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A shortage of wireless spectrum will mean slower speeds at peak times for users. What’s causing the pending crisis, and what are the possibilities for averting it?

Demand for wireless bandwidth continues to grow by leaps and bounds as more people use smartphones and other devices on wireless networks. But the supply of the wireless spectrum is relatively constrained. The result is a looming shortage of spectrum capacity.

For users, a spectrum shortage is like a traffic jam. They can expect wireless “rush hours” to be characterized by failed attempts to connect, and more instances of dropped calls or frozen Web browsing. Both 3G and 4G speeds will be considerably slower than expected and, at worst, video streaming won’t be possible.

What can governments and carriers do to alleviate the shortage’s effects? Unfortunately, efforts to improve spectrum availability and efficiency may not occur fast enough to keep up with demand. For example, governments use auctions to allocate or reallocate frequency bands to operators, but auctions can take years or even decades to occur. And LTE technology has substantially improved spectral efficiency, but the increase in wireless traffic has far outpaced the efficiency gains.

One way to allocate this scarce resource is for carriers to charge higher prices for higher speeds at peak times. Accelerating and streamlining processes for allocating spectrum and approving new cell towers may also be effective ways to relieve the congestion.

In this TMT Predictions video, Deloitte Touche Tohmatsu Limited researchers Duncan Stewart and Paul Lee explore the looming crisis and some possible solutions.