Most Believe There is a Business Case for Millimeter Wave Networks

There might still be some observers who think millimeter wave networks will “not work,” in the sense of a business case that allows 5G and other wireless access providers to make money.

Few matters are as contentious as the business model for millimeter wave communication, either in a mobile or fixed wireless deployment. The biggest concerns probably concern signal propagation, and the impact on business models.

Some think sheer reach will be an issue, while others might argue that the cost of infrastructure, relative to revenue, will prove sub-optimal. Others, privately, simply think propagation or deployment issues will prove insurmountable.

The Mobile Experts model for 5G deployment estimates the cost of a 5G network and the potential revenue from new 5G services such as fixed wireless might be quite challenging. “There is simply not enough high-density demand for that,” Mobile Experts says.

To be sure, density is a key issue, as high desnity of users is needed to make a business case for small cells. But that might be a feature, not a bug.

So far, most observers and most mobile operators appear to believe small cell networks using millimeter waves will work, and will have a business case.

AT&T is acquiring Straight Path Communications, a holder of spectrum licenses in the 28 GHz and 39 GHz region. The deal means AT&T will acquire 735 licenses in the 39 GHz band and 133 licenses in the 28 GHz band. These licenses cover the entire United States, including all of the top 40 markets, to support the coming 5G network.

That move is but the latest in a series of developments indicating that millimeter wave spectrum and small cells will be foundational for coming 5G networks. Previously, AT&T had acquired 24 GHz and 39 GHz bands covering 8.4 billion MHz POPs as part of AT&T’s acquisition of FiberNet.

Dish Network, for its part, acquired from sister company EchoStar spectrum licenses covering four markets in the 28 GHz band. THat move adds more spectrum to the trove Dish Network has amassed, either to build its own mobile or wireless network, or as an asset to be sold.

Verizon, for its part, as part of its acquisition of XO Communications, gained
102 licenses in the 28 GHz and 39 GHz bands, covering 188 billion MHz­-POPs, or 23 times the FiberTower assets.

Separately, Charter Communications has applied to the Federal Communications Commission to test 28 GHz frequencies.
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