AT&T is the second largest
wireless provider in America behind Verizon. AT&T is also one of
the most maligned networks in the country thanks to what is widely
perceived as a shoddy 3G network. In many cities large and small, the
3G coverage of AT&T is spotty and at times non-existent making
for many irate customers. AT&T's wireless network ranked
last in customer satisfaction in a Consumer Reports study
conducted in December 2009.
AT&T maintains that the poor
performance in some of its markets for its 3G network is due in part
the huge amount of bandwidth that iPhone wielding customers consume.
AT&T has seemingly brought the ire of analysts and customers on
itself and also reportedly spends less on their wireless
infrastructure than Verizon and third place Sprint per customer.
PC World reports that analysts
from research firm TownHall investment Research estimate that AT&T
to spend about $5 billion on its wireless network to catch up to
the coverage that Verizon offers.
TownHall reports that AT&T
has spent $308 per customer on its network over the last three years
compared to $353 per customer from Verizon and $310 per customer from
Sprint. AT&T spends more on its wired network than it does on its
wireless network according to analysts.
Ironically, the wired
network makes less money for AT&T than its wireless services.
AT&T is said to get 57% of its operating income from wireless and
only 35% from wired services. At the same time, wireless services
only get 34% of AT&T's capital expenditure while wired services
get 65%. AT&T apparently wants to change that situation though.
AT&T has asked the FCC to drop regulations that require
it to support its aging wired network despite the fact that the
use of the network is declining. AT&T has asked the FCC to
provide a deadline for phasing out wired service around the country.
If the FCC agrees, AT&T will have much more funds available for
its wireless network. Whether or not the FCC will agree to the
request is unknown.
TownHall's Gerard Hallaren figures that
the amount AT&T needs to spend on its network could balloon to $7
billion thanks to the need for additional backhaul capability. AT&T
is already adding additional backhaul capability to its towers in
preparation for rolling
out its faster HSPA 7.2 service and the transition to LTE
networks starting in 2011.
Hallaren says, "This is going
to be a juggling act for them [AT&T]."
The iPhone has
been keeping many customers tied to AT&T thanks to the exclusive
deal between AT&T and Apple. That exclusive arrangement is
expected to end by the middle of 2010 – at that point, many expect
to see a mass exodus of customers as they move from the AT&T
quote: Plus, if a lot of the iPhone people leave, maybe my overall service will be better.
quote: Who would spend $5B today on 3G with LTE right around the corner.