AT&T Says Infrastructure Spending is NOT the Reason for iPhone Connection Problems
AT&T contacted TiPb with a statement refuting claims that their capital expenditures, specifically their investment in wireless infrastructure, has decreased while at the same time their data revenue is increasing.
To quickly recap, the claim about infrastructure investment falling as data profits rose was one of the most direct charges leveled by Newsweek's Daniel Lyons (writing as Fake Steve) as part of his Operation Chokehold series, and repeated several times on TiPb and other sites.
In the statement (reprinted in it's entirety below) AT&T claims they've increased network investment in 2009, and are taking other steps (like rolling out the 850 MHz band) to improve customer experience.
Remaining unaddressed: the actual cause of the iPhone-on-AT&T problem(s) in cities like New York and San Francisco, given that international users on other carriers do not report the same issues. Granted, AT&T users in those or other affected areas may not care why it's broken. However, they likely do care deeply that it gets fixed and soon. (And so should AT&T given the increasing level of mainstream attention).
So, read the response below and then let us know what you think.
The metric you use in the phrase “While AT&T was content to increase data revenue while decreasing infrastructure investment all in the name of shareholder value” has been seen in a number of posts recently. However, it captures overall corporate capital expenditures for AT&T, which includes wireline investment as well as a number of items that are not directly linked to network investment (or performance) - including real estate, call centers and IT support. There is no way to calculate or even infer what our network investment is for any given period using those capex numbers. While we don't break capex down to the level of network investment for competitive reasons, based on expectations for the full-year 2009, we anticipate that our wireless network investment will increase significantly compared with 2007 levels. And wireless capex increased significantly from 2007 to 2008.
Here’s a look at how we’re spending what’s expected to be between $17 and $18 billion in improvements in 2009 to our wireline and wireless networks, with billions on wireless:
- We are nearly doubling the wireless spectrum serving 3G customers in hundreds of markets across the country, using high-quality 850 MHz spectrum. This additional spectrum expands overall network capacity and improves in-building reception.
- We are adding about 2,000 new cell sites to our network in 2009, expanding service to new cities and improving coverage in other areas.
- We’re adding about 100,000 new backhaul connections, which add critical capacity between cell sites and the global IP backbone network.
- We’re enabling widespread access to our Wi-Fi network – the largest in the country with more than 20,000 hotspots in all 50 states – allowing customers to take advantage of the best available AT&T mobile broadband connection.
- We’re rolling out even faster 3G speeds with deployment of HSPA 7.2 technology and are preparing for field trials of next generation, LTE wireless networks next year, with deployment planning to begin in 2011. This schedule aligns with industry expectations for when a wide variety of compatible 4G wireless devices should be available.
Editor-in-Chief of iMore, Executive Producer at Mobile Nations, co-host of Iterate and ZEN and TECH, cook, grappler, photon wrangler.
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F that why does my phone drop calls with 5 bars of 3g?
It's my understanding the bars represent the strength of the signal broadcasting from the tower, not the actual bandwidth available from the tower to the network. By way of example, if your home WiFi router is on but your cable or DSL modem is off, you can still receive a full WiFi signal, there's just no connection behind it.
Yeah, and why doesn't mine?!
I am inclined to believe AT&T. To have the issues they are having and not have had an increase in capex investment seems unlikely if not fraudulent. I believe they are not responding fast enough to meet the public demand, but I sincerely doubt that they have not invested at all in an attempt to meet demands. Their explanation seems reasonable, but it doesn't prove anything except they are not complete weasels. They continue to have the major issues, they continue to sell additional devices to unknowing consumers, and have not come out with a public statement about the source of the real issue or a timeline for delivering the "implied level of service" from their marketing. If they were serious about a solution a timeline for it to be mitigated should be very close at hand. If it is, it needs to be more transparent. The consumer needs a sense of comfort that it will be resolved.
at&t: blah, blah, blah everyone else: curse you greedy bastards.
I live in NYC and the 3G service in the heart of Times Square is a joke. A joke.
For one I am high on my ATT service over the past three years. During that time I lived in San Diego and Atlanta. Not one problem with my 3g coverage. I am glad that verizon is challenging them not because I think Verizon is better, however it will make ATT improve even more. All these people say that they would jump ship to verizon if they had the iphone will come crawling back to ATT once they realize that verizon 3g is just barly faster than edge. Also why would you want a iphone on a network who couldn't do voice and data at the same time.
ATT with all this press will improve the already faster 3g speeds and all will be well in the wireless world. I for one will stay with ATT.
How can it not be AT&T's fault that they chose to only cover a very small 1/5th of the coverage of Verizon with 3G?
Who's fault is it? Mine?
What good is faster and faster speeds... if you live in 1 of the COUNTLESS cities that doesn't even have ANY 3G coverage from AT&T? (But Verizon covers 5 TIMES more area already.)
5x more area with slower speed data only 3G. Sucky tradeoff in either case... ATT needs more buildout, it's true.
I agree. It's not the 3g speed I have a problem with, it's the connection. I live in Pittsburgh and the coverage here is terrible, even outside of town into the metro areas. I'm at a point where if I'm driving I may as well forget about chatting on the phone or using any type of data. However, when I am on 3g it is nice and snappy...If I can actually get on it.
Like I said Att should expand their 3g footprint they already cover all the metro cities. I really wonder how many customers live out of the 3g range. But their edge is on par with the verizon 3g. So if you put ATT edge and verizon 3g map it will be about the same. I for one am cool with ATT it also helps I live in Atlanta where coverage is great in the whole metro area
When Rene posted the SNL piece I was thinking of challenging the "Less spending" mantra having seen nothing in ATT's 10K which identified 3G infrastructure.
But I got side tracked and forgot it, besides, Rene's tired of me ragging on him all the time.
We know that Apple goes to GREAT LENGTHS to obfuscate their 10Ks so that no one will know the true costs of the iPhone, the iTablet, current development project sizes, etc.
Everybody knows this.
Yet somehow the blogosphere High-Fived Fake Steve when he took a cursory glance at a 10K, (a document he clearl does not understand) and shot his mouth off without even checking with the Newsweek's Financial Editor who would have set him straight.
Clearly there is something wrong in NYC, but there is nothing wrong in Seattle unless you are sitting in Quest field during a Seahawks game.
@AT&T- Tell it to the hand because the face can't hear it over your crappy network.
Well, I still have a tough time getting a signal around my area. I have 5 bars of EDGE (no 3G in the area) then go a mile down the road, and there is no signal whatsoever. What's up with that? I stuck up for AT&T when I first bought my iPhone and all of my friends had Verizon- and a signal on their phones. But now, I couldn't be more excited for the end to exclusivity and a new contract and iPhone on Verizon (hopefully).
I'm getting tired of the constant whining about NYC coverage. I gather there is a problem there. Big deal. NYC is not the center of the universe. Lot's of other areas have problems, and lots of areas don't have problems. (My area recently got the 850MHz love and it rocks.) Whatever. You'd think these people had never used cellphones before. Yeah, cell service often sucks, and the grass always looks greener on the other side. But this pee fighting with AT&A is childish. I thought this blog was supposed to be about the iPhone?
@hungwell put the iPhone to your ear not your face...
Thats one phone issue fixed.... NEXT....
And my AT&T service rocks where I am at
What I find comical is the people who keep bringing up the voice and data at the same time. That can only be done on a 3G connection which is exactly what Verizon is bashing them on. So it is a stupid point to make when the coverage you can actually use voice and data at the same time is so small and spotty. I had AT&T for years and thought dropped calls were a normal thing for cell phones. In my opinion Sprint puts everyone to shame. Fast 3G, good coverage, roams Verizon if you don't have a good signal, and about half the price of what I was paying with AT&T for more features!
Signal is ridiculous around here. I have LITTLE 3g in my town. I drive a mile north and I have full 3g. A mile east and you never know what you are going to get, sometimes 3g, sometimes edge and sometimes no signal. Pretty lame that in a couple square miles the coverage changes so much and is so inconsistant. I've been complaining to AT&T for months and each te I call I get a different story as to why I'm having problems.
@Icebike: your nagging is always appreciated. Please do keep it up
@Nageki: re: the voice and data at the same time.
No true.
You can surf on Edge while talking.
This post seems to be spin from the PR department of AT&T, unfortunately.
Isn't AT&T only concerned with short term profits?
Is there any reason at all to believe AT&T when most every piece of information you read on the web about this subject clearly states AT&T is spending less and less, it's profits are higher and higher, and that users in foreign countries are not having the problems that iPhone AT&T users are having?
@webvex: Not everyone lives in NYC, but 6 million people live on Manhattan alone. It contains the U.S.'s financial center as well as the headquarters of the U.N. It's hard for a cellular networking company to have a viable service for businesses if it can't ensure basic reliability of phone calls or data connections in NYC.
The value of AT&T's statement is extremely limited. Not only does it not provide any geographical information or any context for understanding the numbers, it's obvious that AT&T has to compete with other networks for speed. There's no practical information about, for instance, if a faster network will reduce the perceived unreliability of the network in NYC and SF, and by what amount they expect reliability to improve in those areas.
AT&T probably can't or couldn't stop selling the iPhone during a period of carrier exclusivity just because of concerns about its network. It presumably obligated itself to provide service for every iPhone sold in the U.S. At the time of the iPhone 3G release, an anonymous person from AT&T told USA Today that the iPhone was "too powerful." The reason for the firmware update was presumably to make it less powerful. That's as close as AT&T has ever come to blaming the iPhone itself for the difficulties supporting it. Maybe AT&T is also contractually unable to say why the iPhone is a problem for their network. Because the information in this statement from AT&T is meant to sound like a direct response to criticism, but in fact its very focal and indirect to the practical matters at hand. As usual, though. It's just corporate speak.
I haven't heard anyone quoting Apple's position on this issue. If Apple is, at least, partially responsible for the connectivity issues in SF and NYC, they are not saying so. Of course, they think it is better to let AT&T take the brunt of the mud-slinging.
Either way, there IS a problem. Regardless of the cause, all of the publicity and shared user experiences should make AT&T and Apple prove otherwise. Once a mainstream entity like SNL starts spoofing...it becomes gospel to the public. One nail in the coffin.
On a side note, I, for one, can not find too much fault with the 3G map as it appears on Verizon commercials...inaccurate or not...in my area of Northeastern PA, there is NO 3G. None. For all those who are "sick and tired" of hearing about NYC and SF problems, it is a whole lot easier to be sympathetic if you live in areas similar to my own. If it were your city, you'd complain and want changes made.
I'm confused. It says they're doing all that in 2009? So all that is happening in the next 2 weeks? Sweet!
@icebike
No sir, you can not talk and surf on Edge. The only way to do that would be to enable WiFi. Give it a try...not going to happen on Edge alone.
@Dennis
About 1.6 million people live in Manhattan - not 6 million. Were you maybe trying to indicate combined residential and working population?
BT
The 850 roll-out will help in a huge way. 3G networks in large countries (such as the US) over 1900/2100 have been patchy at best. 850/900 UMTS networks however, wonderful!
Ya know I had it with people bashing AT&T. If your in a area where there is bad service. Why not get on a carrier that has good service in your area. Instead if crying and whining. Verizon and sprint have similar phones to the iPhone. Just not as great. Not everyone has bad service with AT&T. I for one do not. I connect and stay connected all the time(upstate NY). Verizon has just as much dead zones as AT&T. My girl has a bb tour on verizon. And has bad service connection all the time cause verizon sucks in our area. And she drops calls all the time. She will be ETF ing it in Jan. Guess where she's going????
AT&Ts network isn't without it's problems. I live in the SF bay area and I have no problems at all. I pull between 2500-3200 download speed from the towers. One of AT&Ts problems is the fact that they split the spectrum between voice and data to allow both to happen at the same time. Which obviously causes a problem when you only have half of the spectrum to play with for each side. Second problem is that CDMA towers have 1/2 to 2/3rds better reach than GSM towers. CDMA signal can also be colated, which means the phone can use signal from more than one tower at a time. Where GSM pretty much hands the calls off from tower to tower. And too much overlap will yield dropped calls. Verizon had the luxury and also had no choice but to upgrade it's entire native network to EV-DO starting in 2003 and completing in 2007. Really difficult to upgrade a network with a bunch of moto flip phones sucking the towers dry for bandwidth. Not so much. AT&T takes the brunt of the force. Leading the way with a celebrity smartphone on their network that uses 10 times the data and bandwidth than any other phone. I heard people complaining when AT&T talked about capping unlimited iPhone data. Someone was using 66GB of data streaming podcasts over 3G.
AT&T is also in the process of upgrading it's Edge network to 3G. What they won't tell you, and I know a tower guy that lives right across the street from me. The average time to convert an edge "array" to 3G, switching all the hardware. Hanging new antennas changing out all of the cabinets. And running all of the new backhaul lines. And getting it all signed off and approved is 540 days for 1 site. Longer if there is no existing infrastructure in place.
And AT&T has had to handle this with an almost 5000% increase in data over 2 years. Picking up a bad repuation along the way over 1 phone. Paparazzi don't want to get a picture of the Blackberry Storm. There isn't any news in it. Now as soon as you say the word iPhone. Now that's news. It's a threat and at&ts network is under scrutiny because of it. So anything attached to it is going to be to blame. Even though independent research firms have already said AT&Ts network is better overall. A single CDMA tower can cover more than 600 square miles. Where AT&Ts will cover about 1/3 of that.
Verizon will see what it's like going to 4G. Overlaying a GSM based network over a CDMA network. Keeping the CDMA network in place to take over for where the LTE network loses signal. AT&T is really doing a good job lately at getting things rolling. They have a ways to go. But they are definitely still in competition. Best thing Verizon could have done was buy Alltel who, in 2006 had more coverage Verion has today. So much more it was forced to sell it's GSM roaming network to AT&T. There is still quite a competition between the 2 carriers.
Nice post Gregg
@BT: Sorry that was a mistype. You're right, the population of Manhattan is 1.6M, while NYC as a whole has over 8 million people, apparently.
up until last week i ahve had flawless coverage with att and have always wondered why so many people complain about the service.
However, i have noticed in Hartford CT i have now been having the same issues as the rest of the people , full 5 bars and iphone calls dropping in 3/5 seconds.
I can usually make a call right after that without a problem.
The whole "5-times" arguement is another gross misrepresentation. It is based on area not population. AT&T's edge network is larger than VZW and not a whole lot slower (although inadequate for iPhones, in my opinion). AT&T claims 75-80% population coverage for 3G (which I'm pretty sure is accurate), VZW's total coverage is still less than AT&T's Edge. Not sure how they can justify the "5-times" statement (5-times more sq mileage is good for about 10% of the population).
They were obviously caught by surprise on the 5000% increase in data traffic (yes, 5,000%) since the iPhone was introduced. It is reasonable to scale up a network capacity increase in the tens of percent. Even if you abandon everything else and throw all your money at network capacity expansion (which would be irresponsible, BTW), you still couldn't likely scale more than 100% expansion year over year --and the lead times for tower and spectrum expansion are huge.
My whole family has iPhones and we rarely see ANY problems. (I saw some nasty problems downtown Chi in 08, but it's fine now)
Full steam ahead AT&T. I am happy with your service and won't be leaving anytime soon unless the iPhone goes to another network and has a marked difference in monthly costs. I am not interested in saving 5 bucks a month. 20-30 bucks? Yeah that might change my mind. Besides.......who wants to pay extra for visual voicemail on Big Red's network?
NYC has the same problem that SF does - the NIMBY crowd! Ever seen the ridiculous permit process that has to be navigated? In many areas, companies have to have a lengthy environmental impact study done on each potential site. It goes without saying that eco-green San Francisco is adifficult place to get new cell equipment added. Tower at a school? Lawsuits get filed, process gers delayed. New tower near a church? Lawsuits get filed, the "Not In My Back Yard" crowd protests it. Same thing with New York City. There's limited space and there is a LOT of red tape surrounding wireless communication towers. People are still convinved that cell phones give people brain cancer.
Also, AT&T contracted out a lot of their network stuff to Ericsson. So did Sprint. That wouldn't show up on their financials. This was just the blogosphere taking bad information and running around with it.
Tim says: "I’m at a point where if I’m driving I may as well forget about chatting on the phone or using any type of data."
So there is an upside to any AT&T coverage shortfalls.
Ya, AT&T you've added a ton of cell sites, mostly because of the ones you got in the Unicell takeover... which should tell you something considering that Unicell had > 1000 that were taken over, they did squat otherwise.
Oh and that service you took over in Vermont and NH? It sucks now because of you. It was great on the iphone roaming on it before, now you can't drive up I91 without major service interuptions everywhere (including in Brattleboro about 300 feet from your AT&T store!) and the sites that you haven't swaped over yet won't pick up the calls so they get dropped as the phone despirately tries to stay on AT&T without roaming on towers that you own on Unicell (i.e. Bellows Falls area) One minute you have 5 bars, the next you have none and your call is dropped.
Horrible horrible service quality when once it was stellar.
i have the Iphone Atlanta GA i have great service i dont know why so many cry about bad service i love it sprint sucks around here so i say keep it up att soon it will be knowen att is better
First of all, awesome post Gregg. Its nice to see someone on this site who has acutally done the research and presented it in a factual manner. Not just a bunch of skewed personal feelings with no data to back it up. Second, I live in northern AZ with no 3G service, just edge and weak edge at that. Theres only 10 towers to service about 150,000 people. I have Curve 8310. I have not once dropped a call or lost signal where I should have it in the past 2 years. I know a lot of people with an iphone who lose signal and drop calls all the time around me when I dont. Could it be possible its the IPHONES fault?
I know for a fact that att is spending about 500 million up here. Converting edge into 3g and adding more cell sites to compinsate for a growing population. On top of that, I believe (again believe, not know) that we are getting that wonderful 850 spectrum.
My point is is that it doesnt really matter where you live, there is always going to be some sort of bad area. My little podunk town in BFE is proof that att is well aware of thier network short comings and are working to improve them. Not to say they dont have a long road ahead of them but a least they ARE working to fix it.
Very good website!