Cellphone Industry Nearing Its Limits

The U.S. mobile phone industry is running out of the airwaves necessary to provide voice, text and Internet services to its customers.

The problem, known as the “spectrum crunch,” threatens to increase the number of dropped calls, slow down data speeds and raise customers’ prices. It will also whittle down the nation’s number of wireless carriers and create a deeper financial divide between those companies that have capacity and those that don’t.

Wireless spectrum — the invisible infrastructure over which all wireless transmissions travel — is a finite resource. When, exactly, we’ll hit the wall is the subject of intense debate, but almost everyone in the industry agrees that a crunch is coming. The U.S. still has a slight spectrum surplus. But at the current growth rate, the surplus turns into a deficit as early as next year, according to the Federal Communications Commission’s estimates.

The number-one biggest driver is consumers’ insatiable thirst for e-mail, apps and particularly video on their mobile devices — anywhere, anytime. Global mobile data traffic is just about doubling every year, and will continue to do so through at least 2016, according to Cisco’s Mobile Visual Networking Index, the industry’s most comprehensive annual study.

The FCC has also been working to free up more spectrum for wireless operators. Congress reached a tentative deal last week, approving voluntary auctions that would let TV broadcasters’ spectrum licenses be repurposed for wireless broadband use. But freeing up more spectrum won’t be enough to solve the problem.

The good news is that there are ways to buy time. The bad news is that none of the fixes are quick, and all are expensive. For the situation to improve, carriers — and, therefore, their customers — will have to pay more.

Source: CNN

Image: Mobile Media