With the conclusion of Verizon's investor call, I thought it would be worthwhile putting together some facts behind Verizon's statement that they have accumlulated 40MHz or more AWS spectrum in 92 of the Top 100 markets. Unfortunately, they don't define the markets, but from AllNet's Spectrum Ownership Analysis Tool, we have compiled Verizon's AWS spectrum holdings based upon CMA markets. The markets below 40 MHz include: San Juan, Charlotte, Raleigh, Greensboro, Oklahoma City, McAllen, Springfield, and the New Jersey 2 market. This matches Verizon's statement of 40MHz of AWS spectrum in 92 of the Top 100 markets.
As I was completing my research for an upcoming blog on LTE Carrier Aggregation, I found that my previous LTE Band Class reference sheet was missing some of the more recent Band Class updates, so I decided to share my new reference document with a few comments.FDD Band Classes:
The first notable band class addition in Band 30. This band class creates a definition for FDD operation in the WCS (2.3GHz) band which was previously defined only for TDD operation.
From the Spectrum Grid view of the Spectrum Ownership and Analysis Tool, you can see that Band 30 does not include the 5MHz channels that AT&T purchased to essentially become guard bands for the Satellite Audio guys. This will provide AT&T with a 10x10 LTE channel on a market by market basis, as they resolve the remaining ownership issues in the WCS band.
The next two band classes are not new, but I previously skipped over these band classes because I didn't fully understand their frequency breaks.Band 26
Previously I thought this was a specific band for Sprint IDEN operation that is adjacent to the cellular band. This is the band where Sprint is placing their 2nd LTE channel (5 MHz) and a CDMA channel (1.23 MHz). Looking at the frequencies in detail, the band class covers the IDEN spectrum and the adjacent cellular spectrum.
This is similar to Sprint's Band 25 which includes all of the PCS band plus their G block spectrum (but not the H block).
So you would think that all of the North American carriers could standardize to Band 25 for PCS operation and Band 26 for Cellular. Using the latest iPhone 5s LTE band support,
you can see the Verizon, T-Mobile, and AT&T iPhone's support Band 2 and 25 for PCS, but only the cellular band (Band 5). Sprint iPhone 5s includes,
both Band 2 and 25 for PCS and Band 5 and 26 for cellular.
This is referenced as the AWS extended band and you can note from above that it is not currently applied to smartphones like the iPhone 5s. This band class seems to be a preparation for the future use of the AWS-2 and AWS-3 spectrum and the government shared use band that are both adjacent to the existing AWS spectrum band. Here is how the downlink looks in the Spectrum Ownership Analysis Tool:
Note that Band 10 does not cover the entire band contemplated for AWS-3, nor does it include Dish's Band 23. For the uplink:
This again depicts that Band 10 is not currently set to include the entire shared government opportunity.
TDD Band Classes:
Here is the reference sheet the TDD band classes.
On this reference sheet I hadn't looked closely at band classes 35, 36, and 37. I had always focused on the 2.3GHz and 2.5GHz as the only bands that were designated for TDD support in North America. These three band classes create 140MHz block of spectrum that could be for TDD deployment. Here is how these bands appear in the Spectrum Ownership Analysis Tool:
I'm not sure what the history is on these band classes, but they would support TDD operation in both the PCS uplink and downlink bands as well as in the 20 MHz between the bands. Since the PCS frequencies are highly deployed, I would consider it very unlikely to see TDD systems in this band in the near future, and I doubt that the PCS band is authorized for TDD operation. It will be interesting to see whether any of the wireless carriers begin to look this direction. With Sprint stepping out of the H block auction, they seem to be signalling that TDD operation is more important to them and the Band 37 block (including Sprint's G block) could be the reason why Dish is pushing forward in the H block auction. Please comment if you are aware why the 3GPP has included these 3 TDD band classes.
It is interesting to look at the details of Verizon's spectrum purchase from US Cellular in the St Louis market area (EA-96). Many industry sources talk about how purchase will provide 20MHz for Verizon's LTE. While this is true, it should not be confused with Verizon deploying a 20 x 20 channel. As can be seen from the Spectrum Grid view of AllNet Labs' Spectrum Ownership Analysis Tool, Verizon is purchasing the AWS B channel and previously owned the F channel. Although Verizon will own 20 MHz of spectrum, it is not contiguous and until they can deploy Release 12 software code into their network, they will have to operate this spectrum as two separate 10 MHz channels. Release 12 is likely a 2015 or maybe 2016 release since operators are either planning or deploying Release 10 currently.
The industry talks alot about Carrier Aggregation (CA) but there are several facts that are not well understood. First, Release 10 includes the functionality for carrier aggregation but the frequency band definitions for the US are not included until Release 11. Another point that needs to be understood is that the initial definitions require that aggregated carriers be in contiguous blocks in different spectrum bands (inter-band) or in separate blocks but in the same band (intra-band). For Release 11, only 2 carriers can be aggregated together. For Release 12, Verizon has sponsored a work group that will allow 3 carriers to be aggregated, 1 from the 700MHz band and 2 different carriers from the AWS band. Thus, Release 12 will be necessary for Verizon to aggregate their two AWS blocks of spectrum with their 700 MHz LTE.
The Spectrum Grid view is sorted by the EA geographical area which show that the AWS B and C licenses have not be dis-aggregated. The A channel licenses do show discontinuity since they were originally auctioned as CMA licenses. AT&T through their Leap purchase will strengthen their AWS ownership in this market.
To look at the competitive picture for spectrum in the St Louis market (EA-96) we can look at the
Company By Band worksheet from the AllNet Labs' Spectrum Ownership Analysis Tool. Looking first at Verizon, we can see the variety of spectrum depths across the EA that Verizon indicated in their FCC filing. Verizon will range from 62 MHz to 117 MHz depending on the county. The only county that Verizon controls 117 MHz is Montgomery County, MO which is 40 miles west of St. Louis.
Looking at the other carriers in this market we see that US Cellular will still control between 32 MHz and 69 MHz, while AT&T with their Leap purchase will control between 61 MHz and 105 MHz.
T-Mobile controls between 40 MHz and 60 MHz with two counties at 70 MHz and Sprint with their Clearwire purchase controls between 130 MHz and 242 MHz.
T-Mobile announced an acquisition this morning of USCellular's AWS spectrum in several markets. This was clearly foreshadowed when I analyzed the Sprint - USCellular PCS spectrum deal earlier this year.
On this chart from the Spectrum Ownership Analysis Tool, you can see the PCS spectrum in Chicago and St. Louis that Sprint acquired along with the subscribers and network. Thus it was clear to see that USCellular's AWS(B) and AWS(E) spectrum was no longer needed.
It clearly makes sense for T-Mobile to acquire this spectrum as indicated in the chart below. In St Louis, T-Mobile will increase their LTE Channel size from 10MHz to 25MHz and in Kansas City, T-Mobile will increase from 10MHz to 15MHz. The chart also highlights the important spectrum position that Leap hold in the AWS band which both T-Mobile and Verizon would desire to add to their portfolio.
Below is a link to an Investor's Presentation provided by AllNet Labs detailing the licensing, geographic, and leased versus owned challenges of Clearwire's Spectrum.Audio and Slide Presentation
- History of the EBS/BRS Spectrum
- Owned versus Leased Spectrum
- LTE Band Configuration
- Recent Auctions
- Substantial Service
- Issues before the FCC
- Spectrum Sale Challenges
Clearly the wireless industry has locked in spectrum pricing with the MHz-POP pricing model, but is this the right way to look at it as we move into a 4G World where data throughput and capacity are key? For those that aren't familiar, the typical value of spectrum is determined by the $/MHzPOP which is the dollars spent for the spectrum divided by the total amount of spectrum times population that spectrum covers. This model falls short now as carriers are interested in acquiring larger contiguous blocks of spectrum enabling higher users speeds and more capacity.
To use a real estate analogue, a large plot of land is much for flexible for multiple uses, than two plots, even if they are in the same neighborhood. In real estate, the developer that is able to consolidate several tracks of land into a larger development is rewarded as he sells the larger development.
In the wireless industry, we continue to price based upon the $/MHz POP basis, even as carriers such as T-Mobile and Clearwire have combined adjacent channels to create larger bands of spectrum to utilize in larger LTE channels. T-Mobile has worked this year with Verizon, SpectrumCo, and MetroPCS which will allow it to assimilate a 2X20MHz LTE channel on a national basis. Clearwire has leased and purchased operators in the BRS and EBS spectrum bands providing it with an average of 160MHz of spectrum in the top markets. Since Clearwire's spectrum has many geographical boundaries, it is difficult to say how many 20MHz channels they could support across each of their markets, but they have been successful consolidating small bands of spectrum into larger more flexible spectrum bands.
How does a larger band of spectrum affect the wireless carriers? In the US, carriers have deployed FDD-LTE in 1.25MHz channels, 5MHz channels, and 10MHz channels. As you increase the channel size throughput performance improves because a lower percentage of the data packets are dedicated to overhead activities Qualcomm has provided achievable LTE Peak Data Rates for different channel bandwidths based upon whether the antennas are 2x2 or 4x4 MIMO.Link to Qualcomm Document
As you can see in the 4x4 MIMO downlink case, the throughput is 12Mbps greater in the 20MHz channel than the composite of 4-5MHz channels.
So if a 20MHz channel is 4% more efficient than 4 - 5MHz channels should the MHz POPs pricing adjust accordingly?
By the way.. I am going to look for more source data on the capacity improvements for wider channels, a 4% improvement would seem to be relatively negligible. I recall hearing 30% improvements in capacity when a channel size is doubled, but I haven't been able to re-source that data for this blog. More to come.