“It’s been a challenging year for us,” said John Donovan, the chief technology officer of AT&T told me during an interview earlier this year. “Overnight, we’re seeing a radical shift in how people are using their phones. There’s just no parallel for the demand.”

If you are one of the nearly 8MM or so people that have an active iPhone in the United States, and especially those of you who live in congested urban areas like San Francisco or New York, you no doubt know first-hand the frustrations of using your device on the AT&T network.   Dropped calls, not receiving calls even when the phone is in your hand, unexplained and sudden dissappearance of voicemail, inability to connect to the Internet, etc. are just a few indications of the unreliability we endure to use the iPhone.  Consumer Reports ranked AT&T Wireless dead last in its December 2009  ranking of the major mobile carriers, significantly behind leader Verizon.

We all know this to be the case because iPhone users consume more than 10X more data than other mobile phone customers.  And all of us put up with the unreliability because the iPhone is such a better mobile experience than anything currently out there- although this is sure to change over the next few years.

The question I wanted to find out is “Why” is the AT&T Network unable to deal with the infrastructure demands of this new generation of mobile devices.   Here is what is going on and why its only temporary.

  1. AT&T Mobile (And It’s Network) Was Cobbled Together Via Acquisitions:  AT&T Wireless was born when AT&T purchased McCaw Cellular, itself built up via the acquisition of MCI and LIN Broadcasting.  McCaw was the first company to create a national network and invented the dreaded “roaming” charges.  AT&T then merged with Cingular, which was a marriage of Bellsouth and SBC.  As is the norm when cousins marry, the offspring has some problems.  Think of AT&T’s inherited network as the product of an old British Royal marriage or kissing cousins from Arkansas.  It’s an ugly mess.  No offense.
  2. AT&T Mobile Made Poor Tech Choice:  Years ago, AT&T picked a technology called TDMA to base their network on rather than investing in the more promising CDMA.  Rather than get bogged down in geeky details, all this stuff does is chop up your conversation with your mother into little bits, sends those bits to a tower, and then reassembles them once again so your mom can understand you.  TDMA does a good job with voices but is terrible at splicing and repackaging data.  So, AT&T has had to scramble to put patches on their network (that was EDGE) while they upgrade to CDMA or 3 G.  In a few short years, this will be all done at AT&T will be able to handle everything you can throw at it.
  3. AT&T Has Junk In The Trunk:  But, there is a potential huge problem for all the carriers: they have junk in the trunk.  They have what the industry calls “back haul” issues.  When you use your phone to talk or to get basketball scores, you are using the wireless spectrum PLUS the wired infratsructure to connect to the interwebs.  The connections between the towers that talk to your phone are wireless but the network is wired and/or microwaves.  That’s the stuff that needs the most fixing.  But, they are quickly making the capex requirements on the necessary upgrades to meet data demand.

As AT&T showed last week at SXSW, they can easily install more towers to prevent the bottlenecks on the ground.


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