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Smartphones choke networks

AT&T Chief Executive Randall Stephenson said U.S. wireless networks aren't prepared for the surge in smartphone use that has already shown signs of choking their networks.

He defended his company's wireless network's performance, though, which has come under fire for not being prepared for the popularity of Apple Inc.'s iPhone, which the company sells on an exclusive basis in the U.S.

Wireless capacity is an increasingly tough issue that carriers must wrestle with, particularly as their subscribers clog the network by surfing the Web, downloading video and texting on their smartphones. There's still work to do at both AT&T and its rivals, Stephenson said.

On Wednesday, AT&T laid out plans to upgrade the speed and capacity of its wireless network, which includes adding cellular sites, bolstering the underlying ground infrastructure and tapping into more powerful wireless spectrum. Last year, it spent more than $9 billion to further stockpile spectrum.

"It gets us out in front of where we think (network usage) is going to be," AT&T Chief Technology Officer John Donovan said in an interview with Dow Jones Newswires on Wednesday.

The company plans an aggressive deployment schedule, noting that the amount of money spent on the upgrades were unprecedented, Donovan said.

"It'll make a tremendous difference in availability of network," he said.

The results can so far be found in the amount of customers leaving AT&T for other operators. AT&T's churn, as it's known, is among the lowest in the industry in the last three months.

AT&T plans to begin the improvements later this year and finish in 2011. The Dallas carrier also said it would hold trials for fourth-generation, or 4G, wireless technology in 2010, with deployments slated for the following year.

Industry observers applauded the announcement.

"It is an evolutionary step for the company's network transformation," said James Brehm, a consultant for Frost & Sullivan.

Stephenson was speaking at the seventh All Things Digital Conference, known as D7, taking place this week in Carlsbad. The conference is sponsored by the Web site All Things Digital, which, like The Wall Street Journal and this newswire, is owned by News Corp.

Smartphones are expected to flood the market in the coming months. In the next few weeks, for example, Sprint Nextel is expected to begin selling the Palm Pre. Meanwhile, Blackberry-maker Research In Motion Ltd. is touting the wireless Internet experience of its latest Blackberries.

"If you look at reasons for churn in our industry, the No. 1 reason is network quality," Stephenson said.

"If you look at our results over the last 18 months, you'll see our churn is dramatically down," he added."I feel like we are closing the gap on this, but we're not there yet. We are about to see these issues manifest themselves industry wide."

Stephenson added he sees AT&T selling the Pre after the exclusive arrangement with Sprint expires, and that the recession's biggest impact has been on the company's landline phone business.

Источник: Total Telecom

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