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Analyst Estimates AT&T Needs To Spend $5B To Catch Up

Soulskill posted more than 3 years ago | from the connection-lost dept.

Communications 187

itwbennett writes "The public's perception of AT&T's network is poor and declining, apparently because of real shortcomings when compared with Verizon Wireless and Sprint Nextel,' says Gerard Hallaren, director of research at TownHall Investment Research. 'AT&T's capital expenditures on its wireless network from 2006 through September 2009 totaled about $21.6 billion, compared with $25.4 billion for Verizon and $16 billion for Sprint (including Sprint's investments in WiMax operator Clearwire). Over that time, Verizon has spent far more per subscriber: $353, compared with $308 for AT&T,' Hallaren said. 'Even Sprint has outspent AT&T per subscriber, laying out $310 for network capital expenditure.' All this means AT&T has a choice, says Hallaren: 'spend or suffer.'"

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187 comments

Sprint? (-1, Flamebait)

LordLimecat (1103839) | more than 3 years ago | (#30831642)

Pretty sure nobody needs to catch up with Sprint / Nextel.

Re:Sprint? (1, Interesting)

Logical Zebra (1423045) | more than 3 years ago | (#30831670)

'Even Sprint has outspent AT&T per subscriber, laying out $310 for network capital expenditure.' All this means AT&T has a choice, says Hallaren: 'spend or suffer.'

Or maybe it means that Sprint-Nextel's network was such a steaming pile of crap that they had to outlay an irresponsible amount of capital to bring it up to snuff. Last time I checked, Sprint is losing thousands of customers a week.

Re:Sprint? (5, Informative)

bcong (1125705) | more than 3 years ago | (#30831842)

I've never understood while Sprint get's bashed every time they are compared to other providers. I've been with Sprint for ~10 years and they have always provided me with good service and coverage with reasonable rates. I can not remember the last time I had no service or a call was dropped. Maybe it's because I live in a metro area, but I have nothing bad to say about them.

Re:Sprint? (4, Informative)

GSMacLean (1333075) | more than 3 years ago | (#30832070)

I couldn't agree more. I've been on Sprint for five years. I also can't remember the last time I had a dropped call or no service, and the "everything" plan can't be beat. I talk to the Apple fanboys at work toting their iPhones, and they try to compare who has the least number of dropped calls - they can't believe that I don't have any at all, ever.

Re:Sprint? (2, Informative)

Anonymous Coward | more than 3 years ago | (#30832118)

Sprint purchased/"merged" with Nextel. Nextel has always been the bottom-feeder network when it came to infrastructure. Sure, they are in more places, but that's because they snatched up all the "going under" real estate from failing telco's before they went away. It's a cheap way to build (or have others build) your network, but the quality was inconsistent, in disrepair and only really looked good on paper. The only real reason why Nextel did as well as they did is because they had that all-important "Push To Talk" button, which was a very simple interface for specialized marketplaces. Fleet vehicles, remote staff, servicemen, etc. relied on that feature, so the network was basically a non-consideration as long as it worked "most of the time". Both Sprint and Nextel had very strong and secure reputations in the marketplace, but for VERY different underlying reasons.

Sprint needed to invest quite a lot to upgrade the equipment from Nextel's acquisitions, but now that they have, they have an amazing, demonstrable footprint of coverage. To say that Sprint gets bashed, they bought that reputation honestly through acquiring Nextel. Both companies ultimately benefited from the merger, but it was and is a long and expensive road for them both.

Re:Sprint? (3, Informative)

jra (5600) | more than 3 years ago | (#30832552)

No, let me clarify here.

Nextel's network was *necessarily* built from the ground up, because *it is not Cellular*. It's not licensed as cellular by the FCC. It's on frequencies completely disparate from cellular.

Nextel was created and expanded by buying out Specialized Mobile Radio licensees in the mid 80s, and using their freqs to build what is, effectively, a digital trunking radio system (iDen) with autopatch capabilities.

> Sure, they are in more places, but that's because they snatched up all the "going under" real estate from failing telco's before they went away.

That? Just didn't happen. Nor anything that remotely resembles it.

> Both companies ultimately benefited from the merger, but it was and is a long and expensive road for them both.

And they're not done walking it. While I disagree with you on the technical points of how they came to be, it is in fact the case that they out-expanded themselves, growing their footprint without expanding their backbone to match.

At least, that's my diagnosis, and until someone with facts steps up to contradict me, I'll continue to tell people that.

On reflection, I guess I'm saying they have to take *even more* of the blame for their current state -- and it's not just me; I have 8 customers who've ditched Nextel in the last 10 years; big ones; some 25 radios -- than your "cobbled together from people's leavings" assertion would justify.

Hear hear! (2, Informative)

rutledjw (447990) | more than 3 years ago | (#30832612)

My service was always good on them as well. The issue came when I was laid off and when I started contracting I needed my own smart phone and coincidentally my personal phone died. At the time I was less than impressed with Sprint's offerings (about 1.5 years ago). And this is a personal thing - I hate Blackberry's...

Anyway, I bit the bullet and bought an iPhone. In the Financial District in downtown SF I couldn't make a call consistently much less anything else! I was livid.

To make matters worse, my work gave me a Blackberry. A SPRINT Blackberry, and it had better coverage in SF, Denver, and DC. sigh...Unreal.

I still can't believe I pay MORE to AT&T for this honor...

Re:Sprint? (1)

QuijiboIsAWord (715586) | more than 3 years ago | (#30832724)

I also recently switched to sprint and I've been really satisfied with their service. I got an unlimited data plan for a lower price than anyone else, and they had 3G in my town while AT&T still doesn't. I'd prefer to be on a GSM network, but theres absolutely no tangible difference to my day to day use. Their customer support has been pretty decent, but that might be because I'm working through a corporate account rather than a normal one.

Re:Sprint? (1)

BloodSpite (751523) | more than 3 years ago | (#30833216)

Technologically speaking Spring is well behind the times in their actual communication equipment. Touted as "CDMA 2001" most of Sprint systems are old Ericcson/Qualcom BTS systems that have not been in production in over. Unfortunately that's the cost of doing business when you outsource your entire network to a supplier. They have expanded a few BTS sites in the major city areas to the Nokia CMDA system, but other upgrades to my knowledge have not taken place. Not to say they haven't, I just don't know about them. GSM, CDMA, UMTS upgrades are what I do for a living. I've been working in Tennessee for the last year installing new UMTS sites for AT&T meanwhile we have not seen a job for Sprint since late 2003. Which by the way, the UMTS systems used by AT&T? Made by Ericcson. Sprints largest problem came is after the Nextel merger they were blindsided by the cost to upgrade Nextels network as well as their own. Thus what happens is when a upgrade takes place for them, 8 times out of 10 its on a old Nextel site to bring it half way to where the sprint locations were at the merger or it's upgrading a pre-existing Sprint location to generate revenue to do the former. Coverage wise, they still are not competitive. While they do cover most metropolitan areas and cities, their rural coverage puts them in to much lower end of the spectrum in the "big dog" carrier competition.

Re:Sprint? (4, Informative)

LWATCDR (28044) | more than 3 years ago | (#30831884)

Have you used the Sprint network lately?
My guess is that you have not.
Sprint used to be bashed because of customer support and rightly so but they have made a lot of effort to improve in that area.
Sprint used to have a not great selection of phones. Right now they have a few really good phones like the Blackberry Tour, the Samsung Moment, the HTC Hero, the Palm Pre, and Palm Pixie.
Their prices are cheaper than Verizon and AT&T and the didn't cripple their phones like Verizon did as far as Bluetooth, WiFI, and even loading software.
They are CDMA which is a downer if you are going to travel outside the US but so is Verizon.
Oh and you get to roam on the Verizon network. I have never been without service on my phone for more than five minutes anywhere in the US.
I would say that unless you MUST have an iPhone or you really want a Droid that Sprint is a really good choice.
The crappy old Sprint has been gone for a while but then you will find people that hate every carrier.

Re:Sprint? (0)

QuantumRiff (120817) | more than 3 years ago | (#30832182)

Forgot to mention that Sprints unlimited plan is much less than other providers, even still, and they have had it for a year.. (nice of ATT and Verizion to have Unlimted talk and data, but not text!)

The Only reason I left Sprint was because the house I was renting had no coverage. It was in the middle of a depression, out in the boonies, so it was understandable.. I went with USCellular, a much smaller company (#6) but they have free incoming calls and texts. But, they have no data network really, and old, not as fun phones.. which I'm fine with.

Re:Sprint? (0)

Anonymous Coward | more than 3 years ago | (#30832638)

I have unlimited texting with ATT and have for at least two years. What are you talking about?

Re:Sprint? (1)

TheKidWho (705796) | more than 3 years ago | (#30832820)

Yes, and you pay how much for it?

I pay $69.99 for my Palm Pre's plan with unlimited data/texting and unlimited mobile-mobile(Carrier agnostic) and 450 minutes for landlines.

Re:Sprint? (1)

Logical Zebra (1423045) | more than 3 years ago | (#30832190)

You will also find people who will defend any carrier.

I saved so much money by switching to AT&T that it was actually cost-effective to pay Sprint's early termination fees. Plus, I no longer have to deal with them screwing up my bill every other month.

You say Sprint's customer service has changed, and that's great. But you couldn't pay me to ever use them again. Plus, the iPhone, IMO, is a much better phone than all of the Sprint phones you listed.

What??? (2, Interesting)

rutledjw (447990) | more than 3 years ago | (#30832736)

Really? How in the world did you find a Sprint plan costing more that AT&T using the iPhone? Especially when the Sprint "everything" plan is $99/month? That's quite a feat...

You can say Sprint's customer service sucks, and yes, lots of folks had issues there. But as far as cost of plans go, I'm by NO means on the high end AT&T plan, and I'm nowhere near my Sprint bills...

Re:What??? (1)

SvnLyrBrto (62138) | more than 3 years ago | (#30833346)

When I switched from Sprint to Pacific Bell (which later became part of Cingular which later became part of SBC which later became part of AT&T); I went from paying $70/month to $40/month, got about 4x the airtime, and got a phone that would actually keep working if I ventured into the East Bay or more than a couple of miles from the freeway on the peninsula. That and my bill was finally charged correctly and consistently and I didn't have to deal with Sprint's appalling idea of customer service anymore.

Granted, this was well before the iPhone. And after years and years of hemorrhaging customers they've gotten desperate and slashed their rates below most of the other carriers. But they used to be a stupendous ripoff... playing the "we give you lots of ANYTIME minutes" game, when the gobs and gobs of night and weekend minutes I got when I switched were (and still are) much more useful to me.

And yeah... their customer service sucks... even AFTER you've cancelled your service (And six months later they decide you owe them some 10-cent fee and start sending you past-due notices that cost them more in postage than they're trying to collect.).

Re:Sprint? (1)

LWATCDR (28044) | more than 3 years ago | (#30833444)

I would love to see what plane you got. Not one for the iPhone for sure.
The iPhone is a very good phone with lots of very good apps. I have an iPod touch and a Samsung Moment. My wife has a Palm Pre so I have access to an Apple device, Palm Pre, and Android.
Apple has a better app store than any of them.
The Pre I feel actually has a better UI than the iPhone and the cards are really nice. The new SDK really seems to have opened up the possibilities on the Pre so I expect to see it doing really well. The Pre has a keyboard and a lot of people really like that.
Android is good, the app store is better than the Pre's but there is too many versions of Android right now. Everybody really needs to get up on 2.1 and Google really needs to add multitouch to the softkeyboard and browser.

Re:Sprint? (3, Interesting)

GooberToo (74388) | more than 3 years ago | (#30832386)

My big complaint with Sprint is cross carrier SMS and MMS. Everyone I know finds Sprint extremely unreliable about sending or receiving anything which comes from or goes to Sprint's network. I've literally waited an hour for text message to appear on the phone next to me. They also seem to drop a huge number of messages; again, cross carrier. At one point, I'd guess perhaps as high as 80% drop rate - though that high is not what I'd call typical.

I don't know if other carriers are purposely causing problems for Sprint or if Sprint is purposely causing problems for other carriers, or they are just well beyond their capacity. But, unless things improve and you SMS or MMS heavily with people on other carriers, I could never recommend Sprint.

Also, one last note, Verizon has not crippled any Android phone features. While Verizon has a terrible history here, thus far they've been true to their word on Android. Now hopefully Verizon's upcoming Android 2.1 update will fix various bugs and incompatibilities vs every other Android phone available. If not, then I'd recommend people staying away from Android+Verizon.

Re:Sprint? (1)

msgyrd (891916) | more than 3 years ago | (#30832848)

I don't know why Sprint is hemorrhaging customers, just go to the various sites and compare plans and prices. Verizon is a better network but often 40% more expensive for equal services (and Sprint gets to piggyback for free if needed), T-Mobile is close but not quite as good, and AT&T is currently considerably worse in all respects except offering the iPhone.

Unless you're an international traveler, refuse to use subsidized phones, or obsessed with the iPhone, Sprint is the clear winner.

Re:Sprint? (0)

Anonymous Coward | more than 3 years ago | (#30832004)

But Sprint has plenty of 3G coverage where ATT doesn't. The real America, you know the one between either left coast.

Re:Sprint? (1)

jra (5600) | more than 3 years ago | (#30831682)

Wait; what? You mean all that "Those people in Operation Chokehold are just blowing blue smoke out their ass; we're just as good as the other guys" press releasing was just *posturing*?

Say it ain't *so*, Joe!

In fact, while Nextel's *coverage* sucks in the Tampa market, their customer service has come *way* up, and I say that having been a customer 10 years now.

Re:Sprint? (1)

jra (5600) | more than 3 years ago | (#30831994)

And I find I want to clarify, in case there are any Nextel engineers reading this (and understand, I'm diagnosing as someone whose done it for TCP networks for 15 years)..

The problem isn't *RF Coverage*; I have good signal almost everywhere.

But that doesn't keep me from dropping calls to "Service Conflict" or "Out of Dispatch Coverage", or just plain not being able to hold a conversation because the backbone gets confused; I can talk to my partner, but he can't talk to me because I'm "busy in DC".

Yup. Talking to him.

And don't even get me started on "The Nextel subscriber you're trying to reach is being located."

And this isn't my phone; it's happened to me on my present 8350i, but also the 7100i, i730, i95, and i1000plus that it replaced, in various guises.

As good as Sprint's CS has gotten, I cannot *wait* for Verizontal to deploy 700LTE, and for RIM to make a (PTT capable, preferably PTToC) handset for it. Or, for HTC to make a Nexus One with a PTT button, and decent high-audio.

I don't get it (1)

Maury Markowitz (452832) | more than 3 years ago | (#30831684)

Bell and Telus collectively spent about $1 billion rolling out 7.2 Mbps GSM across Canada, and did it in about one year. Canada is larger than the US, and has 1/10th the population. That means it costs a lot more to provide bandwidth on a per-person basis. Backhaul links are less available as well, further increasing difficulties.

So why is this going to cost AT&T 5 times as much, especially when they already have the towers and the problem is (apparently) backhaul - which is cheap.

What am I missing here?

Maury

Re:I don't get it (2, Insightful)

Anonymous Coward | more than 3 years ago | (#30831768)

Bell and Telus collectively spent about $1 billion rolling out 7.2 Mbps GSM across Canada, and did it in about one year. Canada is larger than the US, and has 1/10th the population. That means it costs a lot more to provide bandwidth on a per-person basis. Backhaul links are less available as well, further increasing difficulties.

So why is this going to cost AT&T 5 times as much, especially when they already have the towers and the problem is (apparently) backhaul - which is cheap.

What am I missing here?

Maury

Canada's people tend to be compressed into a band hugging the U.S. -- so your "Canada is larger than the US" doesn't quite fit. I doubt Bell or Telus has service on Ellesmere Island

Re:I don't get it (0)

Anonymous Coward | more than 3 years ago | (#30831786)

1. AT&T let the US wireless service fall behind and they didn't put money into it - they concentrated on their land line stuff.

2. Bell and Telus collectively spent about $1 billion ... - notice the collectively. It wouldn't surprise me if Telus paid most of it.

3. Things are worse here in the States, therefore they have to spend more money.

Re:I don't get it (1)

0racle (667029) | more than 3 years ago | (#30831948)

Well you're missing that 90% of Canada's population lives within 300 miles of the US boarder. So they didn't have to (finally) upgrade their network over all of Canada. I also doubt that they rolled it out to ever part of the small part of Canada they have to either.

Re:I don't get it (1)

maxume (22995) | more than 3 years ago | (#30831968)

Canada's population is pretty lumpy, so I'm not sure the infrastructure costs per subscriber are hugely different, and presumably, the U.S. providers have to service about 10 times as many people (or maybe 6 times as many, depending on the assumptions you make about redundancy).

Re:I don't get it (0)

Anonymous Coward | more than 3 years ago | (#30832008)

"handful of cities along the US border" != "across Canada"

If 99% of your population lives in 5 cities, it's pretty easy to give "everyone" cell phone coverage.

Re:I don't get it (1)

Shatrat (855151) | more than 3 years ago | (#30832268)

AT&T doesn't like to go outside the company for backhaul, now that it has a wireless company and a transport company under one roof.
As their old transport contracts are expiring they are rolling those circuits onto their own network.
They are focusing on cost savings this way instead of spending their efforts on bringing new cell sites online.

Re:I don't get it (0)

Anonymous Coward | more than 3 years ago | (#30832800)

They aren't passing those savings onto the consumer...

I really don't see how they can get away with charging the same as Verizon, especially for data. I've been with all the carriers other than T-mobile in the last 5 years, and I consider ATT to be the worst value of the 4.

Buh bye AT&T, enjoy history's dust bin (2, Interesting)

Anonymous Coward | more than 3 years ago | (#30831710)

AT&T's little game a while back where they decided that they were going to blame and overcharge iPhone users for their problems pretty much guaranteed I won't be looking into AT&T for service any time soon. I think the iPhone is a silly and largely pointless thing, like most Apple products, but that was just ridiculous.

"Oh gee, we sold a whole bunch of phones that are built to be and advertised as mobile media platforms, let's blame the users of those phones using them as mobile media platforms for all our network's problems".

Okay, AT&T. Lemme know how that works for you.

Re:Buh bye AT&T, enjoy history's dust bin (0, Troll)

afidel (530433) | more than 3 years ago | (#30832892)

Besides that with ~9M iPhone subscribers they are pulling in over $630M per MONTH meaning even if the $5B figure is right they have to spend less than 8 months revenue from just the iPhone to upgrade their network that they have neglected for years.

efficiency (3, Funny)

drougie (36782) | more than 3 years ago | (#30831718)

These numbers are misleading. AT&T doesn't need to spend as much money to be as productive in infrastructure expansion as its CDMA competitors because their engineers can talk and surf at the same time.

Re:efficiency (4, Funny)

elrous0 (869638) | more than 3 years ago | (#30832094)

I'll tell you what my grandfather said on his deathbed 20 years ago. "Kid," he said. "Never trust a Wilson brother to give you advice on your telecommunications needs." I've heeded those words ever since.

Re:efficiency (1)

Creepy (93888) | more than 3 years ago | (#30832902)

Talk and surf can be done on any GSM network, not just AT&T - lack of it on Verizon networks is a byproduct of CDMA technology. CDMA itself has bad spectral efficiency and is essentially being killed off in the 3GPP and 4G, so I expect Verizon and Sprint will need to extend or replace it. That said, AT&T's data rates are pretty shoddy according to my brother - he likes T-Mobile better (I don't have a data plan, so I have no idea).

Re:efficiency (2, Informative)

nbvb (32836) | more than 3 years ago | (#30833064)

It's the other way around.

CDMA's air interface is quite efficient, actually.

So efficient, in fact, that the 3GPP's 4G standard (you know, LTE, Long-Term Evolution) is much, much more CDMA-like than TDMA-based GSM. (CDMA and LTE are both spread-spectrum technologies -- GSM/TDMA divide signals on a carrier frequency based on timing.)

Keep in mind that the cdmaOne product family is what's not being evolved any further --- the actual air interfaces developed under the CDMA banner are really the path forward. What's being 'killed off' is the TDMA-type technology that underpins GSM.

Re:efficiency (0)

Anonymous Coward | more than 3 years ago | (#30833200)

The spectral efficiency of CDMA technology is just fine. If not, why would it have been chosen for all 3G implementations? It's for other reasons that LTE uses OFDMA.

$45 is "far more"?? (1)

bagboy (630125) | more than 3 years ago | (#30831752)

Seriously, that is far more?

Re:$45 is "far more"?? (0)

Anonymous Coward | more than 3 years ago | (#30831812)

It's almost 15% more. And, when you include fixed costs, and consider that Verizon's subscriber base is significantly larger... yes. It's 'far more'.

Re:$45 is "far more"?? (0)

Anonymous Coward | more than 3 years ago | (#30831860)

No - it's just more. Far more would be significant. 15 percent is what you leave for a tip.

Re:$45 is "far more"?? (1)

Dynedain (141758) | more than 3 years ago | (#30832378)

That's almost 15% more, per subscriber

I know I'd consider a 15% raise a pretty big one.

Re:$45 is "far more"?? (1)

stonefry (968479) | more than 3 years ago | (#30832830)

15% more per subscriber = 15% more

Why emphasize that it's per subscriber?

Re:$45 is "far more"?? (0)

Anonymous Coward | more than 3 years ago | (#30833416)

It could be 30% more for half of the subscribers. duh

Re:$45 is "far more"?? (0)

Anonymous Coward | more than 3 years ago | (#30832702)

Seriously, that is far more?

If there were only 1 or 100 subscribers I'd agree with you but putting it into context and relatively speaking, yeah, $45 per subscriber with millions of subscribers... yeah, that's a LOT.

Maybe you're filthy rich and to you this is pennies but to me... that's a LOT do money.

Re:$45 is "far more"?? (0)

Anonymous Coward | more than 3 years ago | (#30833060)

So, I paid them $2400 ($50 * 12 months * 4 years) and their network expenses were in the $300 range? The phone might have been $300.

It sounds like once they have the 4G network up an can live without changing it for 30 years, we would see a drop in monthly prices if competition worked in corp America.

Wasted research... (1)

Zantac69 (1331461) | more than 3 years ago | (#30831794)

Most AT&T users could tell you that AT&T really needs to get their shit together. No need for expensive research.

Personally, I am with AT&T now because:
1 - I had to have a GSM phone (CDMA FTL!)
2 - T-Mobile's covereage sucks where I live in Atlanta (or at least it did 18 months ago)

I am pissed and dont have much of a choice - its MaBell of Tmob. Not much is out there that would drive me to the shackles of CDMA hell with BigRed.

Re:Wasted research... (1)

i_ate_god (899684) | more than 3 years ago | (#30831930)

Most AT&T users could tell you that AT&T really needs to get their shit together. No need for expensive research.

Personally, I am with AT&T now because:
1 - I had to have a GSM phone (CDMA FTL!)
2 - T-Mobile's covereage sucks where I live in Atlanta (or at least it did 18 months ago)

I am pissed and dont have much of a choice - its MaBell of Tmob. Not much is out there that would drive me to the shackles of CDMA hell with BigRed.

If CDMA is faster than light, then why did you go with AT&T?

Re:Wasted research... (1)

NotBornYesterday (1093817) | more than 3 years ago | (#30832104)

Because the FTL technology requires a transmitter [slashdot.org] with one of the universe's highest SAR ratings.

That, and the fact that the FTL causes temporal distortion, meaning that the person you talk to via FTL hears you speak before you say anything. We've all regretted saying things a split second after saying them. FTL CDMA means you might end up saying something you shouldn't have even before you say it.

Re:Wasted research... (1)

tepples (727027) | more than 3 years ago | (#30832536)

If CDMA is faster than light, then why did you go with AT&T?

Because when you rearrange the letters, it spells Digital Millennium Copyright Act.

Re:Wasted research... (1)

QuantumRiff (120817) | more than 3 years ago | (#30832204)

I'm kinda interested in whats going to happen when both ATT and Verizon go to LTE.. That could get very, very interesting..

Re:Wasted research... (1)

caladine (1290184) | more than 3 years ago | (#30832672)

1 - I had to have a GSM phone (CDMA FTL!)

I personally find this hilarious on two counts:
1.) GSM and EDGE are TDMA technologies that are inferior in every way to the CDMA waveform.
2.) Your 3G service through AT&T is based off of CDMA. (All GSM carriers use W-CDMA for 3G service. See also #1.)

Re:Wasted research... (1)

radish (98371) | more than 3 years ago | (#30833034)

1.) GSM and EDGE are TDMA technologies that are inferior in every way to the CDMA waveform.

Except the whole international roaming thing. And that's a pretty significant "way".

Re:Wasted research... (1)

nbvb (32836) | more than 3 years ago | (#30833134)

.. of course, a phone with dual radios such as the BlackBerry Storm, Samsung Saga, HTC Ozone, HTC Touch Pro2, etc. will work anywhere. My BB Storm works here in the US, in Europe, in the Caribbean, just about everywhere ...

They got lazy and slothful (1)

TheHawke (237817) | more than 3 years ago | (#30831854)

They rested on their laurels with the iPhone along with retarding their capital expenditures to beef up their stock price when earnings season rolled around. They are paying for that dearly now with major issues with infrastructure and bandwidth issues.

Major mistake, playing to the stockholders instead of their customers.

Re:They got lazy and slothful (1)

cob666 (656740) | more than 3 years ago | (#30832130)

Because they have a fiscal responsibility to the shareholders, customers are just a revenue stream.

Re:They got lazy and slothful (3, Insightful)

SydShamino (547793) | more than 3 years ago | (#30832624)

They have a fiscal responsibility to their long-term shareholders, too, not just those looking to cash out after a few quarters of artificial pumping.

Re:They got lazy and slothful (0)

Anonymous Coward | more than 3 years ago | (#30833324)

Completely off-topic but...your sig caught my eye. I think that quote (Do What Thou Wilt) is rightfully attributed to Francois Rabelais...

Re:They got lazy and slothful (1)

Dare nMc (468959) | more than 3 years ago | (#30833214)

I do wonder how much of this is Apples fault. Apple forced AT&T to spend on updating their voice-mail system so that it would be search-able, and other make it look cool features. Apple also siphons off a bunch of the per user revenue of customer they bring in, and bringing in a bandwidth hog onto the network. Had apple chosen to tell AT&T what bandwidth to have instead of what shiny features to have, then the customers would have been happier with AT&T, but the iPhone wouldn't have been the cool thing. So Apple may have forced AT&T to take all the blame, and can soon leave them with all the stink when the exclusive contract is up, but that doesn't mean they weren't to blame.

Re:They got lazy and slothful (1)

ArhcAngel (247594) | more than 3 years ago | (#30833406)

Major mistake, playing to the stockholders instead of their customers.

Major mistake, playing to the customers instead of their mobile subscribers.

FTFY

Obligatory car analogy:

3 lane highway with several hundred cars == mild congestion

same 3 lane highway with several thousand cars, buses, 18 wheelers == #!$^WTF@#$%

biznatCh (-1, Offtopic)

Anonymous Coward | more than 3 years ago | (#30831892)

vitality. L1kE an

Of course they need money to upgrade their network (0)

Anonymous Coward | more than 3 years ago | (#30831928)

...they spend most of their budget on wiretapping for the NSA!

The analyst must not be an MBA (2, Insightful)

drainbramage (588291) | more than 3 years ago | (#30831956)

I suspect AT&T feels that those numbers represent a cost per subscriber rather than an investment per subscriber.
Now how about a big round of executive bonus...

They're spending all right... (1)

dasunst3r (947970) | more than 3 years ago | (#30831958)

... on Luke Wilson. My solution to public perception issue? Less on marketing and more on infrastructure upgrades and support (engineering, equipment, installation, customer support, etc.). I strongly believe that beyond an initial marketing push, if a product is truly good, it can sell itself.

Re:They're spending all right... (1)

elrous0 (869638) | more than 3 years ago | (#30832264)

And if you're going to spend so much on a PR campaign, at least spring for Owen.

Re:They're spending all right... (4, Insightful)

jc42 (318812) | more than 3 years ago | (#30832370)

I strongly believe that beyond an initial marketing push, if a product is truly good, it can sell itself.

Well, we do have the computer field as a major counterexample. The best-selling computer system for a long time has been MS Windows, which has always been the crappiest product available. They're a prime example of an old business guideline: The best way to be a major vendor is to have the biggest advertising budget. If you have that, there's no point on paying extra money to have a good product, because it won't get you a significant increase in sales. Only a tiny part of the market understands how to judge quality, and you can safely leave those sales to the small companies that will never be large.

Of course, the telephone business has long worked on a different basis. Their business plan has always been to make deals with governmental authorities to get a local monopoly wherever possible. Then quality doesn't matter because the regulators will guarantee that you always have a profit and no competitors.

At present, there is a small amount of competition allowed in the recently-developed wireless phone market. But this is only a temporary situation. The phone companies are hard at work on mergers and acquisitions, plus "campaign contributions" to reestablish regulated local monopolies. So we can expect that fairly soon they'll be back to their normal non-competitive situation. AT&T's only real problem is management that hasn't heard about the competitive market. But this is only a temporary situation.

"We're the Phone Company. We don't care. We don't have to."

Re:They're spending all right... (0)

Anonymous Coward | more than 3 years ago | (#30832738)

Verizon has truly slapped AT&T in the face with the map ads. The weak response by AT&T with Luke Wilson is laughable at best. The commercials are truly pathetic. Great...you can talk and surf the web with AT&T as long as you are within the tiny limited 3G coverage area. Know what.....fuck you Luke! Join your brother and attempt suicide.

Stockholders will make it painful (1)

Coopjust (872796) | more than 3 years ago | (#30832024)

After resting on the success of the iPhones and what they had, AT&T now has to spend the money to catch up.

Expect the majority of shareholders, who are ridiculously short sighted, to hate AT&T for it and decry it as a waste of money, just like how all the Verizon stockholders were whining about the investment per household for FiOS.

Goodbye AT$T (1)

wooferhound (546132) | more than 3 years ago | (#30832026)

AT$T just keeps getting worse and worse. They were overcharging me a lot 10 years ago and I changed my service to Bellsouth and I was so much happier. Then AT$T bought Bellsouth and so I unhappily had AT$T again. Deciding to give them another chance I stayed with them. But then came the unexplained fees and hugely overcharging me for $899 for long distance service that should have been less than $20. So at the beginning of this year I discontinued their service again for a Cable phone service that is great and $10 less a month.

I will never again let AT$T into my life !!

I would call to complain (4, Funny)

elrous0 (869638) | more than 3 years ago | (#30832050)

But my iPhone would probably just drop the call.

Re:I would call to complain (0)

Anonymous Coward | more than 3 years ago | (#30832834)

The problem with AT&T at the moment is it is facing an expensive fight on two fronts concurrently.

On the one hand, it needs to update its infrastructure to support the ever increasing bandwidth
consumption of the wireless market. It's not going to get any better, so they're going to have to
start upgrading it instead of wishing for a magic fix that will make it all right.

On the other, they're trying to compete in the video market at the same time with their U-Verse
rollout. Every DIME is being poured into that project because it is one of two areas that will provide
them with income for the foreseeable future. Video and Wireless are it. Landlines are on the decline
and the numbers are growing exponentially. Soon, it will be rare to see anyone with a dedicated land
line for phone use. Thus, the urgency to shift their income maker over to something that isn't on its
deathbed.

Since the company unlikely has the capitol to pay for both at the same time, they're in a pickle of
sorts. They need to get them both upgraded and rolled out as quickly as possible, but the lack of
available cash is keeping that from becoming a reality. The company already has cut as many
expenses as they can ( short of executive pay and bonus of course ) but it isn't enough.

It's my opinion they are going to have to pick one or the other for the immediate future and deal with
the fallout. It's a pretty good case for the " You can't have your cake and eat it too " argument.

Re:I would call to complain (1)

cheesybagel (670288) | more than 3 years ago | (#30833474)

Landlines are still very useful for data services. It so happens that voice is just another data stream. It is treated differently merely for historical reasons.

There are some niceties in the traditional telephone model. Running on the power of the telephone line itself meant it was more resilient to disasters than a VOIP phone. But I guess we have mobile phones for that. Err... providing the battery does not run out.

Why not wait? (0)

Anonymous Coward | more than 3 years ago | (#30832066)

Why bother with doing 3G only?

Why not wait and deploy the next generation and 3G at the same time?

If your going to do all that work and visit all those sites, it would make more sense to LEAPFROG Verizon and the other carriers while your at it.

Follow the money (1)

jimicus (737525) | more than 3 years ago | (#30832160)

OK, who paid for this and what's in it for them? I've yet to see a piece of so-called "business research" of this nature which was produced with no ulterior motive.

The most obvious thoughts that spring to mind are:

  • AT&T paid for it. They want an excuse to be able to add another "extra" onto the bill of all their customers (or get a government subsidy).
  • Verizon paid for it. They want to be able to say "Don't use AT&T, their network is obsolete and they can't afford to upgrade it".

Any others?

Re:Follow the money (2, Interesting)

swb (14022) | more than 3 years ago | (#30832664)

What I found strange about the "story", which incidentally, I also thought read like a successfully placed bit of corporate propaganda, is that AT&T is currently running commercials that capitalize on their data network being faster than Verizon's, and IIRC there have recently (last 3-6 months) been multiple stories from multiple sources (Engadget/Gizmodo, some cellular research company) that have BOTH released the same results -- AT&T's data network is faster than Verizon's.

My own personal datapoint as a customer who switched from Verizon to AT&T in the last 9 months is that I get *better* coverage with AT&T in my primary area (Twin Cities), fewer dead spots and the data service on my iPhone is faster than it was on my Motorola Q on Verizon.

My complaints about AT&T are really centered on the coverage in rural areas of MN and North Dakota -- I'm lucky if I get a solid 1x, many no service areas, and wifi is needed for any data services you'd normally expect to use on 3G. But I think that whole area is pretty much Alltel territory and nobody uses anything but Alltel up there. Verizon roams there just fine and there's decent EVDO coverage in many places AT&T wheezes on a weak 1x signal.

Fiber/T1s? (0)

Anonymous Coward | more than 3 years ago | (#30832250)

Screw wireless, AT&T's wired backbone is by far the worst in the world. Their Manilla tech support is probably the worst that I've ever spoken to. No one has a good wireless network. I wait all day on Verizon too...they should fix the infrastructure and their business model first before blowing all of that money on their network. They still have the iPhone...neat.

I read this as $58 (0)

Anonymous Coward | more than 3 years ago | (#30832288)

and wondered what the problem was

Between Verizon and AT&T (1)

Pojut (1027544) | more than 3 years ago | (#30832404)

I chose Verizon. There is no point in having a fast network or browsing while calling if I can't freakin' connect to the network.

I'm quite happy with my HTC Ozone and having at least two bars reception no matter where I am, even in the elevators at work.

We have seen this game before. (2, Insightful)

Steauengeglase (512315) | more than 3 years ago | (#30832532)

When this becomes a more serious problem they will beg/demand/get massive tax breaks and claim that it will go to infrastructure building. Then they will pass the majority to their stock holders. If anyone complains and suggests regulation concerning either the tax breaks (outside of suggesting more tax breaks) or how the additional revenue should be spent will be branded a socialist and an enemy of capitalism.

We saw this under both Clinton and Bush and we will see it again under Obama, because there is one simple fact that no one in government can understand. You cannot bribe businesses. You can sign contracts where they provide a service for a price, you can enforce current legislation and if you are willing to waste the time you can write new legislation, but you will never get anything done with bribery (ie. tax cuts).

Website needs clue injection to catch up (3, Funny)

argent (18001) | more than 3 years ago | (#30832560)

<title>Analyst: AT&amp;amp;T needs to spend US$5B to catch up | ITworld</title>

That title is so &amped it goes to 11.

AT&T spend or suffer? (1)

BigSlowTarget (325940) | more than 3 years ago | (#30832626)

I think it's clearly spend or make your customers suffer and there's plenty of evidence which way they'll probably go.

considering the 3g maps (1)

C_Kode (102755) | more than 3 years ago | (#30832676)

If you look at the differences in the US 3G coverage maps shown in the Verizon commercials, I think $5B is freaking cheap!

Re:considering the 3g maps (0, Flamebait)

slimjim8094 (941042) | more than 3 years ago | (#30833430)

Those are wrong, or at least misleading. AT&T's 2G (called EDGE, 2-300kbps) is as fast as Verizon's 3G. And AT&T has EDGE coverage across it's whole area.

AT&T's 3g coverage (shown in the map) is HSDPA. That's up to theoretically 20mbps, but I've seen real-world speeds of 3mbps/300kbps.

Long story short, Verizon's comparing gold to tin, and poo-pooing AT&T because there's less gold than tin.

if wishes were horses (1)

fermion (181285) | more than 3 years ago | (#30832766)

Then simply looking at per subscriber spending would be a valid metric. That way the vendors could buy as much blow as they wanted for the acquisition department and then bill it through higher bids.

As it is, verizon is no longer the absolute leader. Sprint, ATT, even some of the small guys like boost and cricket have competitive products. All verizon can say is they have the premium product, and use the higher fees to maintain the premium product.

I suspect the issue is not spending, but the free space in cell towers and new cell towers, which I understand are not as easy to set, since everyone wants a cell phone, but no one wants a tower in the neighborhood. In places like NYC I can imagine that just finding real estate, much less real estate that one is allowed to attach to, is a major issue. It seems like at 15-25 billion, everyone is spending as much as they possible can.

Re:if wishes were horses (0)

Anonymous Coward | more than 3 years ago | (#30833020)

As it is, verizon is no longer the absolute leader. Sprint, ATT, even some of the small guys like boost and cricket have competitive products. All verizon can say is they have the premium product, and use the higher fees to maintain the premium product.

Boost: Owned by Sprint
In addition, Boost Mobile, Sprint's prepaid business, is being refocused to compete aggressively for customers impacted by the current economic environment with a lower per-minute rate and other attractive pricing options. [sprint.com]

Cricket: Partnered with Verizon
"Inter-carrier agreements such as that between Cricket and Verizon Wireless are necessary for seamless picture messaging interoperability across the country," said Jim Straight, vice president of wireless Internet and multimedia for Verizon Wireless. [mycricket.com]

cheaper by a dozen (1)

slonik (108174) | more than 3 years ago | (#30832770)

I do not think that $ by $ comparison is valid here.
Actually, GSM networking equipment for AT&T's network is cheaper to buy that similar CDMA equipment that Verizon and Sprint uses. GSM market is sooo much larger than CDMA so that the economy of scale plays nicely here. You might get further with 21B$ upgrading your GSM network than with 25B$ for CDMA.

Analyst? Needs to be fired... (0)

Anonymous Coward | more than 3 years ago | (#30832920)

AT&T has over 80 million wireless subscribers. They made $3.6 billion in the third quarter from wireless alone. They are doing fine.

AT&T's real choice (0)

Anonymous Coward | more than 3 years ago | (#30833276)

Naive:

All this means AT&T has a choice, says Hallaren: 'spend or suffer'.

Correct:

All this means AT&T has a choice, says Hallaren: 'spend or collude with "competitors" to ensure they have as much time as they need to catch up (because after all, if a silly matter like technical prowess can beat ONE big company, it could very well beat the others, too, so they have a vested interest in making sure this doesn't happen until they're ready for it) and lobby congress for legal assistance to keep anyone new from taking advantage of this situation'.

So which one's cheaper?

700 Mhz anyone? (2, Interesting)

sneakyimp (1161443) | more than 3 years ago | (#30833468)

So whatever happened to the much-ballyhooed 700 Mhz spectrum? Didn't AT&T & verizon both invest in that bit? So far I haven't seen hide nor hair of any 700mhz devices nor any announcements about wireless service using this spectrum.

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