AT&T's Wi-Fi hotzone effort: An answer to its network woes?

AT&T is rolling out its Wi-Fi hotzone experiments to more locales and the move could potentially bail it out of its network woes.

These Wi-Fi hotzones are areas where AT&T uses Wi-Fi to supplement network coverage. AT&T's first pilot was launched in Times Square in May and now plans to use Wi-Fi in busy districts in Charlotte, N.C. and Chicago.

Now you can chuckle at the fact that AT&T has to use Wi-Fi in certain areas to ease network congestion, but the move could make a lot of sense. On AT&T's second earnings conference call, executives said network coverage was improving in New York, but San Francisco's improvement was about 90 days behind.

Why the hangup? Regulations. It's damn hard to add towers in New York and San Francisco. Everyone wants coverage, but no one wants a cell tower visible in the distance. AT&T's answer could be Wi-Fi---at least as a stopgap.

Overall, AT&T customers probably don't care how they get connected---as long as they do.

AT&T said it will gather more data on Wi-Fi hotzones and continue to roll them out. Bet on more hotzones to come. AT&T CFO Rick Lindner said last week:

I'm pleased to report that we are seeing and our customers are experiencing the impact of these investments. Companywide, our 3G average data download speeds are up 15% versus a year ago, based on internal data. In New York our data is showing download speeds that are up 31% over the past six months. 3G dropped calls improved 13% across the metro area and 23% in Manhattan. 3G blocked calls are also down 21% in New York, in the New York metro as a whole, and 39% in Manhattan.

And looking ahead, we are moving as quickly and as aggressively as possible. As our Chief Technology Officer said in remarks a few days ago, we are moving heaven and earth to execute our network plan. We're adding additional third and fourth carriers, adding fiber backhaul and Ethernet to cell sites. We're deploying in-building and venue solutions where appropriate, and we are doing more with WiFi, including piloting WiFi hot zones like the one we've turned up and have running in Times Square.

In San Francisco we are implementing the same actions, and we are seeing similar progress. But we are about 90 days behind the schedule in New York City. You can expect improvement in San Francisco to follow similar trends to those in New York.