Analyst: AT&T needs to spend $5 billion to catch up to Verizon’s coverage

Apple Online Store“AT&T would need to spend about US$5 billion on its wireless network to catch up with the coverage offered by Verizon Wireless, a financial research firm said Tuesday,” Stephen Lawson reports for IDG News Service.

“The public’s perception of AT&T’s network is poor and declining, apparently because of real shortcomings when compared with Verizon Wireless and Sprint Nextel, said Gerard Hallaren, director of research at TownHall Investment Research,” Lawson reports. “The company hosted a conference call about AT&T for investors in conjunction with WJB Capital Group. TownHall announced it has reduced its rating of AT&T from ‘Favorable’ to ‘Neutral.'”

Lawson reports, “The second-largest U.S. mobile operator has been buoyed by its exclusive deal to sell the popular Apple iPhone — an edge that is expected to disappear soon — but has been shortchanging its wireless infrastructure at the expense of its wired network, Hallaren said. ‘It has a choice to spend or suffer,’ Hallaren said.”

“AT&T has already done some things right, he added. Moving the 3G service to its longer range 850MHz radio band in the San Francisco area seems to have helped coverage there, and the company will probably take that strategy nationwide while testing coverage in specific areas and ‘surgically’ increasing capacity, Hallaren said. As one of the world’s largest GSM carriers, AT&T is also well positioned to roll out LTE (Long-Term Evolution), which is designed to deliver higher speeds more efficiently, and should do it soon, he said,” Lawson reports. “AT&T has said it will begin to introduce LTE next year.”

Much more in the full article here.

[Thanks to MacDailyNews Reader “James W.” for the heads up.]

26 Comments

  1. Too many analysts report outside their area of expertise. This is a classic example of a gin rummy player taking on a champion chess player.

    For the past 4 years ATT has been spending on average $15 Billion per year fleshing out its infrastructure WHERE PEOPLE ACTUALLY LIVE AND WORK. Matching Verizon’s coverage (jackrabbits and the occasional hermit) isn’t a smart move.

    What is smart is continuing to build the fastest network for 97% of the US population. That means more towers (doing that) and increasing the backbone (which is wired stupid) between towers and regional hubs.

  2. As long as we’re discussing coverage in specific areas, let me say that driving the major highways in northeast Washington and north Idaho I have no problem with service. Where I don’t get service Verizon doesn’t either (mountainous areas).

  3. They’re going to need to spend more than that. It’s not like Verizon is sitting still waiting for ATT to catch up. Verizon works to improve their network everyday. And they’ll have their 4G LTE network up in major cities and surrounding exurbs and suburbs while ATT is still dicking around with 3G.

    In essence, saying ATT needs a certain amount to catch up with Verizon is like creating some artificial number with which Microsoft needs to invest in R&D;to catch up with Apple (even though R&D;money doesn’t equal creativity and innovation but analysts probably think it does). It’s premised on hitting an immovable target when in fact that target is never resting.

  4. But they don’t seem to be working on the backbone. They are trying to add more towers and shift the freq lower (850MHz) to penetrate buildings. Will the antenna and rf sections in the towers handle the 700MHz they are going to use for LTE? And if so, are they really going to turn off things to bring LTE online? If not, how are they better prepared? They already said they don’t have the backbone and that is the part that will take the hit. Does this article make any sense with regard to LTE prep?

  5. @Gregg Thurman: AT&T;and their awful, awful coverage is the sole reason I don’t currently own an iPhone. Perception is reality in this case. People want their reception to work where “jackrabbits and the occasional hermit” live. Once ATT loses the iPhone, they’re going to take a very well-deserved hit.

  6. There is no reason for AT&T;, being the money-grubbing losers that they are, to spend ten cents upgrading their network as long as they continue to hold iPhone users captive.

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