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Summary:

The most pressing need for broadband providers in the U.S. is spectrum to enable the mobile ecosystem said AT&T’s CEO and chairman speaking at a conference. He also replayed his talking points on why AT&T must buy T-Mobile for $39 billion. At least he’s consistent.

AT&T's Randall Stephenson

AT&T's Randall Stephenson

The most pressing need for broadband providers in the U.S. is more spectrum to enable the mobile ecosystem, said AT&T’s CEO and chairman speaking at an event in Grapevine, Texas. At the TIA 2011 conference, AT&T’s Randall Stephenson replayed his talking points on why AT&T needs to buy T-Mobile for $39 billion. At least he’s consistent.

He did provide an excellent overview of the current scenario in which we find ourselves in the mobile industry, noting that if you mobilize a service, usage jumps. Back at the dawn of the mobile phone revolution, voice was mobilized and usage jumped (it’s still rising today according to Stephenson). In the 90s, email was mobilized and usage jumped. And in 2007, with the dawn of the iPhone, Internet access was mobilized and data usage jumped dramatically — by 8,000 percent for AT&T within three years.

However, this is only the beginning in Stephenson’s assessment. AT&T estimates data will grow on its mobile network by 8 to 10 times by 2015. In addition to the rush of data, the services adopted will be unpredictable, leading Stephenson to predict, “The next five years are not going to be planned and they are not going to be deliberate. In fact, they will be somewhat chaotic and will come faster.”

Stephenson’s plan is to offer a network that can deliver “secure, controlled chaos” for consumers, businesses and applications. He mentioned open network APIs as well as efforts by operators to make it easy to develop their apps and get them onto devices and the network. I assume he’s talking about efforts such as AT&T’s developer outreach and mobile device testing labs.

However, Stephenson wasn’t about to let go of his main point, which is that to make all of this controlled chaos happen on mobile networks, the industry needs spectrum first and foremost, and AT&T needs T-Mobile specifically for this reason. In AT&T’s eyes, the deal will give it immediate access to spectrum in markets where it is tapped out and will also propel it to cover more of rural America (and invest $8 billion more in the network as part of transitioning T-Mobile’s network to a Long Term Evolution Network).

Beyond that, Stephenson called for “an environment of sustained investment,” in the network. To do that, he said the industry needs “the right tax policy and a regulatory environment that is conducive to this type of investment.” I had hoped for a bit more on actual innovations and insights into how AT&T might offer services on top of its new networks, or manage the amazing onslaught of mobile applications, but instead I got a reprise of Stephenson’s testimony in Washington D.C last week and a veiled call for government handouts. Ma Bell is singing the same old song.

  1. ATT acquiring T-Mo does not increase the total spectrum available for use by consumers, it only increases ATT’s share of the spectrum that is available. Of course they will be able to offer more service to their customers, but the gain will be offset by the loss of T-Mobile service.

    ATT talks about how they will invest $8 billion, some of which will go towards transitioning T-Mo to LTE, but they don’t say how much T-Mo would be spending anyway, without the acquisition. My guess is it would be as much, if not more, than ATT, as ATT is frugal when it comes to investment in high speed infrastructure.

    This acquisition must not be allowed.

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    1. Ken,come on, you must be a worker bee – with knowledge, choices and business plans never equals frugal. Apps and Mobile devices are the drivers – as in the real world – traffic cames before creating improving the highway.

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  2. They need the towers. T-Mo is in the worst position spectrum wise of the big 4 so this doesn’t add spectrum.

    I agree the merger should be denied.

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  3. Stacey: did an AT&T truck run over your dog? It seems like everytime you mention AT&T, you’re slamming them for something. Talk about singing the same old song . . .

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    1. AT&T should be open for attacks if they want to be the sole providers of all the data usage. It is right there in black and white. Randall says usage is going to grow and need spectrum. They cry hardship. He fails to point out is that other carriers have subscribers as well that will be using their own data on their carrier of choice. Randall speaks as though everyone will be ATT subscribers. T-Mobile’s added spectrum will only extend to an additional 1% of wireless consumers. This is classic ATT from as far back as the 80’s. Wireless consumers should not fall for this rhetorical propoganda.

      John B.

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      1. John B, wow you have a limited memory for history, plus attempting to reach back to the 80’s – please try to catch up – AT&T, should be open for attacks, cry hardship: an American Carrier, with 125 years of good history, regulated by our FED, taking significant risk in business and capital – all for the whim of Mobile Devices Manufactures and the APPS (post ’80s term) Applications showing up in the sandbox overnite, sucking up capacity and clogging bandwidth. 2011

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  4. Good read . Yeah it is definitely a power grab. A move that would definitely give AT&T future price control . I wonder which members of the FCC will go to work for AT&T after this merger passes . I also wonder how long after the merger AT&T will fight the FCC on roaming charges . Just a really powerful position AT&T will be in .

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  5. Why is having 3 operators instead of 4 or five making us use the spectrum better? Dividing the spectrum over multiple operators have nothing tp do with capacity improvements and everything to do with competition.

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    1. Mikael, this is a big boys business – it is not as simple as you lay it out. American Business: is you are either #1 or #2: otherwise grab a niche, or get out of the game. Just the cost to participate: FED Gov Regs, investment in Spectrum, and then the cost of an intelligent network/backbone, tower tech evolution – is just the obvious – People with forsight, talent and skill: know how is constant.

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  6. Randall needs to stay away from the podium. Each time he speaks of ATT’s needs, his amway sales tactics disappoint me. I find it rather insulting that ATT holds out a salvation army bucket in front of us while they already have a crap load of spectrum stockpiled in a shed untouched. Why don’t they just spend the 39 billion to build on the unused spectrum they acquired from past auctions? Wouldn’t that be more logical than hoarding every last drop of spectrum to snuff out current and incoming competition?

    John B.

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