Leaked AT&T filing shows full LTE coverage would cost additional $3.8B
According to an accidentally leaked letter from AT&T, the company estimates that expanding 4G LTE coverage from its original plan of 80 percent of the population to 97 percent of Americans would cost $3.8 billion.
The partially redacted letter appeared briefly on the Federal Communications Commission website on Friday before being taken down, as reported by Wireless Week. AT&T reportedly indicated in the letter, which was posted by the company's law firm, that carrying through on its pledge to provide LTE service to 55 million rural Americans would require $3.8 billion in additional capital expenditures.
Executives from both T-Mobile and AT&T have touted expanded 4G coverage as one of the key consumer benefits to the $39 billion merger. According to the letter, the deal would help AT&T to ?better absorb the increased capital investment and lower returns associated with deploying LTE to over 97 percent of the U.S. population.?
Providing coverage to the extra 17 percent of the population would require nearly tripling the land mass covered by the network. AT&T's original plan reached 80 percent of the U.S. with just 20 percent of the country's land mass, but providing LTE to 97 percent of Americans would require covering 55 percent of the land mass in the U.S.
According to the ex parte document, AT&T plans to upgrade 44,000 nodes to LTE over the next two years: 8,000 nodes this year, 16,000 nodes next year and 20,000 nodes in 2013. Providing the additional coverage as promised reportedly involves 18,000 cell sites.
AT&T has moved up its plans for LTE deployment by a year and plans to have the network "largely complete" by the end of 2013. The company plans to reach 70 million customers with 4G service by the end of this year.
Meanwhile, rival Verizon has almost a year-long head start with LTE. The carrier launched its 4G network in 38 markets, covering 110 million people, last December. It plans to reach nationwide coverage by 2013.
AT&T responded to the leak by claiming that any confidential information contained within agrees with the company's prior statements.
?There is no real news here,? said spokeswoman Margaret Boles. ?The confidential information in the latest letter is fully consistent with AT&T?s prior filings. It demonstrates the significance of our commitment to build out 4G LTE mobile broadband to 97% of the population following our merger with T-Mobile. Without this merger, AT&T could not make this expanded commitment. This merger will unleash billions of dollars in badly needed investment, creating many thousands of well-paying jobs that are vitally needed given our weakened economy.?
However, the letter has been taken by some to be damaging to AT&T's argument that its proposed acquisition of T-Mobile is vital to its expansion to rural markets. Critics have questioned why a $3.8 billion expansion requires an acquisition more than ten times the size.
For its part, competing carrier Sprint has cast doubt on AT&T's claim that the T-Mobile merger would help provide LTE coverage to 97 percent of U.S. residents. "We do not believe this merger facilitates that goal, but even if it did -- at what cost? Is it worth removing a competitor?" Sprint CEO Dan Hesse said during a Senate hearing in May.
AT&T announced its deal with T-Mobile in March. Antitrust reviews of the merger are expected to take about a year. The carrier has reportedly hired bankers to help facilitate the possible sale of assets should it be required to divest customers or spectrum to win regulatory approval.
The partially redacted letter appeared briefly on the Federal Communications Commission website on Friday before being taken down, as reported by Wireless Week. AT&T reportedly indicated in the letter, which was posted by the company's law firm, that carrying through on its pledge to provide LTE service to 55 million rural Americans would require $3.8 billion in additional capital expenditures.
Executives from both T-Mobile and AT&T have touted expanded 4G coverage as one of the key consumer benefits to the $39 billion merger. According to the letter, the deal would help AT&T to ?better absorb the increased capital investment and lower returns associated with deploying LTE to over 97 percent of the U.S. population.?
Providing coverage to the extra 17 percent of the population would require nearly tripling the land mass covered by the network. AT&T's original plan reached 80 percent of the U.S. with just 20 percent of the country's land mass, but providing LTE to 97 percent of Americans would require covering 55 percent of the land mass in the U.S.
According to the ex parte document, AT&T plans to upgrade 44,000 nodes to LTE over the next two years: 8,000 nodes this year, 16,000 nodes next year and 20,000 nodes in 2013. Providing the additional coverage as promised reportedly involves 18,000 cell sites.
AT&T has moved up its plans for LTE deployment by a year and plans to have the network "largely complete" by the end of 2013. The company plans to reach 70 million customers with 4G service by the end of this year.
Meanwhile, rival Verizon has almost a year-long head start with LTE. The carrier launched its 4G network in 38 markets, covering 110 million people, last December. It plans to reach nationwide coverage by 2013.
AT&T responded to the leak by claiming that any confidential information contained within agrees with the company's prior statements.
?There is no real news here,? said spokeswoman Margaret Boles. ?The confidential information in the latest letter is fully consistent with AT&T?s prior filings. It demonstrates the significance of our commitment to build out 4G LTE mobile broadband to 97% of the population following our merger with T-Mobile. Without this merger, AT&T could not make this expanded commitment. This merger will unleash billions of dollars in badly needed investment, creating many thousands of well-paying jobs that are vitally needed given our weakened economy.?
However, the letter has been taken by some to be damaging to AT&T's argument that its proposed acquisition of T-Mobile is vital to its expansion to rural markets. Critics have questioned why a $3.8 billion expansion requires an acquisition more than ten times the size.
For its part, competing carrier Sprint has cast doubt on AT&T's claim that the T-Mobile merger would help provide LTE coverage to 97 percent of U.S. residents. "We do not believe this merger facilitates that goal, but even if it did -- at what cost? Is it worth removing a competitor?" Sprint CEO Dan Hesse said during a Senate hearing in May.
AT&T announced its deal with T-Mobile in March. Antitrust reviews of the merger are expected to take about a year. The carrier has reportedly hired bankers to help facilitate the possible sale of assets should it be required to divest customers or spectrum to win regulatory approval.
Comments
According to an accidentally leaked letter from AT&T, the company estimates that expanding 4G LTE coverage from its original plan of 80 percent of the population to 97 percent of Americans would cost $3.8 billion.
What does this have to do with Apple? They will not have a 4G phone for a long, long time. Heck, the first iPhone wasn't even 3G, and it changed the whole industry.
We don't need no stinking 4G.
What does this have to do with Apple? .
Yeah, I don't get it either.
Is it going to be "REAL" LTE or the bastardized "4G" that they are marketing? None of the 4G phones will work in Europe or anywhere else in the world as 4G.
I was wondering the same thing. From what I can tell it's the later. Companies love to lock you in to their system.
Innovation is created by the manufacturers, not the carriers. Eliminating one competitor will lead to less innovation.
What does this have to do with Apple? They will not have a 4G phone for a long, long time. Heck, the first iPhone wasn't even 3G, and it changed the whole industry.
We don't need no stinking 4G.
Me hopes that T-Mobile will get the iPhone so Deutsche Telekom will think twice about selling T-Mobile USA again when this merger gets turned down.
Yes, I am waiting for iPhone5 on T-Mobile - their 49.99 unlimited plan per phone is a killer. My 2 year contract with ATT expires in 2 weeks.
Yes, I am waiting for iPhone5 on T-Mobile - their 49.99 unlimited plan per phone is a killer. My 2 year contract with ATT expires in 2 weeks.
You can't seriously believe that T-Mobile will ever offer that plan for a single iphone.
Me hopes that T-Mobile will get the iPhone so Deutsche Telekom will think twice about selling T-Mobile USA again when this merger gets turned down.
Merger won't get turned down.
What does this have to do with Apple? ...
Yeah, I don't get it either.
You guys are like people who read The New York Times and wonder what a story about the European debt crisis has to do with New York.
It has something to do with every hardware manufacturer. If people don't start complaining real loud, AT&T is about to possess enormous power over every hardware manufacturer. If Apple or another manufacturer doesn't like AT&T's terms, AT&T will easily be able to say, fine go somewhere else. Apple's only choices will be Sprint and Verizon (not exactly a hardware manufacturer or consumer friendly company).
I don't think T-Mobile really adds or subtracts much from this very weak argument.
Innovation is created by the manufacturers, not the carriers. Eliminating one competitor will lead to less innovation.
If this is true, then why would eliminating T-Mobile (a carrier) lead to less innovation?
Say what you mean and mean what you say! If you don't know what you are saying then don't bother saying it.
I don't think T-Mobile really adds or subtracts much from this very weak argument.
If this is true, then why would eliminating T-Mobile (a carrier) lead to less innovation?
Say what you mean and mean what you say! If you don't know what you are saying then don't bother saying it.
It's not the phone itself it's the technology of the cell network. Instead of 4 major carries you will have 2 and a much smaller 3rd. Att and Verizon pretty much match each other on price and sometimes match price increases (data limits). If the merger is approved I can probably bet that Verizon and ATT will raise prices to pay for this "improved" network and magically their prices will just match each other while Sprint will undercut them but they still haven't made money in quite a while so I'm not sure how much longer Sprint will be around
Me hopes that T-Mobile will get the iPhone so Deutsche Telekom will think twice about selling T-Mobile USA again when this merger gets turned down.
I seriously doubt this merger will get turned down. Even if AT&T takes T-Mobile lock, stock, and barrel, the combination is still less than 50% of the market.
The only thing I think is up in the air is what AT&T/T-Mobile may be forced to sell. Despite the network compatibility issue, this has to be the only reason Sprint is making any noise about this merger. Normally, a company has no problem seeing their competitor list shrink from three to two. Sprint's rants are all about what they can acquire from a merged AT&T/T-Mobile, IMHO.
Me hopes that T-Mobile will get the iPhone so Deutsche Telekom will think twice about selling T-Mobile USA again when this merger gets turned down.
DT has pretty much said they will be selling T-Mobile USA to someone or shutting it down. So if the ATT merger goes through you can expect Sprint to try again.
As for T-Mobile getting the iPhone, given the spectrum differences with the 3g issue, I wouldn't count on it. Unless of course the merger goes through and T-Mobiles new phones are put on ATT's service for 3g
Well that demolishes AT&T's case for the merger.
How so?
How so?
He's holding on to the false hope that our government isn't 100% corrupt and hadn't already assured AT&T that their huge payoffs would make the merger would go through months before AT&T even announced it.
You guys are like people who read The New York Times and wonder what a story about the European debt crisis has to do with New York.
Is it because there are Greek immigrants living in NYC?
Is it because there are Greek immigrants living in NYC?
Or people from NYC living in Greece. Remember it wasn't the greeks that came up with the money schemes it was Goldman Sachs.
On a related note, 3.8 Billion is nothing. Basically a joke for ATT. Their Net Income was 20 billion in 2010 alone. They just want to milk existing technology for as long as possible. And just think if our government never went into Iraq (or at least had some allies going in) we could have built 4G 100 times over every year for the last 8 years or so with that kind of money.