Analysis: How '4G' will AT&T's 4G network be?

AT&T is planning to launch its first 4G-branded device, the HTC Inspire, on Sunday, Feb. 13, followed by the highly anticipated Motorola Atrix in March. At that time it will also, presumably, start marketing its network as a 4G network.

No one can really fault AT&T for using the term 4G—it’s become the battle flag in the smartphone and mobile data wars. AT&T, like T-Mobile, likely figures if it can offer up a data experience as good and fast as other so-called 4G networks it has every right to appropriate the 4G name. But compared to other operators’ services, just how 4G will AT&T’s networks be?

AT&T has confirmed that is upgrading its network to the full high-speed packet access plus (HSPA+), putting an end to speculation (mostly by us) that it might be upgrading to the final iteration of HSPA, which supports a maximum theoretical speed of 14.4 Mb/s. But while the network will have the HSPA+ upgrade, AT&T’s initial phone, the Inspire won’t. It sports a 14.4 chip just like T-Mobile’s 4G-branded phones. Technically, AT&T will be running HSPA phones on an HSPA+ network, which will just elongate the already stretched definition of 4G.

Given that 4G has become a marketing term rather than a technical one, the distinction is probably moot. The bottom line is AT&T’s new 4G devices will be twice as fast anything it currently has running on its network, and if they can support the 5 Mb/s-plus speeds T-Mobile is cranking out on its 4G phones, it shouldn’t have any marketing problems. The big question is whether AT&T will be able to support those speeds. While the devices will be technically capable, the network might not be physically able. Here’s why:

Problem 1: Backhaul. AT&T has completed the HSPA+ upgrade in the radio network, but it hasn’t completed its backhaul upgrade. AT&T says it will be carrying one-third of its traffic over fiber or other enhanced backhaul pipes by mid-year and increase it by another third by the end of 2011. Any cell site running HSPA+ anywhere close to capacity likely will see a huge bottleneck if it’s still relying on T-1 backhaul links, which means those huge speed increases will fail to materialize. T-Mobile, too, rolled out its fiber backhaul network gradually, but then again it rolled out its mobile broadband network gradually too, marketing 4G only in locations where it had completed both the HSPA+ and backhaul upgrades. I’m assuming, though, that AT&T will launch the Inspire and its associated 4G service nationwide. That means there will be an awful lot of cell sites still not ready to accept the full brunt of an HSPA+ onslaught. AT&T, however, is rolling out backhaul on a site-by-site basis, not a market-by-market basis, targeting the most congested cell sites first. By upgrading the most heavily trafficked cells first AT&T might mitigate the problem.

Problem 2, simply put, is the iPhone. AT&T may be losing exclusivity of Apple’s smartphone next month, but that still leaves tens of millions of iPhones and their YouTube-happy users piled up on AT&T’s network. HSPA+ won’t be a new network for AT&T, it will be a capacity upgrade—a capacity upgrade that’s already largely in place even though AT&T is still suffering severe congestion issues. Those Inspire phones will be technically lightening fast, but they’ll also be vying with millions of iPhones for network airtime and finite capacity. Because those phones can do their business on the network twice as fast as the iPhone, they’ll definitely relieve some of that congestion. But a cell that’s already filled to capacity is already filled to capacity. T-Mobile didn’t have this problem, in all frankness, because before ‘4G’ it wasn’t selling any smartphones.

There’s a chance that AT&T is pulling off a brilliant maneuver here. If the necessary upgrades are in place, the phone is exceptional and the speeds what AT&T claims, then it will have launched 4G early, paving the way for its long-term evolution (LTE) service and altering its customers’ currently negative perceptions of its network.

But there’s also a chance that AT&T is shooting itself in the foot here. If the new HSPA+ service fails to live up to its promises, then customers will write off AT&T and AT&T’s 4G claims. That will really hurt the operator when it actually launches its new LTE service, which really will deliver gobs of capacity over a wide-open brand-spanking-new network.