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AT&T Puts Up $14B to Boost Broadband

Dan Jones
LR Mobile News Analysis
Dan Jones, Mobile Editor
11/7/2012
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AT&T Inc. (NYSE: T) is planning to significantly expand its 4G Long Term Evolution (LTE) network -- partly through the use of small cells -- and its wired broadband footprint with a US$14 billion investment in infrastructure.

CEO Randall Stephenson, unveiled the plan -- dubbed Project Velocity IP, or "VIP" for short -- in New York City Wednesday morning. The operator says it plans to spend $8 billion on wireless and $6 billion on wired broadband through 2015.

"The impact of this plan takes us to a new place," Stephenson said. "We're going to bring high-speed connectivity to millions more people across this country."

With VIP, AT&T expects to boost its annual capital expenditures (capex) to $22 billion a year, from $19 billion currently.

LTE and small cells key to VIP
The new plan would bring LTE to 99 percent of AT&T's customer base in its 22-state wireline area. "We plan to extend our LTE deployment by more than 50 million PoPs to 300 million people in 2014," said Stephenson.

This will mean adding 10,000 new macrocells, according to John Donovan, senior executive VP of AT&T technology and network operations. He made it clear, however, that "wireless densification" of its network through the use of small cells and distributed antennas is the name of the game for AT&T.

AT&T is also planning to deploy 40,000 small cells as part of VIP, Donovan said. AT&T will start deploying HSPA+ fast 3G small cells this quarter with a wider push in 2013.

That would be followed in 2014 by LTE and Wi-Fi combo small cells. (See Small Cell Service: If 9 Was 6.)

"There's no surprise what's causing this: the full shift of voice communications to wireless and surging demand for wireless data," says John Stankey, chief strategy officer at AT&T.

Spectrum
Underpinning all this is a broader spectrum position for Ma Bell.

"Over the near term, we'll round out spectrum holdings in our existing bands," says Stankey. He says the company has made 40 deals for spectrum in secondary markets.

After that, AT&T will work on building out a new LTE on the 2.3GHz Wireless Communications Services (WCS) band. Federal Communications Commission (FCC) Chairman Julius Genachowski's office sent out a proposal to enable AT&T to carry out LTE mobile broadband deployments in 20MHz of the WCS band in September.

"We anticipate commercial traffic in this band in 2015," Stankey says.

Beyond that, the operator is still looking to the FCC to open up more spectrum for wireless services.

Wired broadband
AT&T plans to eventually extend IP Broadband to an additional 57 million customers over the next three years, with U-verse reaching an additional 8.5 million customers -- 33 million total -- by 2015.

It intends to extend U-verse IP DSLAM services to 24 million more customers by the end of 2015. The Project VIP plan also includes an upgrade for U-verse, to speeds of up to 75 Mbit/s and for U-verse IP DSLAM to speeds of up to 45 Mbit/s, with a path to deliver up to 100 Mbit/s in the future.

All this fiber growth puts AT&T on a path to eventually retire its old TDM equipment.

For more



— Dan Jones, Site Editor, Light Reading Mobile

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joanengebretson
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joanengebretson,
User Rank: Light Beer
12/5/2012 | 5:17:59 PM
re: AT&T Puts Up $14B to Boost Broadband


Some people were expecting AT&T to announced a fixed LTE offering similar to Verizon's HomeFusion, but that didn't happen. The company apparently believes mobile LTE is a suitable replacement for landline broadband for customers who are too costly to serve via landline broadband.


But the Verizon fixed offering has a special antenna to boost signal reception. It's questionable how reliable AT&T's offering is going to be in rural areas without that type of device.

Pete Baldwin
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Pete Baldwin,
User Rank: Light Beer
12/5/2012 | 5:17:58 PM
re: AT&T Puts Up $14B to Boost Broadband


Interesting point by Mike Genovese of MKM Research at Ethernet Expo -- investors had been wondering if AT&T would just continue running their network 'hot,' as so many operators in Europe and hte US have been doing.  Today's announcement suggests "you can't keep running your network hotter and hotter. You have to invest in capacity sometime."


He also pointed out the contrast with Verizon. Verizon has built out steadily at a consistent rate and wound up with FiOS and with map-smothering wireless coverage. AT&T tends to move in bursts, lagging the curve then jumping past it.

joset01
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joset01,
User Rank: Light Beer
12/5/2012 | 5:17:57 PM
re: AT&T Puts Up $14B to Boost Broadband


Yes, recall that a couple of years ago, AT&T drastically boosted backhaul spend because of consumer reaction to the poor quality of service on the iPhone in big cities on both coasts. They tend to work in fits and starts is my experience.


Similarly, George Notter also pointed out that this is a win for Juniper because their SRX security box is part of the wider LTE rollout from AT&T

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