AT&T will upgrade its 3G network to HSPA 7.2 beginning later this year, with completion expected in 2011.
Yesterday’s announcement wasn’t entirely unexpected, reiterating previous commitments made by the company to upgrade its network on the way to Long Term Evolution technology.
Speaking at The Wall Street Journal’s D7: All Things Digital conference yesterday, AT&T CEO Randall Stephenson said upgrades are needed as current networks across the industry are not able to deal with the skyrocketing data demands of smartphones and netbooks.
When asked whether AT&T’s network was ready for the demands of the iPhone 3G when it was rolled out, Stephenson cited the company’s investment in its infrastructure and low churn rate as proof that AT&T’s network was up to the challenge.
“We spent $9 billion dollars last year in procuring the 700 MHz spectrum,” Stephenson said.
“All of this is about network quality. And when you look at our results over the last 18 months . . . you see our churn dramatically coming down. You see the rest of the industry rather flat,” he said.
James Brehm, senior consultant for Frost and Sullivan, said he thinks Stephenson’s claims of readiness are justified. “I think they were [ready]. They had HSPA in a lot of markets, and they didn’t churn. The exact opposite happened – people churned to get the iPhone.”
Both Verizon Wireless and AT&T have announced plans to roll out LTE. Verizon has committed to rolling out 30 markets by 2011. Brehm said that the differences in strategy between AT&T and Verizon reflect differing philosophies.
“Verizon is jumping ahead. They’re planning for the long-term future. AT&T is a bit more conservative, and they’re planning for the near future, with plans to move to LTE after they’ve achieved HSPA 7.2,” Brehm said.
Brehm admitted that he thinks Verizon’s claims might be a bit aggressive; however, he doesn’t think Verizon necessarily needs LTE right now.
“Quite frankly, I’m not sure that LTE is needed by Verizon. Their EV-DO capacity is not even touched. They’ve got enough speed right now. They’re just getting ahead of the curve by rolling out LTE right now. But I would say, [AT&T and Verizon] will be fairly neck-and-neck in the long term,” Brehm said.
When asked whether he thinks these most recent upgrades from AT&T fit with its strategy of billing itself the “smartphone carrier,” (story here) Brehm said it most definitely does.
“It’s going to give them that capability,” Brehm said, while complementing the carrier’s current offering of smartphones, saying it was by far the “most extensive.”
In April, AT&T said that it had plans to invest $17 billion to $18 billion in 2009, with two-thirds of that going into wireless and wired broadband networks.