Project VIP is on track and will deliver multiple benefits to AT&T as its wireless and wireline networks become more tightly integrated, said John Donovan, Senior Executive Vice President - AT&T Technology & Network Operations, speaking at the Citi Global Internet, Media & Telecommunications Conference on January 9th.
Objectives of the three year Project VIP include:
Densification of the wireless grid through multiple technology deployments, including 10,000+ new macro sites, 1,000+ distributed antenna systems, and 40,000+ small cells. Over half of the densification will come from small cells.
Extending the wireline broadband network to 57 million homes. Donovan spoke of a 100 Mbps ceiling for residential services as achievable in many locations.
Extending fiber to many more business locations. The target is for 1 million more customer locations in 3 years.
With Project VIP, Donovan said he is most excited about the integration between AT&T's wireline and wireless networks. Packets are much more efficiently carried on the ground network than through the air. Fiber endpoints will drive small cell backhaul, reducing the need for new macro sites.
Donovan noted that AT&T achieved many network objectives in 2012, including bringing its LTE network to 170 million POPs and its HSPA+ network to 288 million POPs. The number of dropped calls on the AT&T network improved by 32% in 2012 over 2011. Ethernet backhaul is now carrying 90% of mobile data
AT&T's work on cell site architecture is paying off in two areas: providing a seamless experience between LTE and HSPA+, and ensuring that only one radio is drawing handset power. The company plans to bring LTE to 300 million POPs by end of 2014.
Regarding the recent agreement with Akamai, Donovan said deal was driven by the rapid pace of the content distribution business. The partnership with Akamai combines their ability to move at the pace of the market with the scale of the AT&T network.
An archived webcast of the presentation is on the AT&T Investor relations web page.
- On November 7, 2012, AT&T unveiled Project Velocity IP (VIP) -- its plan to invest $14 billion over the next three years to significantly expand and enhance its wireless and wireline IP broadband network. The plan adds $8 billion for wireless initiatives and $6 billion for wireline initiatives. It also makes a distinction between areas where the company believes are better served wirelessly rather the through a traditional copper network or deploying a fiber infrastructure.
- Total capital spending is now expected to be approximately $22 billion for each of next three years. The company said a stronger balance sheet has provided it the financial footing to invest. AT&T is also increasing its quarterly dividend 2.3 percent and is predicting EPS will grow by mid-single digits for the next 3 years with opportunity for stronger growth going forward.
- The Project VIP plan includes an upgrade for U-verse to speeds of up to 75Mbps and for U-verse IPDSLAM to speeds of up to 45Mbps, with a path to deliver even higher speeds in the future.
- In the 25 percent of AT&T's wireline customer locations where it's currently not economically feasible to build a competitive IP wireline network, the company said it will utilize its expanding 4G LTE wireless network -- as it becomes available -- to offer voice and high-speed IP Internet services. The company's 4G LTE network will cover 99 percent of all in-region customer locations. AT&T's 4G LTE network offers speeds competitive with, if not higher than, what is available on wired broadband networks today.