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AT&T's de la Vega takes on net neutrality and the data crunch
by Sue Marek
11 Mar 2010 at 9:16am
with AT&T Mobility CEO Ralph de la Vega
FierceWireless Editor in Chief Sue Marek recently visited the AT&T Mobility offices in Atlanta and sat down with President and CEO Ralph de la Vega to discuss how AT&T is battling the competition in advertising, dealing with its data capacity challenges, and planning for its next phase in its network migration.
FierceWireless: You recently published a book called "Obstacles Welcome: How to Turn Adversity into Advantage in Business and in Life." What was it like to write a book?
de la Vega: It was really hard. I have a full-time job so I worked on weekends for two years writing it. But I'm very pleased with it. It has received four out of five stars both on Amazon and Barnes & Noble.
FierceWireless: It seems as if AT&T has become the poster child for data capacity issues related to growth in smartphone traffic. Do you think you have properly communicated to the consumer why those issues exist and how they can be resolved?
de la Vega: I don't think you can ever communicate it enough. It's a complex subject. I think what we need to do is just talk about what we are seeing internally--that our network is getting faster. We are performing better in some markets and we are very pleased. And now PCWorld verified what we were seeing in a recent study that they did.
And I think some of our competitors are starting to see some of the same effects that we were seeing because of our success with smartphones. But I don't want to underscore the significance of what we have done. We have made great progress and I'm bullish on our network.
When you look at the number of global broadband customers that are using the technologies that are widely deployed that really bring mobile broadband to life--HSPA and EVDO--the U.S. has 40 percent of the high-speed broadband subscribers and we have 30 million customers on HSPA. This is very high compared to other carriers around the world. SK Telecom has 12.5 million mobile broadband subscribers, O2 has 2.5 million. So we have two times, or in some cases, 10 times the number of customers that some other operators have.
Clearly smartphones have become all the rage and the place where smartphones got started was in the U.S. In the U.S. we have twice as many smartphones on our network than our nearest competitor. So we have the network capability. We have the smartphones and the third ingredient is the applications.
I'd like to quote a statistic from Strategy Analytics that last year the U.S. passed Japan in applications downloading. So we have all of the key ingredients to bring this next revolution in data to fruition: the network capability, the devices and the applications. I don't think there is anybody in the world that is seeing the mobile broadband capability along with the smartphone uptake that we are experiencing. The bottom line is that we are going to consume more spectrum to keep up with this demand.
FierceWireless: As the chairman of the CTIA, what do you think is the biggest challenge for carriers?
de la Vega: Spectrum is a big issue right now when you talk about capacity. The CTIA recommended to the FCC that they look at the 800 MHz of additional spectrum, and the chairman is trying to allocate 500 MHz. We see this as heading in the right direction. But it takes a long time to clear spectrum.
And we also need to make sure that we are making efficient use of the spectrum that is available. LTE will be spectrally efficient and we have to make sure that mobile applications are optimized for that spectrum.
FierceWireless: Do you think your ad campaign, particularly around the holiday season, adequately combated the negative publicity generated by Verizon's advertisements?
de la Vega: Absolutely. The campaign that we ran was very effective. When it comes to the network and we show our coverage at 97 percent of the U.S. and our 3G coverage at 75 percent of the U.S., that is very memorable. But I don't want to continue to focus on us vs. them. Those [Verizon] ads were misleading consumers and we had to respond.
FierceWireless: AT&T is a member of the Wholesale Applications Community, which was announced last month at the Mobile World Congress trade show in Barcelona, Spain. Why is this organization important? Is it possible to get all these diverse carriers and manufacturers to work together?
de la Vega: I think when anything like that takes movement, you expect it to get more definition as time goes by. I think it's a great effort and it absolutely ties in with the comments I made over a year ago at Mobile World Congress 2009. At that show, I said that we basically needed to have common APIs to access the handsets. But if we combine that with common APIs to access the network elements, then for example presence and location developers can access the billing information that we have in the network and make location development easier.
I was talking with Rob Conway, who is the head of the GSMA, and he was telling me that they have this initiative called OneAPI that ties together and offers a common set of APIs that Web developers can use to access network capabilities. I think whether its OneAPI or the Wholesale Applications Community, the idea is that the movement is afoot to make it easier for developers to work with carrier networks. The way for that to happen is for us to work together to agree on common APIs.
FierceWireless: Is that realistic? This is a very competitive industry.
de la Vega: We highlighted this at the Mobile World Congress in 2009 and we talked with the GSMA board and had a very good discussion of the issues that our industry is facing. I think everyone has really embraced this.
FierceWireless: Are you concerned about Verizon's rapid deployment of LTE? Are you planning to change your timetable to meet their schedule?
de la Vega: I think our approach is rock solid. We will continue to use the technology that we have because it can be upgraded; thus it allows us to continue to give our customers superior service. We have deployed HSPA 7.2 throughout the country, and now we are moving to make the backhaul better, which will increase speeds. We will also deploy HSPA+ in certain locations.
When you look at LTE, our deployment is designed to fall back to HSPA. The beauty of our deployment is that it will come at the right time, when devices are available and devices will fall back to the high speeds that are available. With LTE, we think that there will be a lack of devices in the short-term. Our deployment is designed around those devices, so our network will come at the time when the devices are available.
FierceWireless: You said you are looking to do HSPA+ in certain locations. Where will you deploy it?
de la Vega: We are still working that out.
FierceWireless: At Mobile World Congress last month, we once again heard a lot of carriers talking about how they are "open." How does a carrier stay relevant in a world with open devices and open networks?
de la Vega: I think you need to continue to do things like the Wholesale Applications Community. The network assets that you have, such as location and presence, are what must be utilized and you are compensated for them. You use these assets so that you are providing more than transport.
At the Consumer Electronics Show we announced that we are going to use the BREW Mobile Platform to bring the level of applications that are typically only seen on smartphones today to mid-level and low-end devices that were once out of reach. That is a huge value add.
But the thing I'm most excited about is that after many years of work, we also have the ability to link wireline with wireless and to make the processes of multiple screens become a reality. You are going to see us make some announcements in the future that are pretty exciting. We can bring services to the customer that few other people can bring.
FierceWireless: So it sounds to me that if at some point you can't differentiate on the network, and you can't differentiate on devices--because they will go across all networks--then you will differentiate with the applications. Is that correct?
de la Vega: It's about how we can make life easier for businesses and consumers. It's beyond the network and about the experiences that you give the customer. If you are a business customer, we want to give you a good experience so you can run your business better and your sales force better. If you are a consumer, we need to be thinking solutions, not silos of networks. These are solutions that go across those screens to make your life better.
You will see us focus more on the customer experience and bring that mobile broadband experience to the customer.
FierceWireless: What is your biggest challenge today?
de la Vega: There are a lot of challenges facing us but I think one of the biggest is net neutrality. We think we are in a good position, but the proof will be in the pudding. We are very encouraged by what we have heard, but we know that the FCC chairman is in a tough position. We hope that he can recognize that wireless is different than wireline and spectrum is a limited resource, and so we have constraints that wireline business does not have.
FierceWireless: A year ago there were seven mobile operating systems to choose from. This year there are at least eight, maybe more. In the PC industry the operating systems consolidated. Why is this area becoming more fragmented in wireless?
de la Vega: I think it's going to take a lot longer to shake out in the wireless industry. Instead of reducing some, we are adding some. In light of that complexity, we have to figure out how to operate effectively and still give customers the choices that they want. That is the challenge. It's an increasingly complex world.
FierceWireless: The CTIA Wireless trade show in Las Vegas is rapidly approaching. As chairman, what do you think will be the big message out of the show, scheduled to start March 23?
de la Vega: I suspect you will hear us talking about the spectrum issue. Around CTIA, the [FCC's] National Broadband Plan will be rolled out. The other thing is that now we have three shows: the Consumer Electronics Show, Mobile World Congress and now CTIA. For the industry dealing with those three in a row is a challenge. It used to be that the Consumer Electronics Show didn't have that much wireless, this year it was all about wireless. It has dramatically changed.
Navajo Nation looking to deploy LTE
by Lynnette Luna
10 Mar 2010 at 11:25pm
The Navajo Tribal Utility Authority (NTUA) is waiting for federal broadband stimulus dollars. If it receives the grant, the utility will deploy an LTE network using 700 MHz spectrum across 15,120 square miles of desert.
The plan is to deploy a 550-mile fiber backbone and microwave links to connect some 30,000 households in the Navajo Nation, which stretches across parts of Arizona, New Mexico and Utah. NTUA has asked for a $46 million grant from the National Telecommunications and Information Administration (NTIA), and is hoping to hear shortly whether its plan was approved.
The utility already has one LTE base station operating in a test, and if all goes as planned, service would be commercially available to some residents in the fourth quarter.
For more:
- check out this PC World article
Related articles:
MetroPCS to launch prepaid LTE and avoid subsidies
CenturyTel to target rural broadband customers with LTE
In-Stat: LTE rollouts impeded by success of 3G
Maravedis: Mobile WiMAX chipset shipments reach 5M in 2009
by Lynnette Luna
10 Mar 2010 at 10:37pm
A new report from Maravedis indicates shipments of mobile WiMAX chipsets reached 5 million in 2009, up from 1.3 million in 2008. However, the total WiMAX equipment market remained flat at $1.36 billion, compared with $1.34 billion in 2008, said Maravedis research director Adlane Fellah.
"The overall picture is mixed. Shipments of base stations decreased in 2009 and were impacted more deeply by the economic downturn, whereas device shipments, especially mobile WIMAX devices, grew at a rate of 147 percent year-over-year compared to 2008, correlating to the addition of a 3.5 million WiMAX subscribers during the year," Fellah said.
Maravedis also said Beceem, Sequans and GCT account for nearly 90 percent of the total mobile WiMAX chipset market, while indoor modems represented about 48 percent of WiMAX units shipped last year.
For more:
- see this cellular-news article
Related articles:
Can WiMAX chipset vendors find a place in the LTE world?
Beceem ships more than 1 million mobile WiMAX chipsets
Silicon shootout: Analyzing the market's WiMAX chipset vendors
FCC's broadband plan faces opposition
by Lynnette Luna
10 Mar 2010 at 10:12pm
As the FCC continues to reveal different details about the national broadband plan ahead of the agency's official reveal to Congress on March 17, some of the key pieces of the plan are drawing opposition.
In particular, broadcasters don't want to give up spectrum the FCC is proposing for wireless broadband and lawmakers don't like the potential price tag.
One key provision, a "Mobile Future Auction," is a spectrum auction that would allow current licensees, including broadcasters, to voluntarily give up spectrum in exchange for a share of auction proceeds. That is one element of a plan to free up 500 MHz of spectrum over the next decade for mobile broadband use. The wireless industry, including the CTIA, has applauded the plan's vision. However, broadcasters are worried the voluntary aspect of the plan may become mandatory.
The commission has acknowledged the challenges it faces in implementing the effort. "If it were easy, [this reform] would have been done a long time ago," Blair Levin, the head of the FCC's broadband plan task force, said in an interview with BusinessWeek. Levin said many broadcasters have told the FCC they will sell their spectrum. However, if the commission doesn't get enough takers, it may have to alter the plan.
The National Association of Broadcasters trade group last month offered a generally downbeat view of the FCC's plan. "As a one-to-many transmission medium, broadcasters are ready to make the case that we are far and away the most efficient users of spectrum in today's communications marketplace," said NAB Executive Vice President of Media Relations Dennis Wharton. "We look forward to working with policymakers to help expand the roll out of broadband without threatening the future of free and local television, mindful of the fact that local TV stations just returned more than a quarter of our spectrum following our transition to digital."
The plan's price tag--which includes $12 billion to $16 billion in funding for a nationwide, interoperable broadband network for first responders--is also drawing criticism. Congress already has approved $7.2 billion in stimulus spending for broadband, and may be unwilling to tack on additional spending in an election year.
For more:
- see this BusinessWeek article
Related Articles:
FCC considering spectrum for free wireless broadband
FCC's broadband plan to carry $25B price tag
FCC plan calls for 500 MHz of new spectrum for wireless
FCC details national broadband plan priorities
Reports: 3G to drive network investments in 2010
by Lynnette Luna
10 Mar 2010 at 9:21pm
Sales revenue from mobile radio and core network equipment decreased 13 percent in the fourth quarter and is expected to be flat in 2010, according to the Dell'Oro group. Meanwhile, ABI Research estimates operators will spend approximately 4 percent more this year on all network capex, following a 2.7 percent decline last year.
ABI analyst Bhavya Khanna indicated that although mobile data usage more than doubled in 2009, the radio and network revenue didn't keep pace because of unlimited data plans, and the weak economy prompted operators to hold off on investments. Globally, radio and network equipment revenues fell because of a drop in investments in second generation networks, according to Dell'Oro analyst Scott Siegler.
But investment in 3G is growing as Dell'Oro estimates growth of 30 percent in 2010, as operators upgrade their networks to higher data speeds and China embarks on 3G buildouts. Spending on LTE will be minimal in 2010 as operators begin to ramp up investments and sign contracts. Dell'Oro predicts the LTE equipment market will reach just $250 million in 2010. By 2014, that number should rise to $5 billion, but LTE is only expected to make up about 10 percent of mobile network equipment revenue as operators continue to milk their 3G networks.
For more:
- check out this Network World article
Related articles:
GSMA: 2010 global operator capex to reach $72B thanks to mobile broadband
Analyst: AT&T must boost cap-ex to keep up
Verizon holding capex spending steady for 2010
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