WiMax USA: Spectrum Crunch Ahead

There is one big obstacle standing in the way of operators looking to roll out wireless broadband services in the U.S. using WiMax. There's a distinct lack of licensed spectrum available for such offerings.

Here's the problem: If you expect to use unlicensed spectrum for your WiMax service, there's really no way to guarantee the quality of service or connectivity. And it's already becoming clear that a few of the major carriers have locked down large chunks of the prime licensed bandwidth.

Operators wishing to launch WiMax services over the next couple of years face a choice: They either need to own or acquire spectrum in the licensed 2.5-2.6GHz bands. Or, they will have to use the more crowded 5.8GHz "public" band, which will be more prone to congestion and interference as the WiMax network footprint expands.

It should be a simple choice. Licensed spectrum is always going to make for a better quality of service than unlicensed bandwidth. But the 2.5-2.6GHz licensed bandwidth that is available is mostly concentrated in the hands of a few major operators, and a dark horse or two.

These are the factors that could make it difficult for many ISPs to offer comprehensive WiMax services nationwide without adding at least some unlicensed spectrum to the mix. And as we have seen with the growth of public WiFi networks, unlicensed spectrum often means less reliable connectivity that is prey to congestion.

For those who own it, licensed spectrum will be the way to go. It is already obvious that there some clear winners in the licensed field.

Leader of the pack is the newly merged cellular operator Sprint Nextel Corp. (NYSE: S). Between them Sprint and Nextel have 90 MHz of 2.5GHz spectrum, covering 80 markets in the U.S. Sprint is plotting fixed WiMax tests now and tests on into 2006. (See Sprint's Got WiMax Plans.)

"It is pretty clear that Sprint pretty much 'owns' this part of the spectrum in the U.S. right now," says Jack Gold of JGold Associates Inc. With Sprint already trialing fixed WiMax in this spectrum, they will likely have a six- to 12-month headstart over the competition."

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— Dan Jones, Site Editor, Unstrung