Lower frequency spectrum is better for coverage, while higher frequency spectrum is better for capacity, and mobile service providers need both. That will be as true in the 5G era as it has been in the 3G and 4G eras.
And most of the demand for capacity happens at home and at work. “Remember, the majority of all the traffic is in dense urban areas, where we are now initially are focusing” its millimeter wave deployments, said Verizon CEO Hans Vestberg.
Observers have noted for years that Verizon “needs more spectrum.” Verizon’s answer has been to use millimeter wave spectrum, small cells and spectrum sharing, in addition to acquiring new millimeter wave assets and refarming 3G spectrum. There is an unsaid ability to possibly augment with other assets as well, but Verizon is moving ahead on the assumption it must do so without spectrum asset acquisitions from other service providers.
“One of the most important features that I have talked about is of course the dynamic spectrum sharing that will come during next year, where you basically also can use, deploy wherever you are with 5G and then you don’t need to allocate certain spectrum to certain technology,” said Hans Vestberg, Verizon CEO.
Some have noted that Verizon has less capacity per account than does AT&T, and “needs” more mid-band spectrum. Verizon technologists have run the numbers and concluded that small cell architectures–always a practical way to expand bandwidth–will do much of the job. Millimeter wave spectrum and spectrum sharing will help: the former with capacity needs, the latter for coverage.
But none of that is essential. Every 5G service provider eventually has to supply both coverage and capacity. Capacity has to come in different ways than coverage. Verizon knows that.
An important point is that there are a growing number of ways to increase effective bandwidth beyond buying spectrum licenses. Small cells, dense fiber networks, spectrum sharing and spectrum aggregation all can expand capacity.
That said, both AT&T and Verizon have committed to lots of new spectrum in the millimeter wave regions. Some have criticized such moves, arguing that volume production of radios and devices eventually be strong in the mid-band spectrum areas. There is some merit to such arguments.
But it also is true that future 5G capacity growth will have to come from the millimeter wave region, and that this will be a global trend, not something mostly limited to the United States.
Verizon realizes millimeter wave spectrum “is not the coverage spectrum,” Vestberg said. That is one reason why “spectrum sharing will be the next step for us to see that we have all the assets to deploy our strategy on 5G to meet the different type of use cases.”