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Investment + Commitment + Spectrum = Benefits for Wireless Consumers

In our initial comments for the FCC’s 16th Annual Mobile Competition Report, we shared data from our semi-annual survey that proves the U.S. wireless industry is competitive which means great benefits for consumers. In our reply comments, we provided third party research that shows the U.S. leads the world in wireless even though we have such a small amount of spectrum in the pipeline compared to other countries.

U.S. wireless providers continue to work hard to support Americans’ hunger for mobile broadband. Last year, 30,299 cell sites were added. As the number of new cell sites indicates, our members are absolutely focused on infrastructure deployments and improving efficiency to meet consumer demand, but more sites and cell splitting isn’t enough.

As this “flag chart” shows, when compared to similar countries, the U.S. has among the least amount of potentially usable spectrum in the pipeline, but we have more subscribers and minutes of use. 4G and advanced technologies efficiently manage spectrum needs and can support a greater number of users per megahertz, but additional spectrum is desperately needed to support the continued growth in mobile broadband.

Despite having less spectrum, but more users, the U.S. wireless industry has been able to innovate and create thanks to the ecosystem’s fierce competition.

Don’t believe me? Take a look at some third party research that was recently released.

Bank of America Merrill Lynch’s recent Global Wireless Matrix Report found that as of year-end 2011, U.S. consumers used the most voice minutes (945) and paid the lowest average revenue per minute ($0.03) among the Organisation for Economic Co-operation and Development (OECD) countries.

The U.S. wireless marketplace also continues to be one of the most competitive and least concentrated in the world. Out of 28 OECD countries, only three (the U.S., Japan and Canada) have five or more wireless carriers. Of the remaining countries, 15 have only three wireless carriers and 10 have only four.

We hope that FCC can see that the data proves the wireless industry is highly competitive by nature, spurring innovation that leads to value and ultimately benefits consumers.

2 Responses to “Investment + Commitment + Spectrum = Benefits for Wireless Consumers” Leave a reply ›

  • avatar

    Thank you for these data. Clearly, the U.S. leads the cellular world in some areas.

    If you could, please provide some discussion on the metric "Efficient Use of Spectrum -- Subscribers Served per MHz of Spectrum Allocated." I see how the numbers are calculated, but I don't see how it is a measure of national spectrum efficiency by which countries can be compared. For example, why, intuitively, is the U.S. four-times more efficient at its use of spectrum than South Korea? (809,755 / 194,444)

    Thank you.

    • avatar

      Sure, it’s really a short-hand way of saying that we’re doing a lot with a limited amount of spectrum.

      The US has more wireless subscribers per MHz of spectrum allocated to commercial mobile wireless service than the other countries shown in the chart. Likewise, US wireless consumers use more minutes than wireless consumers in other countries. We have resorted to this metric as a short-hand way – or a surrogate – of indicating the relative efficiency of our wireless industry.

      We could use the number of minutes per MHz, but that would require us to calculate an estimated traffic volume per country (based on the reported average minutes and the total subscribership per country), and then deriving a minutes per MHz figure based on dividing the total usage by the total MHz. The result would again show that we handle more voice traffic per MHz allocated to commercial wireless use than other countries, even in instances where we have more spectrum allocated than the other countries – because we have more users, and more traffic per user than those other countries. But it is a second order calculation, using additional derived figures, and I prefer to stick to calculations that require the least adjustment.

      We have more users, and higher voice traffic volumes per user, than other countries. We’re also a bigger country geographically. That means there are peaks and valleys. Manhattan, Kansas, may not generate as much usage as Manhattan, NY, though we have as much spectrum in the one location as the other. Plus, customers in both cities may choose among five or more providers.

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