The problems with the AT&T network is well known and documented. According to Gerard Halleren, the director of research at TownHall Investment Research, the reason behind the network woes is not just because of the exponential growth in data usage, but also because the company has "shortchanged" its wireless infrastructure at the expense of its wired network.
At a conference call hosted by his firm, Hallaren alleged that AT&T's capital expenditure on wireless networks from 2006 to Q3 2009 totalled $21.6 billion. In comparison, Verizon spent $25.4 billion on its wireless network while Sprint spent $16 billion in this time period. Hallaren argued that the per subscriber spending by AT&T was just $308 compared to $310 spent by Sprint and $353 spent by Verizon.
Hallaren's arguments make even more sense when he compares "income vs. expenditure" on AT&T's wired and wireless networks. Hallaren pointed out that AT&T earns 57% of it operating income from wireless network though it only spent 34% on its capital expenditure. In contrast, 65% of the company's capital expenditure was on wired network though the segment only contributed to 35% of the operating income.
Hallaren's claims, which are based on AT&T's regulatory filings make logical sense. However, AT&T has disputed the validity of the findings claiming Hallaren's statements do not reveal the complete picture.
According to a statement from AT&T spokesperson McCall Butler, Hallaren's study has failed to take into account spectrum purchases and acquisitions that AT&T made during this period in order to build its mobile infrastructure. Butler claims that the company spent $19 billion on wireless infrastructure in just the fifteen months in 2008 and Q1 2009.
Elaborating further on AT&T's investments, Butler says a chunk of investments also go into backhaul - the wired networks that carry the traffic from the wireless networks; something that is not depicted specifically as a wireless investment in the filings.
The two sides have posted compelling arguments, which make us sit back and ponder upon the ground realities. It is to be noted that while a lot of our readers have indeed complained about their AT&T network, a good number of them have also written in to say that they are happy customers. Even third party studies have been inconclusive. While Consumer Reports painted a poor picture of AT&T, another test conducted by Gizmodo pointed to a network that was better than its competitors.
Which side of the argument between Hallaren and AT&T will you take? Post your views in the comments.
[via MacWorld]
First…..
i told you that long time ago.att does not want to spend money because ceos want
all the money .but once verizion will have the iphone att will out of business.
Well yeah, they've got U-verse to worry about, and since bundling services is the "way of the future," they're trying to get U-verse service out to everyone as fast as possible so that more potential customers can get all their media services through AT&T. And fiber is expensive.
Not justifying their decision in spending money the way they did, but I can easily see why it's the case.
I have been a happy customer with AT&T for over 5 years. I live in a small town of around 70 thousand and we have had 3G service for about 2 years or more now. My calls never fail, I never have poor call quality or reception and data speeds constistenly top 1.5mbps.
However, I live about 2 hours away from the bay and each time I get into the heart of SF my service is spotty at best, and im forced to switch to EGDE unless i want to constantnly switch back and forth to 3G.