AT&T Network Woes: Company Claims Infrastructure Spending Not the Cause

AT&T investments not the reason behind poor network

Satirist blogger Daniel Lyons' 'Operation Chokehold' did not choke Ma Bell's network after all. 

But this has brought back the focus on how bad the AT&T network is and what the company should be doing in order to improve their service levels. 

One of the main points put forward by Daniel Lyons a.k.a Fake Steve Jobs was that the company's capital expenditures over the past two years has dropped by 30% while the data revenues during the same period has increased by 80%. This is significant because it raises important questions about where the company's revenues are actually going if an increase in data revenues has not resulted in commensurate investments in capital expenditures in order to better the network. 

Folks at The iPhone Blog had raised a similar point recently accusing AT&T of compromising on customer service levels in order to increase the shareholder value – apparently that could be the only reason if revenues from data have inded not been invested back to improve the network. 

Ma Bell has responded to the accusation clarifying that the financial statements from AT&T have been wrongly interpreted. According to the company official who wrote to the website, the CAPEX noted in the financial statement was not of their wireless infrastructure alone, but included a lot of other things including real estate and IT support. The company refused to break the numbers down specifically for the wireless segment citing confidentiality.

Here are more pointers from the communication:

  • 2000 new cell sites were added in 2009.
  • 100,000 new backhaul connections are being added.
  • Wi-Fi network is being extended to over 20,000 hotspots.
  • Close to $18 billion being invested in 2009 for improving wireline and wireless networks.

None of this is exactly new information and we have heard AT&T tell us about their intentions to improve the AT&T infrastructure in the past as well; and we believe in the numbers. But the bigger question is given the 4000% percent increase in data traffic in the past two years, is the investment sufficient? What is to be blamed for the deteriorating AT&T network? Lower investment in infrastructure or the company's slow response to challenges? Or both? 

What do you think? Tell us in the comments.

[via The iPhone Blog]

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