AT&T (s 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 (s vz). 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 (s aapl) 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 (s S) and Clearwire’s (s clwr) WiMAX network and T-Mobile’s HSPA+ network next year and beyond.
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