AT&T's coverage woes could cost billions to remedy - analyst

Posted:
in General Discussion edited January 2014
According to one industry analyst, AT&T would need to spend at least $5 billion to equal Verizon's current level of coverage.



The shortfalls of AT&T's wireless network can be attributed to the company's lack of investment in infrastructure, said Gerard Hallaren, director of research at TownHall Investment Research in a conference call Tuesday. AT&T would have to spend between $5 billion to $7 billion in order to equal Verizon's current level of investment.



According to Hallaren, AT&T has benefited greatly from its exclusive iPhone deal with Apple, but this exclusivity is to come to an end this year, most likely in May or June. Verizon is expected to be the next to offer the iPhone, followed by T-Mobile and Sprint.



Although AT&T's wireless business is its "absolute engine of profitability," producing 57 percent of its operating income, over 65 percent of its capital spending goes towards wired infrastructure, said Hallaren.



The returns from AT&Ts U-Verse internet/television/telephony service will not justify the investment, according to Hallaren, and its focus on wired infrastructure has been one of the major factors contributing to AT&T's less than stellar wireless network performance.



AT&T and Verizon have been in an increasingly heated battle for customers. A highly publicized legal battle over Verizon's claims of AT&T's lack of 3G coverage was eventually dropped, but spawned a series of commercials with both sides heavily criticizing the other.



Verizon has parodied Apple's "There's an app for that" slogan by comparing its superior coverage 3G coverage map with AT&T, using the tagline "There's a map for that." And AT&T hired actor Luke Wilson to "set the record straight" on AT&T's coverage and point out areas where AT&T beats Verizon, like the ability to make calls and access data on handsets at the same time.
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Comments

  • Reply 1 of 103
    mactrippermactripper Posts: 1,328member
    Quote:

    AT&T would need to spend at least $5 billion to equal Verizon's current level of coverage.



    And by the time they gone done with it, they would still be behind.



    Guess AT&T likes the smell of Verison's @ss.
  • Reply 2 of 103
    bageljoeybageljoey Posts: 2,004member
    Quote:
    Originally Posted by AppleInsider View Post


    According to industry analysts, AT&T would need to spend at least $5 billion to equal Verizon's current level of coverage.



    The shortfalls of AT&T's wireless network can be attributed to the company's lack of investment in infrastructure, said Gerard Hallaren, director of research at TownHall Investment Research in a conference call Tuesday. AT&T would have to spend between $5 to $7 billion in order to equal Verizon's current level of investment.



    I don't know what this means without mention of the future 4G network.



    Is this simply saying that they would have to invest this much to get AT&T's 3G network equal to Verizon's? How much of that investment would translate into the coming 4G network?
  • Reply 3 of 103
    So does this mean AT&T needs to spend $5-7 billion to match Verizon's level of coverage (opening sentence) or does it mean level of investment? (second paragraph) I'm wondering if the two terms are interchangeable. And what about speed and/or capability?
  • Reply 4 of 103
    This article is ambiguous, at best.
  • Reply 5 of 103
    However, AT&T could always purchase the 4G LTE technology now and implement that since they have to upgrade anyways. Why not do that and one up Verizon at the same time, considering that they will get the iPhone this year, therefore, AT&T loses any compelling competitive advantage.
  • Reply 6 of 103
    john.bjohn.b Posts: 2,742member
    My advice to AT&T would be to STFU and GBTW!
  • Reply 7 of 103
    Quote:
    Originally Posted by Dream787 View Post


    However, AT&T could always purchase the 4G LTE technology now and implement that since they have to upgrade anyways. Why not do that and one up Verizon at the same time, considering that they will get the iPhone this year, therefore, AT&T loses any compelling competitive advantage.



    4G LTE equipment isn't available yet. Maybe that is the plan though. Fill in coverage area when 4G LTE equipment becomes available.
  • Reply 8 of 103
    Quote:
    Originally Posted by Dickprinter View Post


    This article is ambiguous, at best.



    What's ambiguous is calling both Verizon's and AT&T's service 3G. AT&T's service is a much higher level of performance, so they're not even comparable. Verizon's reaches more people, but not as many as the maps lead you to believe since AT&T's is concentrated in high population areas and therefore covers almost as much, i.e., there's not a lot of people living in the Mojave Desert or Grand Canyon! AT&T has spent more than a billion dollars last year to add more towers, speed up existing towers (which is still called 3G - go figure - so Verizon can still claim to be better!) and start 4G construction.
  • Reply 9 of 103
    john.bjohn.b Posts: 2,742member
    Quote:
    Originally Posted by Dream787 View Post


    However, AT&T could always purchase the 4G LTE technology now and implement that since they have to upgrade anyways. Why not do that and one up Verizon at the same time, considering that they will get the iPhone this year, therefore, AT&T loses any compelling competitive advantage.



    The 3G technology that AT&T already has rolled out is significantly faster that anything in Verizon's red map (which has more to do with buying out Alltel than anything Verizon has done).



    I believe the only hurdle to AT&T's 4G LTE rollout is the lack of a commercially deployable product.
  • Reply 10 of 103
    AT&T has had the iPhone all to themselves and didn't take the money to invest in their network. They have a 30 dollar a month iPhone data plan that you can barely (can't use to download, can't use certain apps etc) use even though your paying for it. They nickle and dime you (told me I needed to pay a one time 30 dollar fee to get the 5 dollar a month corporate discount my company get through them when my contract is up in less then 4 months.) to death.



    I won't even go into how lame the Luke Wilson commercials are.



    I hope Verizon does get the iPhone, maybe with all the carriers having it, the plans for it will start to come down.
  • Reply 11 of 103
    Quote:
    Originally Posted by kenburg View Post


    What's ambiguous is calling both Verizon's and AT&T's service 3G. AT&T's service is a much higher level of performance, so they're not even comparable.



    Same as 1.5M DSL and 50 Mbit fiber are both broadband... its a general term, both are within the same order of magnitude and a few mbit here or there isn't much difference in the end.
  • Reply 12 of 103
    solipsismsolipsism Posts: 25,726member
    Quote:
    Originally Posted by Dream787 View Post


    However, AT&T could always purchase the 4G LTE technology now and implement that since they have to upgrade anyways. Why not do that and one up Verizon at the same time, considering that they will get the iPhone this year, therefore, AT&T loses any compelling competitive advantage.



    Because they don?t have to. Verizon and Sprint were running into a dead end with EV-DO. They could have updated to EV-DO Rev. B but that was apparently a pointless stopgap so both ignored it and decided to move to ?4G? technologies. Sprint choose first and chose poorly.



    AT&T and T-Mpbile will move to LTE but HSPA has so much life left in it. They?ve barely even scratched the surface of what they technologies can do. Labeling it ?3G? and ?4G? bare no resemblance of the bandwidth capabilities.
  • Reply 13 of 103
    AT&T sucks.
  • Reply 14 of 103
    Quote:
    Originally Posted by Synergi View Post


    I hope Verizon does get the iPhone, maybe with all the carriers having it, the plans for it will start to come down.



    Unlimited voice and data plans have just come down for both of them, which is important for a lot of people that use their cell phones as their only phone. AT&T had no bandwidth problems until the incredible demand placed by the iPhone. What are all of the Verizon fanboys going to say if Verizon gets the iPhone and it cripples their much slower network?
  • Reply 15 of 103
    davegeedavegee Posts: 2,765member
    Quote:
    Originally Posted by Dickprinter View Post


    This article is ambiguous, at best.



    I'd go as far to say, ambiguous, redundant and old news... \
  • Reply 16 of 103
    davegeedavegee Posts: 2,765member
    Quote:
    Originally Posted by a1cruiser View Post


    AT&T sucks.



    Come off it.. THEY ALL SUCK!



    Just because you think your carrier sucks the least doesn't change the fact that in the end they still suck!
  • Reply 17 of 103
    mstonemstone Posts: 11,510member
    Quote:
    Originally Posted by a1cruiser View Post


    AT&T sucks.



    Great first post. At least you didn't go on an on about it. Welcome back!
  • Reply 18 of 103
    gazoobeegazoobee Posts: 3,754member
    Quote:
    Originally Posted by Synergi View Post


    ... I hope Verizon does get the iPhone, maybe with all the carriers having it, the plans for it will start to come down.



    You'd think that might be the case, but the idea that having multiple companies necessarily leads to competition is one of the myths of capitalist theory really.



    Even though phone carriers "compete," it's also in their best interests not to eat each others lunch. It's not like a pair of duelling hot dog vendors on opposite corners of an intersection.



    In Canada for instance, all five of the major carriers now have the iPhone. The price *didn't* come down when Rogers exclusivity ended, and they all have basically the same price for the iPhone and the contract. The only difference is that you can now walk into an Apple store and buy one for full price because you can use it on any carrier anyway.



    Unless they sense blood in the water, Verizon will offer the iPhone at more or less the same price as AT&T. It's almost guaranteed.
  • Reply 19 of 103
    "The shortfalls of AT&T's wireless network can be attributed to the company's lack of investment in infrastructure, said Gerard Hallaren, director of research at TownHall Investment"



    Holy crap! This guy should call AT&T and let them know.

    I'm so glad somebody has figured out the problem. He should get the Nobel for this.
  • Reply 20 of 103
    Quote:
    Originally Posted by a1cruiser View Post


    AT&T sucks.



    Ya think?



    They have for years- always been rated at the bottom on the barrel. Apple unfortunately had and has their hands tied to contract with them and we get stuck with crippled devices in the US.
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