AT&T's Gig Economy Driven by Spectrum Obsession in 2017AT&T's Gig Economy Driven by Spectrum Obsession in 2017

AT&T executives spent a good deal of their first-quarter earnings call Tuesday evening focusing on how the carrier will deploy and manage spectrum in the near future, particularly now that it has captured the contract to build the FirstNet nationwide emergency workers network.

"Our goal is to put a gig [1 Gbit/s] in our customer's hand, wherever they are on the network," said CEO Randall Stephenson on the call.

AT&T will get access to 20MHz of low-band 700MHz nationwide spectrum to build the FirstNet network out this year. Any bandwidth not used can be put to commercial purposes instead. The x-factor is that the operator doesn't know which states will opt to use the FirstNet network, and which will build their own. (See AT&T Formally Lands FirstNet Contract and AT&T Has FirstNet Public Safety Deal in the Bag – Sources.)

CFO John Stephens said that this could put its capital expenditure for the year at the top end of the expected range -- $22 billion -- depending on demand.

Further to that, AT&T plans to deploy mid-band AWS-3 and WCS spectrum this year. All of the radio access (RAN) infrastructure for FirstNet and the other bands will be deployed at the same time, saving Ma Bell big money on the truck rolls.

All of this bandwidth can be bonded in radio channels to help AT&T get closer to gigabit speeds on its 4G network today. It intends to deploy "5G Evolution" technology -- otherwise known as LTE-Advanced -- in 20 markets this year.

Over the next few years, this spectrum focus will move towards 5G. "Longer term, this is the nationwide broadband opportunity ... Fixed-type configurations of 5G will come before mobile," said CEO Stephenson, suggesting AT&T will start to offer fixed services in 2018.

Of course, it needs to secure a 5G-compatible spectrum footprint first. The operator says it will make a decision in the next few days on whether to top the rival $1.8 billion bid for 5G-compatible spectrum holder Straight Path Communications Inc. AT&T bought FiberTower for similar 39GHz spectrum earlier this year. (See AT&T Could Cover 98% of US Pop. With FiberTower '5G' Spectrum and Did Verizon Outbid AT&T for Straight Path?)

AT&T missed Wall Street expectations with revenue of $39.4 billion, compared to $40.5 billion a year ago, with adjusted earnings per share of $0.74. Analysts had been expecting revenue of $40.6 billion.

The operator brought in 2.7 million wireless adds for the quarter, mostly in the connected device or pay-as-you-go segments.

— Dan Jones, Mobile Editor, Light Reading