AT&T has been taking a public relations beating over its shoddy wireless network for far too long. I know I've grown tired of writing about it. But, on a conference call to discuss quarterly earnings yesterday, company executives offered specifics on what they'll be doing to beef up the network in 2010 and beyond.
In a nutshell, the company said it's upping its investment by $2 billion over last year. The company didn't provide a hard number but said it is ramping up its capital spending. Last year, it spent $17.3 billion. This year, that number will be between $18 billion and $19 billion. AT&T Operations President and CEO John Stankey said, "Wireless is our No. 1 investment priority."
Specifically, the company addressed two key markets: San Francisco and New York City, which have been particularly troublesome areas given the "large population centers, very sophisticated users with high expectations, and very high volumes" in those regions.
Rather than try to paraphrase the specific details, here's what AT&T Operations President and CEO John Stankey said on the call about the progress made in the last 90 days:
First, we've added cell site controller capacity. In New York in particular, the gating factor was equipment capacity. We had to work with our vendor to get upgrades put in place. Those are now mostly behind us, which allows us to add radio capacity. The process of changing out radio equipment may cause variations in performance in particular locations on specific days -- that's just the reality of the work. That said, our 3G voice composite quality index has improved in each market over the past 90 days, with three consecutive months of improvement in New York and a significant step up in Manhattan as we close the year. Again, these numbers tell us we are closing the gap against our immediate target, which is the performance level we achieve today in our top performing markets.
OK, so there's what they've done already. What's next?
We're adding third and fourth radio network carriers to maximize capacity on available spectrum. In Manhattan specifically, now that we have scalable cell site controllers in place throughout most of the island, we're intensely focused on putting more radio capacity on the street. We'll increase the amount of 3G spectrum and radio capacity by one-third in high volume areas of the island by the end of the first quarter. While we are through the majority of our zoning challenges in the Bay area, we'll continue to work the remaining issues we have in parts of the Financial District and a handful of other locations to final resolution. We're adding cell towers; and over the coming months, we're building and upgrading high-capacity antenna systems to boost performance in high-traffic areas like stadiums, convention centers, and public transportation routes.
OK. That's a lot of chatter about New York and San Francisco and 3G. But what about the rest of the country and the rollout of next-generation technology? Stankey says:
Beyond these market-specific efforts, the major network initiative we have underway is our nationwide HSPA 7.2 deployment. HSPA 7.2 is a very big deal for the industry and for our customers. It's today's real opportunity to increase speed and there is an echo system to support this change now. With software and backhaul upgrades, HSPA 7.2 has the ability to double the theoretical peak speed of the 3G network to 7.2 megabytes. It will deliver those speeds to customers well ahead of the time when an LTE ecosystem with handsets is available. And as we continue to move to LTE, it will provide a much more robust network experience when customers move outside of 4G locations, especially around the globe where LTE will take time to achieve ubiquity. 7.2 is a major advantage. Carriers around the world are implementing it. The technology is available now. We already offer 10 devices that are 7.2 capable, so customers will be able to experience its benefits in the near-term. We're very pleased to say that one of the 7.2-enabled devices that will have connectivity on our network is Apple's new iPad, which was unveiled yesterday.
So, where are we with THAT deployment? Stankey continues:
We've already turned up 7.2 software in our 3G cell sites nationwide. That alone improves consistency in accessing data session and increases network efficiency. The next step is to build out backhaul, focusing first on our highest trafficked cell sites. This is the same build we would do for LTE, so it's a seamless, efficient and forward LTE-compatible deployment. We anticipate that the majority of our mobile data traffic will be carried over the expanded fiber-based backhaul by the end of this year. The bottom-line is that the nation's fastest 3G network will continue to get even faster throughout 2010 and 2011 in a process that is a natural progression to LTE.
Actually, I know I've given AT&T a lot of grief over the network performance so I'm happy to finally post something with details about the work the company is doing to make the experience better for all of its customers, not just iPhone owners.
I don't see there being a ton of demand for the iPad 3G, relative to the demand for the WiFi-only iPad. Who wants to pay $130 more for a device that relies on AT&T's network for connectivity? Sure, it comes with free access to AT&T WiFi hot spots but is that worth the extra $130 bucks for a 3G unit?
No. At least not yet.