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AT&T announced that it has chosen Alcatel-Lucent and Ericsson as the equipment suppliers for its planned LTE (Long-Term Evolution) mobile broadband network.
The companies have worked together on AT&T’s 3G network, and in a Feb. 10 announcement of the decision, AT&T explained that the existing relationship will enable it to take full advantage of the compatibility between the suppliers’ 3G equipment and the LTE upgrades.
The decision is a boon to both suppliers, as they compete for similar contracts around the world. (In December, carrier TeliaSonera, with Ericsson, launched the world’s first LTE network in Stockholm, Sweden.) AT&T declined to offer financial terms of the agreement, though Reuters reports that constructing the LTE network could cost $1.78 billion over first 12 months.
LTE, a 4G technology, is next generation of AT&T’s GSM/UMTS mobile broadband platform. On Jan. 5, the carrier announced that it had completed an upgrade to HSPA 7.2 software across its 3G network – a necessary move in the transition to LTE, which it plans to begin rolling out in 2011.
While competitor Verizon has said it will roll out its LTE network later this year, AT&T has waited to time the rollout with a selection of devices that can take advantage of the upgraded network’s speeds.
“AT&T has a key advantage in that LTE is an evolution of the existing GSM family of technologies that powers our network and the vast majority of the world’s global wireless infrastructure today,” John Stankey, AT&T president and CEO, said in a statement. “As some competitors move away from their existing investment in niche 3G platforms, we are able to efficiently and quickly move toward LTE while enhancing our existing 3G performance and providing access to a strong ecosystem of customer devices.”
AT&T currently offers 10 HSPA 7.2-compatible devices – such as the LG Electronics eXpo – that can take advantage of faster speeds as they become available.
As part of the agreement with Alcatel-Lucent and Ericsson, AT&T named the two domain suppliers for its Radio Access Network Domain, enlisting them in a multi-year agreement that covers radio access network equipment needed for the LTE service. Additionally, in September, it launched a Domain Supplier program, which, in part, is designed to help accelerate the process of turning its investments into a well-equipped network.
As the exclusive U.S. provider of the Apple iPhone, AT&T has at times struggled to sustain service levels in high-traffic areas, and the carrier reports that it supports twice as many smartphones customers as its nearest competitor. Over the past three years, it says its mobile broadband traffic has grown more than 5,000 percent.
“With this important step, AT&T is sending a clear and strong signal about its commitment to the evolution of the broadband wireless networks and to supporting the next generation of mobile applications,” Alcatel-Lucent CEO Ben Verwaayen said in the statement.
“Our ability to work together to meet the demands of a rapidly changing market has been a crucial element in gaining AT&T’s continued confidence,” added Hans Vestberg, president and CEO of Ericsson. “We will work just as hard to secure a smooth rollout of LTE and support AT&T in introducing new consumer and business services moving forward.”