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NEW YORK (
TheStreet) -- Lack of available wireless spectrum -- the government-controlled airwaves that carriers license -- is a major headache for telecom players
AT&T(T - Get Report),
Verizon(VZ - Get Report) and
Yet on the flip side, the so-called spectrum crunch spells upside for firms whose technologies help minimize traffic on big networks -- companies like
Ericsson(ERIC - Get Report),
Juniper(ERIC - Get Report) and
Lack of available wireless spectrum may actually spell upside for a host of network gear-makers.
With smartphones and tablets causing an explosion in mobile data, telecom networks are under massive pressure and need more capacity. The
FCC is looking to free up 500 MHz of wireless spectrum for broadband over the next decade, and is pushing for spectrum auctions to grab unused capacity from broadcasters.
Until then, "anything that helps provide capacity and reduces the demand is going to play an important role," said Peter Rysavy, president of consulting firm
Rysavy Research. "Companies involved in providing whatever alternatives there are are well-positioned, whether it's companies that specialize in Wi-Fi offload, like
Ruckus Wireless, or femtocell companies."
Wi-Fi specialist Aruba Networks, in particular, could be poised to tap into this trend. "Carriers such as AT&T and Sprint view offloading to Wi-Fi and femtocells (from towers/basestations) as key to their network strategy," said Goldman Sachs analyst Simona Jankowski, in a recent note. "Spectrum constraints [are] likely to drive greater microcell and Wi-Fi deployments over time."
Femtocells are essentially mini cell towers, designed to improve network connections inside buildings. Typically, femtocells have been used to provide better cell coverage inside homes and small businesses; today, carriers see the system as a way to help add capacity to their next-generation networks.
Sprint, which uses technology from Airvana in its 3G AIRAVE offering, told
TheStreet that it is looking to extend its reach from 50,000 femtocells to 100,000 in the near-term, and to 1 million over the next three years. Rival AT&T is also getting busy in this space, touting its
Cisco(CSCO)- built 3G MicroCell as a "mini cellular tower" for consumers and small business users.