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The bandwidth required for cell phones is much lower, and the multiplexing schemes much more complex. Cell phones use a lot of extremely adaptive variable bit-rate codecs, which is why your call quality varies as you drive.

But fundamentally, they are using VBR codecs that don't even live up to the standard 3.1 KHz PCM bearer spectrum of a fixed-line 64kbps DS0 channel. This is what, maybe 8 kbps (extrapolating from the relatively high quality to bandwidth ratio of something like G.729A, though they're obviously not using that)? That's hugely different than providing multi-megabit access to every endpoint, even with severe oversubscription and statistical packet multiplexing / low contention ratios on the table. This is one of the reasons why 3G network operators are so freaked out about tethering and data usage in general.

Like you said, there's only so much frequency. This "the world's gonna go wireless" stuff is a pipe dream. The enthusiasm for all forms of fixed-line communication will return with great fanfare once application-level bandwidth requirements increase an order of magnitude or two beyond where they are now, because fixed-line transmission is the only thing that can keep up at that point.

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