In most cases unlicensed bands are industrial, scientific and medical (ISM) radio bands which originally were reserved for non-communication purposes. Hence, unlicensed operation needs to be tolerant of interference from other devices and limit output power according to local radio band regulations. Licensed operation guarantees interference-free operation and transmission with necessary output power, which eventually results in much longer link distances.
Equipment for unlicensed frequency bands is being broadly produced as consumer goods. Equipment for licensed frequency bands is specific and is not being designed for mass production, which has impact on its costs.