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Summary:

AT&T, believing LTE won’t be robust enough by the time it begins its 2011 deployment, will deploy HSPA+ over its entire footprint by the end of the year. The network will offer speeds of up to 14 Mbps and cost less than $10 million to deploy.

AT&T has what it hopes to be an ace in the hole while it transitions to the Long Term Evolution fourth-generation wireless network technology — faster 3G over its entire footprint by the end of the year. How fast? Up to 14 Mbps through an upgrade to the HSPA+ technology standard, according to John Stankey, president and CEO of AT&T Operations, who spoke with me this afternoon.

In the interview Stankey confirmed plans for the nation’s second-largest carrier to move from the current planned rollout of HSPA 7.2 (which offers maximum theoretical speeds of 7.2 Mbps down and real-world speeds of about 3.5 Mbps) to a version of HSPA+ that will offer real-world speeds closer to 7 Mbps down. He said that, for less than $10 million, AT&T can upgrade its 3G network to provide HSPA+ network access to 250 million people by the end of the year. AT&T still plans to begin its LTE roll out in 2011, but for less than $10 million it can provide a fallback network that’s more robust than the 3G network offered by its closest rival, Verizon. My hunch is that it can also afford to take more time completing its LTE rollout while still competing with its rivals, which are boosting speeds on their networks.

Verizon’s 3G network is based on a CDMA standard (EVDO Rev. A) that currently offers speeds of up to 3.1 Mbps (I generally get about 1.7 Mbps down on my modem). As Verizon upgrades to LTE (it plans to cover 100 million people by the end of this year and its entire footprint by the end of 2013) it’s going to offer its users two networks with widely varying speeds. In places with LTE, Verizon says speeds will range from 5 to 12 Mbps down, while in places it has 3G, users will see speeds drop significantly. This is one argument in favor of Verizon looking at deploying EVDO Rev. B in some places, which offers speeds of up to 14.7 Mbps down. Verizon denies this plan.

So, essentially AT&T wants to spend a fairly small chunk of change to make sure its customers have a network on which to fall back on without experiencing a steep drop in speeds. It also wants to buy itself some time to roll out an LTE network without looking like a laggard, speed-wise. Indeed, T-Mobile is deploying an HSPA+ network that’s delivering speeds of up to 8 Mbps in real-world tests.

AT&T also wants to make sure its customers have good devices and coverage while the vendor community gets the LTE ecosystem up to speed. Stankey has long been vocal about his belief that LTE won’t be ready for the mainstream until 2014, and said today, “The vendors are experiencing some challenges on certain features and software, and first implementations in 2011 will be…pretty vanilla.”

Among his worries are issues about roaming between 3G and 4G, and the handoffs between voice and data on 4G networks. He believes a wide variety of LTE handsets for the general consumer, as opposed to early adopters, won’t appear until 2014 — which is also the same time he expects voice to be delivered via VoIP on LTE. Until then, the handsets will be big, have bulky antennas and suffer from short battery life, he predicted. However, he also acknowledged that the HSPA+ handset ecosystem will take some time to develop and said the first products will likely be data cards — a forecast which effectively killed my hope of a fourth-generation iPhone that works with HSPA+ networks.

Even if the handset experience for LTE is lame through 2014, the market for data cards or service for devices like the iPad is a growing opportunity that AT&T can’t ignore. And that’s the main benefit to an upgrade to HSPA+ for Ma Bell: It gets double the speeds on its network for a low price, and it won’t fall behind as it competes with what would otherwise be faster speeds on Verizon’s LTE network, Sprint and Clearwire’s WiMAX network and T-Mobile’s HSPA+ network next year and beyond.

Related GigaOM Pro content (sub req’d):

Everybody Hertz: The Looming Spectrum Crisis

Thumbnail image courtesy of Flickr user mrbill

  1. i do not see faster speeds to be near as important as making the networks that are already out there more reliable. unless users plan on streaming HD video all day i would say the current technology is plenty fast. but the networks in america are not reliable enough and too often slow down to a snail pace due to congestion. but this is not the case around the world, which is why i think there could be dramatic improvement made.

    it seems that lately the carriers want to move on to the next technology before they have finished with the deployment of the first. maybe they should slow down a bit and finish the build out of a rock solid reliable 3G network before they even start on the 3.5G and 4G ones. the transition from 2G to 3G has not even completed yet, how about doing that first?

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  2. PaloAltoWorldView Monday, May 17, 2010

    Based on this, Clearwire/Sprint with 120 MHz worth of spectrum available for WiMax is looking great! It’s available in 32 cities already, with many more to come before the end of THIS year, 2010. AT&T, Verizon and T-Mobile — how are you liking that 5 gig/month cap? With WiMax — no meaningful cap, at least not yet…

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  3. [...] a bridge to LTE, which in all liklihood will be an overlay network to 3G for the next few years. As AT&T Operations CEO John Stankey told GigaOm yesterday, “[LTE] vendors are experiencing some challenges on certain features and software, and first [...]

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  4. [...] a bridge to LTE, which in all liklihood will be an overlay network to 3G for the next few years. As AT&T Operations CEO John Stankey told GigaOm yesterday, “[LTE] vendors are experiencing some challenges on certain features and software, and first [...]

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  5. [...] ATT also downplays LTE, saying not ready for prime time for 5 more years… Exclusive: The Details on AT&T’s Bridge to LTE [...]

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  6. As a photographer, I’ve watched the equivalent of cell network speeds: pixel counts, grow and grow with each camera generation. Fortunately for that market, most consumers eventually realized that there’s more to picture quality than the number of pixels used to record an image.

    My guess is that eventually GigaOM and consumers will realize the same with claimed network speeds and new enhanced speed technologies. The issue is that for a chunk of spectrum and a physical volume of space, physics dictates practical limitations on the amount of data that can be moved through it in a given period regardless of the technology employed. That’s why carriers impose caps.

    Of course, new data transmission technologies do have three clear opportunities for carriers: to claim the fastest network in advertisements, to charge more for the use of the “enhanced” technology, and for new and extended service contracts with the subsidized phones required to take advantage of the technology. Too bad there’s no guarantee that customers will see any improvements in saturated enviroments.

    Given that the spectrum available to the carriers will always be finite, the only real way to improve data rates is to reduce the amount of data moving through a given volume of space. Carriers know this and again, that’s why they impose caps. Another way is to shrink the average range of access point. These means investing in infrastructure, i.e., more less-powerful towers.

    Unfortunately, as long as GigaOM and others keep trumpeting speed as the one and only thing, and carriers keep giving them at least on paper what they want, we won’t get what we need for practical and widespread high speed cell networks.

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    1. i agree with you 100%. what is really needed instead of 4G is a doubling of the number of 3G towers to make the current technology work the way it should. i would also like to see 2G eliminated before moving the current 3G towers to 4G.

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      1. the wireless core network (i.e. backend) associated with 4G can accomodate smaller cells, so what you are hoping for may actually happen. to what degree remains to be seen.

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    2. Excellent comment Ray. I could not agree more.

      Would also like to point out that there is a viable solution that can be deployed today at low CapEx and hardly any cost per bit: change the software in Wi-Fi access points / modems so that the spare capacity of fixed broadband networks can be used to offload mobile networks. Have a look at Anyfi.net for an example of such tech (disclosure: I work on this).

      Cellular data is a scarce resource, and always will be. It should not be wasted needlessly.

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  7. I live about 10 minutes away from a major city.

    The total amount of wireless carriers that support where I live? One. That would be Verizon, the most expensive of them all.

    Why not, instead of focusing on speed, try to expand the network coverage to people like me who don’t have any alternatives?

    It seems like it would make quite a bit more business sense as well. Pick up new customers to offset the pricing of building out the network.

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  8. [...] with 4G networks, why is AT&T seemingly failing to keep pace?In a well-conducted interview with GigaOm, AT&T’s CEO of Operations, John Stankey, lays out the company’s mobile data [...]

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  9. [...] why is AT&T (NYSE: T) seemingly failing to keep pace?In a well-conducted interview with GigaOm, AT&T’s CEO of Operations, John Stankey, lays out the company’s mobile data [...]

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  10. This may be one of the more meaningless posts on here, but I take issue with Stacey calling the current AT&T “Ma Bell”. The current AT&T is NOTHING like old Ma Bell. The culture is totally different (for the worse), the R&D wing of the old AT&T is split into fractions of what it was and is in tatters, focusing on short-term goals for financial gain instead of long-term goals for the betterment of technology, and AT&T is no longer a national monopoly tightly regulated by the government (fortunately, or unfortunately). Wouldn’t it be interesting if they never split up the Bell System? We might today have only one cellular phone company to grapple with and a more complete national system of cellular infrastructure that would be REQUIRED by the government to cover rural areas as well as urban ones.

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