Wednesday, September 15, 2010

AT&T Looks to LTE Opportunities in Enterprise and Consumer

There are tremendous opportunities popping up in both the consumer and enterprise sectors thanks to the mobilization of broadband, said John Stankey, President & CEO of AT&T Business Solutions, speaking at Bank of America Merrill Lynch's 2010 Media, Communications & Entertainment Conference.

He confirmed the mobile data traffic surge on the AT&T network: 5,000% wireless data increase over the past 3 years, 30 million 3G devices now on the network, average smartphone usage up 40% this year. Meanwhile, wireless data revenue is up 27% this year. A significant turning point for the industry occurred, he said, when AT&T changed its pricing structure from flat fee to account for actual mobile usage.


Some notes from the presentation:

  • AT&T is making significant improvements to its network infrastructure whether measured in the number of new cell sites, expansion of the 3G footprint or new backhaul capacity. The network is still strained in a number of geographic markets but Stankey said the company is working hard to fix this issues with additional towers, carriers or Wi-Fi, but one of the constraining factors has been the time it takes to work with landlords and municipalities.


  • There has been a $2 billion increase in wireless CAPEX this year.


  • AT&T has seen some supplier shortages. The company said the backlog has grown to $300 million in equipment that it wants deployed right now but which is not yet available from suppliers.


  • An aggressive upgrade of the backhaul program.


  • AT&T wants to enter the LTE market at the "sweet spot", when the device and the network are both ready for a solid customer experience.


  • LTE tests are underway in Dallas and Baltimore.


  • AT&T will continue to upgrade its 3G network with faster HSPA and HSPA+.


  • AT&T is pursuing a Service Delivery Approach, offering APIs that let enterprise developers build applications that leverage is core network and its cloud computing infrastructure. In the consumer space, the company's U-verse Mobile application is an example of an application that ties into the infrastructure and into the cloud.


  • LTE will be as much about Enterprises as well as Consumers. The key to this will be extending wireline enterprise VPNS into the LTE network. This will mobilize enterprise applications. The LTE network is being designed to integrate with the company's enterprise services.


  • Another initiative is to improve the company's cost structure by unifying product sets and simplifying the customer experience.
http://www.att.com/gen/investor-relations?pid=5647

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