AT&T's wireless chief hints at curbing iPhone data hogs

Ralph de la Vega, CEO of AT&T Mobility, played a good bit of defense, outlined the company's upgrade plans, hinted at curbs for data hogs and said the telecom giant is improving service in New York and San Francisco.

Ralph de la Vega, CEO of AT&T Mobility, played a good bit of defense, outlined the company's upgrade plans, hinted at curbs for data hogs and said the telecom giant is improving service in New York and San Francisco.

De la Vega was chatty as usual at a UBS investor conference (Techmeme), but the big news for AT&T revolved around the following:

AT&T has bolstered its coverage, but still has two markets "performing at levels below are standards and that is Manhattan and San Francisco. De la Vega said New York service was hit by a jump in 850 megahertz spectrum that data demand picked up. That jump put pressure on AT&T's cell sites. In San Francisco, it's a similar story and AT&T is installing new sites. "I am very confident that you are going to see significant progress, and our company is committed to bringing those two markets up to the standards that we are seeing in the rest of the nation, he said.

Data hogs, think 3 percent of iPhone users, are generating 40 percent of data traffic. Here's de la Vega's full excerpt from the talk:

I'm not going to give you in detail what we're going to do, but if 3 are causing 40%, then we're going to try to focus on making sure we give incentives to those small percentages to either reduce or modify their usage so they don't crowd out the other customers in those same cell sites. And you'll see us address that more in detail.

But what we're doing now is making sure that we do focus groups to understand what customers are doing and how customers are likely to behave in the future. And the interesting thing is that customers are not aware, fully aware, of how they are driving traffic and what constitutes high traffic or not. For example, when we do focus groups, some customers may think that because they have a lot of e-mail traffic, that causes a lot of data. That is not the case.

What's driving usage on the network and driving these high usage situations are things like video, or audio that keeps playing around the clock. And so we've got to get to those customers and have them recognize that they need to change their pattern, or there will be other things that they are going to have to do to reduce their usage.

We have erred on the side of understanding customer behavior first, and then taking action second. But you can rest assured that we're very, very sure we can address it in a way that is consistent with net neutrality and FCC regulations that are in place or will be in place.

Enterprise demand for the iPhone is strong. De la Vega said:

We're seeing a great uptake with business customers on the iPhone. I think that there was some hesitancy about security, but those days are behind us. I think that most major corporations are warming up to the iPhone, and they are signing up in very good numbers for us. We're very pleased with the take.

And finally, de la Vega outlined AT&T's bet on the HSPA 7.2 network upgrade. Verizon has bet big on LTE architecture. De la Vega said:

HSPA 7.2 speeds are a major step up and have several different advantages. Number one, it doubles the theoretical peak speeds. AT&T already has the US fastest 3G network, and that's based on independent tests. Now with 7.2, the nation's fastest 3G network is getting even faster. More importantly, 7.2 is ready now and we're deploying it now. We will have this technology up and running in six markets by the end of this month, and we plan to be launched in 25 of our top 30 markets by the end of the second quarter next year.

Customers will be able to see the difference and experience the benefits of 7.2 very soon. We already have more than a dozen HSPA 7.2-compatible devices, including the iPhone 3GS, feature phones, smartphones, laptop devices, and with many more to come.

It's easy to talk about LTE, but it will be some time before we see a rich set of devices. Meanwhile, HSPA 7.2 is being adopted and deployed around the world.

Related: Can a black eye from Consumer Reports harm AT&T, iPhone?