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

post #1 of 104
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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.
post #2 of 104
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.
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post #3 of 104
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?
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post #4 of 104
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?

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post #5 of 104
This article is ambiguous, at best.

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post #6 of 104
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.
post #7 of 104
My advice to AT&T would be to STFU and GBTW!

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post #8 of 104
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.
post #9 of 104
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.
post #10 of 104
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.

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post #11 of 104
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.
post #12 of 104
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.
post #13 of 104
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 dont 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. Theyve barely even scratched the surface of what they technologies can do. Labeling it 3G and 4G bare no resemblance of the bandwidth capabilities.
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post #14 of 104
AT&T sucks.
post #15 of 104
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?
post #16 of 104
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... \
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post #17 of 104
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!
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post #18 of 104
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!

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post #19 of 104
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.
post #20 of 104
"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.
post #21 of 104
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.
post #22 of 104
Quote:
Originally Posted by kenburg View Post

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?

That's good cell plans are down but the data plan for iPhone is crippled and still 30 a month. I think my highest usage has been less then 300mb a month and thats on the very high end. Its very annoying to want to use a App and you get a message that says something like the App can't be used, no wifi detected. Yea? Well what is my 30 dollar a month data plan for?
post #23 of 104
Quote:
Originally Posted by a1cruiser View Post

AT&T sucks.

But Steve said they were the best and brightest, with more happy customers than any other carrier...

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post #24 of 104
Let's flip the coin. How much do you think verizon has spent on their fiber network. I know they have spent so much capital to build out their fiber network that they have no money to maintain it. At&t does not have that problem. They are building out thier network using their existing infrastructure as well as placing fiber cable for higher bandwidth rates. What's verizon going to do with their so called 4g network at this time. There is no cell phones capable of using the 4g network. Lastly how does this article claim verizon is first up line on the iphone? Apple hasn't committed to building a cdma phone..My thought is tmobile is next up before verizon....
post #25 of 104
Apple has 23 billion on hand. Pay up.
post #26 of 104
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. 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.

Except that if you look at the official speed claims by both carriers --- AT&T promises 700 kbps to 1700 kbps (take the middle at 1200 kbps) and Verizon promises 600 kbps to 1400 kbps (take the middle at 1000 kbps).

And then you look at the Luke Wilson commercial --- where Verizon is so "slow" that you can only download a headless Luke Wilson. That's like getting your MMS 2 seconds faster, purchasing and downloading a song 5 seconds faster.

Quote:
Originally Posted by pacovalaco View Post

Let's flip the coin. How much do you think verizon has spent on their fiber network. I know they have spent so much capital to build out their fiber network that they have no money to maintain it. At&t does not have that problem. They are building out thier network using their existing infrastructure as well as placing fiber cable for higher bandwidth rates. What's verizon going to do with their so called 4g network at this time. There is no cell phones capable of using the 4g network. Lastly how does this article claim verizon is first up line on the iphone? Apple hasn't committed to building a cdma phone..My thought is tmobile is next up before verizon....

BS --- what fiber maintenance problem??? People doing first post should think before joining AI to post garbage.

Don't need to sell cheap iphone data plans when Verizon can sell enterprise 4G datacard plans.
post #27 of 104
Quote:
Originally Posted by kenburg View Post

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?

It's a "relative" comparison --- Verizon's network can go to hell, as long as Verizon sucks less than the other 3 carriers --- Verizon will remain the king of the networks.
post #28 of 104
This is a crap analyst trying to make headlines.

ATT's 3G network covers 97% of total US population. It doesn't matter that the Verizon network provides 3G coverage to hermits and jackrabbits.

Beyond that, for the past 4 years ATT has been spending $15 billion to $20 Billion per year on backbone infrastructure.

Backbone infrastructure is WIRED.

All of this is in preparation of moving to LTE, which is much easier to do from a GSM network than it is from a CDMA network.
post #29 of 104
I was trying to read this article, but somebody's Verizon map kept getting in the way.
post #30 of 104
Quote:
Originally Posted by isaidso View Post

"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.

The thing with Verizon capex is that Verizon Wireless hasn't paid a single cent of dividend to Vodafone in 4-5 years. Vodafone owns 45% of Verizon Wireless but has zero operational control. Verizon is spending Vodafone's money on Verizon Wireless capex.
post #31 of 104
Quote:
Originally Posted by Gregg Thurman View Post

This is a crap analyst trying to make headlines.

ATT's 3G network covers 97% of total US population. It doesn't matter that the Verizon network provides 3G coverage to hermits and jackrabbits.

Beyond that, for the past 4 years ATT has been spending $15 billion to $20 Billion per year on backbone infrastructure.

Backbone infrastructure is WIRED.

All of this is in preparation of moving to LTE, which is much easier to do from a GSM network than it is from a CDMA network.

Nope, AT&T's 3G coverage covers 230 million people (not 97% of the population).

http://news.cnet.com/8301-17852_3-10423404-71.html

Verizon just spent $22 billion on FIOS --- and that's WIRED.

Nope --- Qualcomm is the early leader in the LTE chipset race right now --- which makes transition concerns not really relevant. Also that LTE doesn't have voice component right now --- which is the same setup as ev-do. GSM to LTE transition is going to be harder because voice component hasn't been created yet.
post #32 of 104
Quote:
Originally Posted by samab View Post

Nope --- Qualcomm is the early leader in the LTE chipset race right now --- which makes transition concerns not really relevant. Also that LTE doesn't have voice component right now --- which is the same setup as ev-do. GSM to LTE transition is going to be harder because voice component hasn't been created yet.

Why with all the lies? Qualcomm having patents in 3GPP tech doesnt mean its a simple transition for Verizon and you know it. LTE is a set of enhancements UMTS not to CDMA. This is a much bigger overhaul for CDMA-based networks than it is for 3GSM networks who also have the added bonus of riding 3G for quite a bit longer than CDMA-based networks can.
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post #33 of 104
Don't let you your ego get to you SAMAB. To make your bold statement true then there would be no such thing as dark fiber. Verizon's up front cost to trench, place and splice brand new fiber has put them in a situation that if they needed to work on any fiber issues, they aren't going to have a big expense budget to do so. Off the subject, who do you think provides the majority backhual to verizon's fiber cell sites??? Yup, at&t..Maybe at&t should make the other carriers provide their own fiber local loop connection to thier cell sites themselves..OH wait, they can't afford it.
post #34 of 104
Quote:
Originally Posted by solipsism View Post

Why with all the lies? Qualcomm having patents in 3GPP tech doesnt mean its a simple transition for Verizon and you know it. LTE is a set of enhancements UMTS not to CDMA. This is a much bigger overhaul for CDMA-based networks than it is for 3GSM networks who also have the added bonus of riding 3G for quite a bit longer than CDMA-based networks can.

The GSM-LTE transition will be "easier" on the network side --- but because there is no voice component right now, that advantage is really non-existent.
post #35 of 104
Quote:
Originally Posted by pacovalaco View Post

Don't let you your ego get to you SAMAB. To make your bold statement true then there would be no such thing as dark fiber. Verizon's up front cost to trench, place and splice brand new fiber has put them in a situation that if they needed to work on any fiber issues, they aren't going to have a big expense budget to do so. Off the subject, who do you think provides the majority backhual to verizon's fiber cell sites??? Yup, at&t..Maybe at&t should make the other carriers provide their own fiber local loop connection to thier cell sites themselves..OH wait, they can't afford it.

Why doesn't Verizon have the capex budget to do so?

Verizon has always been the carrier --- who makes a technical decision and then makes big capex spending on it. Verizon was the first American carrier to go 3G nationwide, was the first to spend massively on fiber, is the first to go 4G nationwide.

If what you said about backhaul is true --- then AT&T can only blame themselves. A for-profit company should spend capex where it can earn a lot of money. If AT&T spends their capex budget on backhaul and can't charge Verizon a king's ransom for it --- then it's entirely AT&T's problem.
post #36 of 104
Quote:
Originally Posted by mrkoolaid View Post

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.

Right Teckstud... not any worse than Verizon's past dictatorship of crippling all their phones.
post #37 of 104
In the telco world, it's usually a rule not to be the first becuase you never know the outcome.. hence verizon's first to be the 4g carrier without a cell phone to use it..Don't you think they were betting on a cellphone manufacturer to have a 4g capable phone already? I'm sure the manufacturer promised verizon but obviously haven't delivered... The reason at&t can charge a ransom for it's in place network is called the FCC and thier tariff rules. Please do your research...
post #38 of 104
Quote:
Originally Posted by pacovalaco View Post

In the telco world, it's usually a rule not to be the first becuase you never know the outcome.. hence verizon's first to be the 4g carrier without a cell phone to use it..Don't you think they were betting on a cellphone manufacturer to have a 4g capable phone already? I'm sure the manufacturer promised verizon but obviously haven't delivered... The reason at&t can charge a ransom for it's in place network is called the FCC and thier tariff rules. Please do your research...

Verizon has a long long long track record of making big expensive technology bets and making them work out very profitably.

Verizon was the first American carrier to go 3G nationwide 7-8 years ago --- and for the 2-3 years, didn't even have a 3G phone. What has 4G phones got to do with anything? Verizon can charge premium rates to enterprise datacard users.

If it is such a common knowledge that AT&T can't charge a king's ransom for its backhaul --- then it is AT&T's problem to spend that capex money on these low profit margin stuff.
post #39 of 104
Verizon sucks!

i thought AT&T said that they're already done rolling out 3G?
post #40 of 104
Kenburg- couldn't say it better myself....Wait till the iphone goes on the verizon and other networks..Then the carriers will be on the same playing field...I know At&t will prove to be better and still haven't spent as much capital as verizon..Verizon shot thier wad already...
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