A few days ago I reported on Verizon Wireless and its plans to start deploying its 4G LTE service to 30 cities in the United States by the end of 2010. Recently, I also talked about T-Mobile’s interest in either investing in Sprint’s Clear 4G WiMax system or simply buying Sprint with Deutsche Telekom. T-Mobile has also been readying an LTE launch that probably won’t happen until early next year, although the parent company is already in the process of deploying LTE in Europe.
So where’s AT&T in all of these plans? Apparently still struggling to support all of those iPhones and iPads it’s been selling. One thing that AT&T failed to anticipate when it got the exclusive deal from Apple to sell those devices is just how popular its 3G service would be.
Once it found out that the appetite for 3G data by iPhones and iPads was basically insatiable, it was already behind the power curve in deploying 3G. As a result, iPhone owners complained about poor connections for data, they found that they sometimes couldn’t even get a data connection, and even when they could, the quality was frequently poor.
This isn’t the best way for a wireless company to win friends, so AT&T did what it had to do. It raised its rates for 3G. This had two effects: One was to get users to be a little more moderate in their thirst for data, and the other was to raise more money if they just kept on sucking down those bits. That extra money was a good thing because it helped AT&T raise the money to pay for more 3G expansion.
Problem is, all of that 3G expansion means that AT&T doesn’t have the kind of resources it needs to deploy 4G. It will still happen eventually, of course, but it won’t be as soon as it will be for the other wireless carriers. In fact, it looks like it’ll be about a year before AT&T is able to deploy any of its LTE 4G network, and even by the end of 2011 it’ll only be able to serve about 75 million customers, a much smaller number than Verizon Wireless will have by the end of 2010.
ATandTs Inaction Opens Opportunities for Verizon, T-Mobile
AT&T. of course, isn’t admitting that it’s overwhelmed by the popularity of the iPhone and the other 3G devices it’s selling. The statements by AT&T executives refer instead to the company’s desire to let the market mature before taking the 4G plunge.
There’s actually something to be said for not being the first to move into a new technology. Sprint was the first into the 4G fray, and it’s already finding out that WiMax isn’t necessarily the best star to hang its 4G hat on.
T-Mobile, meanwhile, is hedging its bets on 4G by working on an LTE network while also trying to buy into an existing WiMax network. Fortunately, a series of new 4G chips from Beceem and others makes it possible to roam seamlessly between WiMax and LTE, assuming you have device radios that support the required frequencies.
AT&T, meanwhile, is still building out its 3G network so that it can keep up with demand from all of those iPhone and iPad users. That demand will ease slightly after the beginning of 2011 when Verizon Wireless gets the iPhone, but it certainly won’t go away. AT&T still needs to build enough capacity to serve its existing iPhone customers adequately, and simply slowing the rate of growth isn’t going to help all that much.
AT&T’s late LTE blooming leaves room for all sorts of speculation. Perhaps Verizon Wireless will introduce the iPhone with 4G capability, giving it lots of bandwidth and very low latency, which will no doubt delight iPhone users. This could have a lot to do with why Verizon Wireless won’t be shipping its iPhone until the beginning of 2011-just after its first 30 LTE cities light up.
T-Mobile, which will have finished building out its very high-speed HSPA+ network by the end of the year, is rumored to be introducing the iPhone in November, 2010. Both Verizon Wireless and T-Mobile, along with Sprint, which already has 4G, have announced versions of Samsung’s new Galaxy S Tablet, which will need those fast networks.
AT&T is still selling the iPad. None of this means that the iPhone and the iPad killed 4G for AT&T, but it sure helps explain why that company is so late getting a 4G option for its network. As is the case with any infrastructure-heavy company, there’s only so much you can do at one time.