile Verizon is using 10-MHz channels, and so delivers a faster and better service. But it also paid a lot more for those wider airwaves.

But with carrier aggregation, operators can mix and match their spectrum and make them all look continuous. So a 2-MHz channel would be added to an 8-MHz channel to create what appears to be a 10-MHz channel. It’s like when you bake a tall cake: It’s much easier to make a series of smaller cakes and layer them on top of each other than to bake a foot-tall tower. Carrier aggregation is like that, only the layers can be a variety of different sizes. And since carriers no longer have to look for the highly-sought-after-but-rare, foot-tall cake, they can pay less for smaller layers.

New technologies from network equipment vendors as well as a need for faster speeds for HSPA and LTE networks are making the investment and work on this technology pay off. Plus, as the demand for mobile broadband skyrockets, finding ways to  use spectrum more efficiently is becoming paramount. However, as this technology becomes more prevalent (T-Mobile is already using it as are operators in Japan and Australia), it could change the value of spectrum, making the value of contiguous swaths a bit lower and the value of those smaller chunks that are no longer useless, higher.

For more on the details of AT&T’s plan, which could help it beat Verizon’s existing LTE speeds of 5 Mbps to 12 Mbps, check out the Fierce Wireless article.

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  1. This is a great time to be an att subscriber.

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