Meeting the Challenges of
The Mobile Broadband Age

Posted by: Joan Marsh on April 14, 2011 at 2:26 pm

A few weeks ago, AT&T announced an agreement to acquire T-Mobile USA.  While some people were surprised by the announcement, the main reason for the deal was obvious to anyone who has been following the rapid growth of the wireless industry – we need more capacity to address the surging demand for mobile broadband.  

AT&T’s wireless broadband networks continue to carry a tremendous amount of data traffic. You’ve heard the stats: wireless data traffic on our network is up over 8000% in the last four years and we anticipate it will be 8 to 10 times greater by 2015. The surest, fastest and most efficient path by far to addressing the capacity limitations we face in the near term is to acquire T-Mobile and its highly complementary spectrum portfolio and network assets.  It was the deal hiding in plain sight.  

The result of the combination will be extraordinary: the denser network of cell sites will drive capacity improvements and speed gains; spectral efficiencies will be gained by the combinations of two 2G networks into one,  including less spectrum used for call set up and control, and more opportunities to migrate bands to support mobile broadband services. 

The T-Mobile spectrum holdings will also give us a more robust spectrum footprint for LTE deployment, which will benefit directly many rural and under-served communities that risked being left behind in this country’s migration to the broadband future.  In fact, this additional spectrum, when combined with added scale and other resources, will enable AT&T to expand its LTE deployment plan in pretty dramatic fashion. 

But while this deal will mean better service, fewer dropped calls, and a more robust and ubiquitous wireless broadband infrastructure, I can’t emphasize enough that this deal does not solve the longer term wireless broadband spectrum shortage faced by the industry. As Chairman Genachowski noted earlier this week, one market transaction is not going to address the spectrum crunch the entire industry is grappling with.  The T-Mobile deal will allow us to drive significant network and spectrum efficiencies into the two companies’ existing asset portfolios, but current spectrum assets alone will not always be sufficient to accommodate the industry-wide tidal wave of mobile data traffic on the horizon.  On that score, the industry’s work has only just begun. 

The same urgencies that drove the T-Mobile transaction will keep our longer-term efforts focused on the spectrum goals outlined in the National Broadband Plan.  Our support for the plan and the reallocation of 500 MHz of additional spectrum for the wireless broadband industry has not changed.    

The work underway by the FCC to address rational spectrum reallocation is critical to the industry’s long-term economic growth and vibrancy.  And we will continue to work for enactment of spectrum reform legislation, including incentive auction authority for the FCC.  More flexible auction authority is an essential tool that will help ensure that spectrum can be efficiently reallocated to its best and highest use. 

The T-Mobile deal will allow us to use our current spectrum assets most efficiently in the near term, driving capacity gains on our networks and supporting a deep mobile broadband deployment.  But only new spectrum allocations will define how effectively the industry will meet the challenges of the mobile broadband future.  We remain firmly committed to the spectrum goals of the National Broadband Plan and will continue to work toward achieving them.

Comments (2)

Alas, the main reason for the deal – contrary to what is stated above – is that government policies pushed Deutsche Telekom to sell. Deutsche Telekom took a long hard look at the regulatory climate in the United States – created by telecommunications law and the FCC – and decided that it could better invest its capital elsewhere. One can hardly blame it! There’s no “network neutrality” regulation in Europe; it’s easier for a competitor to get spectrum when one needs it (AT&T has quite a bit, but T-Mobile had to fight for scraps); and backhaul pricing is fairer. In short, we can thank Uncle Sam for DT’s decision to throw in the towel.

Brett Glass April 14, 2011 at 5:07 pm

Actually we need Network Neutrality rules of nondiscrimination to preserve the openness of the Internet and stop it from being controlled by corporate gatekeepers. The allowed re-merger of AT&T with SBC Communications and Bell South was a mistake and a bad policy move by the FCC and the DOJ — allowing them to reconstitute Ma Bell. Instead they should mandate increased competition — now too much regulation is bad for any market but so is a lack of any regulation. When the market for fixed broadband is already a duopoly competition and consumer choice is limited allowing mobile broadband to also become a duopoly is a bad move. All the reasons AT&T are giving for this merger are lies.
T Mobil employees may lose their jobs for one, also more consolidation results in less network investment and the companies will be squeezing consumers for more profit while providing subpar service. We need open access to the Web encouraging higher public participation. Also the President’s National Wireless Initiative unless it requires such companies to comply with public interest commitments is unnecessary.

Maneesh Pangasa April 19, 2011 at 9:32 pm

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