AT&T Ramps Up LTE Plans and Partnerships
All of the major wireless vendors are making their move to next-generation cellular networking technology, known as 4G. AT&T, the second-largest provider, is gearing up for the next big thing with the announcement that it has reached agreements with the equipment providers for its 4G network.
While both 3G and 4G both use similar frequency bands and the same bandwidth, the big difference is the data rates. While 3G is good for up to 2 Mbps, 4G starts at 100 Mbps and is moving toward 1 Gbps. That should keep iPhone users happy as they sponge up all the bandwidth on a network.
Verizon Wireless, which is jointly owned by Verizon Communications (NYSE: VZ) and Vodaphone, AT&T Wireless, a subsidiary of AT&T (NYSE: T) and T-Mobile, the mobile arm of Deutche Telekom, have all committed to the Long-Term Evolution standard, or LTE. Sprint Nextel has cast its lot with WiMAX, but reportedly has looked at LTE as well.
Sprint and Verizon are already building out their 4G networks, but on Wednesday, AT&T got the ball rolling with the announcement that Alcatel-Lucent and Ericsson will be the equipment suppliers for its 4G network. Those two firms were the providers of its 3G network as well, and are also Verizon's partners.
By sticking with Alcatel-Lucent and Ericsson, AT&T has cleared a path for an easy upgrade. The 3G equipment already in place from Alcatel-Lucent and Ericsson will be easily upgradeable to LTE. Mostly, it's just a software upgrade but some new equipment will also be required to make 3G networking gear fully 4G-ready.
"AT&T has a key advantage in that LTE is an evolution of the existing GSM family of technologies that powers our network and the vast majority of the world's global wireless infrastructure today," John Stankey, president and CEO of AT&T Operations, said in a statement. "As some competitors move away from their existing investment in niche 3G platforms, we are able to efficiently and quickly move toward LTE while enhancing our existing 3G performance and providing access to a strong ecosystem of customer devices."
AT&T doesn't plan to begin LTE deployment until late 2011, however. For now, the company is building out its existing 3G network and upgrading to the new HSPA 7.2 technology. HSPA 7.2 raises 3G download speeds to 7.2 Mbps. The rollout will continue this year and into next. T-Mobile recently completed a similar upgrade.
AT&T announced in January that it will spend between $18 billion and $19 billion in capital expenditures in 2010, including an increase of approximately $2 billion in wireless network and backhaul investment.