What’s the Value of an Airway?

February 27, 2015

Author: Tom SunTower

Hong Kong is one of the most expensive cities in the world to live in. Over there, one million dollars can buy you a 200 square foot home. In a recent AWS-3 spectrum auction in the US, AT&T spent $18.2 billion for a nationwide 20 MHz airway. The same one million dollars can rent you 1KHz of licensed spectrum for a few years. Why are operators spending so much money to secure the rights to send some electromagnetic pulses through the air?

Let’s start with the definition of an airway:  it is a channel of a designated radio frequency used for broadcasting or radio communication. In mobile applications, it provides the linkage between our mobile devices and the radio access network. Simply put, if you don’t have an airway, you can’t have mobile service.

The concept of sending and receiving electromagnetic waves over the air was discovered only 140 years ago. The Scottish scientist James Clerk Maxwell first predicted that electromagnetic disturbances should propagate through a vacuum at the speed of light in a wave-like characteristic. This hypothesis was later confirmed by Heinrich Hertz in his brilliant wireless experiments that demonstrated the first transmission and reception of radio waves.

An electromagnetic wave can oscillate in frequencies ranging from 8.3 kHz to 3,000 GHz. As an analogy, if you equate the 40 MHz band used for Wi-Fi to one kilometer in distance, it would take up to 75,000 kilometers to cover the entire radio spectrum—a distance that is one and half times around the earth. With such an abundant resource, it seems absurd for someone to spend $18 billion just to rent 20 MHz of airway. Clearly, not all frequencies have equal value.

The atmosphere and other physical barriers like terrain, trees and buildings limit the propagation of radio waves. In general for terrestrial transmission, a lower frequency radio wave travels farther than a higher frequency radio wave given the same effective radiated power. This is why AM radio signals, which operate in lower frequency band, traverse farther and are easier to pick up than FM radio signals in remote areas.  For this reason, lower frequency bands below 4 GHz are more desirable for mobile communication.

The use of radio frequency is regulated by various international and national standard bodies. In the United States, this spectrum management process is the responsibility of Federal Communications Commission (FCC). Acting as the “airway” traffic controller, the FCC assigns frequencies to military, broadcasting bodies and for mobile communication. As the demand increases with dwindling supply, the price for new frequency bands naturally goes up.

The introduction of a new band creates both opportunity and uncertainty for the mobile market. Mobile equipment suppliers see this as an opportunity to sell more RAN equipment, but at the same time grimace at the need to add yet another radio variant to a portfolio already overflowing with more than 100 product variants.

One of the values of PMC’s UniTRX™ chipset is its ability to support bands from 400 MHz to 4 GHz—essentially all  of the bands licensed for mobile communication. This flexibility allows mobile equipment suppliers to reuse a common RF design across multiple frequency bands. By helping our customers to drastically reduce their product development time, they are better positioned to capture the opportunity created by the introduction of a new band.

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