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AT&T isn't working that hard on network upgrades (updated)

Josh Carr

See updated response from AT&T below.

With some pretty damning evidence, both FSJ and Gizmodo are shouting at AT&T, which claims that they've upgraded their network although they've spent less each quarter on upgrades since the iPhone was introduced in 2007. AT&T CEO Ralph De La Vega recently said that "AT&T is upgrading its network to cope," and that AT&T is continuing to look into ways to entice users to limit the way they use data.

That statement made sense at one point: give the customers a tiered data structure that's cheaper for those who don't use much bandwidth. This would probably never happen: it's not too often that you see a wireless provider actually help its customers. In reality, we'd probably see data rates stay where they are, but get an increase in price for "unlimited" data as we've come to understand it.

With another look at the information found in AT&T's Financial and Operating Statistics Summary [PDF Link], you begin to see tremendous flaws in AT&T's logic. They've consistently made more money (80% more revenue compared to Q4 2007) from wireless data, yet on average, AT&T has spent less each quarter for network improvements.

So where has all of that extra money gone? No one can argue that it's the recession sucking up the dollars, because AT&T's profits have remained pretty stable during the whole thing. The money obviously hasn't been spent on network improvements. Perhaps AT&T is fighting Verizon ads with the extra cash?

One thing is certain, the company is not serving AT&T customers in the best manner possible. With rumors that the iPhone may soon be available on Verizon's network as well, AT&T needs to put the pedal to the floor and come through with something... anything.

: Early on the morning of 12/21, I received an email from Seth -- he's handling some of AT&T's public relations. It looks like the figures we reported here, while accurate, don't actually cover the whole story. He states that AT&T is actually working very hard on wireless network upgrades. The numbers we used to draw our conclusions covered a lot of aspects of AT&T's spending and not just upgrades. While AT&T won't give out a specific outline of their upgrade budget, they've spent $17 or $18 billion on network upgrades this year.

Let me just say that I've been pleasantly surprised with the reliability of Denver's service since they finished the upgrades in October. I had been dropping calls several times a week prior to the upgrades. Since the end of October, I have yet to drop a call. Obviously, the user experience varies from city to city and we understand that some cities are really struggling. If this upgrade trend continues, hopefully we'll be seeing more cities follow Denver's lead sooner rather than later. I'll let you read through his bullet points instead of re-hashing it for you.

In direct contrast to your headline, we are working very hard on network upgrades. Here's a look at how we're spending what's expected to be between $17 and $18 billion in improvements in 2009 to our wireline and wireless networks, with billions on wireless:
  • We are nearly doubling the wireless spectrum serving 3G customers in hundreds of markets across the country, using high-quality 850 MHz spectrum. This additional spectrum expands overall network capacity and improves in-building reception.
  • We are adding about 2,000 new cell sites to our network in 2009, expanding service to new cities and improving coverage in other areas.
  • We're adding about 100,000 new backhaul connections, which add critical capacity between cell sites and the global IP backbone network.
  • We're enabling widespread access to our Wi-Fi network – the largest in the country with more than 20,000 hotspots in all 50 states – allowing customers to take advantage of the best available AT&T mobile broadband connection.
  • We're rolling out even faster 3G speeds with deployment of HSPA 7.2 technology and are preparing for field trials of next generation, LTE wireless networks next year, with deployment planning to begin in 2011. This schedule aligns with industry expectations for when a wide variety of compatible 4G wireless devices should be available.
Let us know what you think about this, and what your coverage is like, the comments.

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