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Frequency spectrum is a limited resource and therefore must be used efficiently to provide end-users with the best possible experience. Spectrum efficiency is defined as the optimized use of either bandwidth or spectrum that allows for the maximum transmission of data with the fewest transmission errors possible. For example, over cellular networks this refers to maintaining acceptable quality of service while allowing the maximum number of cell phone users to access the network simultaneously. There are three main components to spectrum efficiency: economic, technical and functional. Each of the three components contributes to the overall measurement of spectrum efficiency.
Economic efficiency takes into account revenue generation, profits and value generated from a limited spectrum resource. Assigning economic value to the overall measurement of spectrum efficiency is crucial to effectively leveraging the market based licensing. It is also critical to effectively determining and setting spectrum pricing models.
Technical efficiency takes into account the maximum amount of data a spectrum resource can handle. Such factors include the geographic area covered, the volume utilized, and the total bandwidth. Measuring the technical spectrum is crucially important for cellular networks in particular, but it is still factored into other communications spectrum ratings, such as radios.
Functional efficiency establishes how well the use of a spectrum resource meets the needs of end users, allowing those users to complete tasks, such as a conversation, both efficiently and effectively. Additionally, it may compare the present state of the resource to other potential applications to determine functionally. If a trucking company relies on the capability of instant communication, delivered reliably and cost effectively while constantly moving, then such network requirements may not be compatible with a public network that normally seek to maximize traffic output. Public safety and emergency services are other examples where measurement of functional efficiency is crucial due to reliance on reliability and near-instant connection speeds.
Usually, the measurement of spectrum efficiency will take into account all three of these dimensions to determine optimal usage. Often, however, various communication mediums inevitably score higher in one area than in the others. For instance, mobile radio and cellular services garner high technical spectrum efficiency ratings when compared with private mobile radios; however the latter usually offers more functional spectrum efficiency. Assessing the overall measurement is both a qualitative and a quantitative process, incorporating both technical measurements as well as feedback from end users.