Aug 3, 2010 1:08 PM,

Kick-Off: Tackling the 4G Paradox

By Kevin Fitchard

Connected Planet's Kevin Fitchard kicks off our latest 'interactive feature,' a months-long examination of the challenge presented by emerging 4G networks and services -- culminating in a virtual event this October. Join us now as we get started.

(This story is part of Connected Planet’s Mobile Data Paradox microsite – an ongoing collection of features, blogs and opinions on the key question facing mobile operators today: how do you make a business of 4G and mobile data?

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It all leads up to the 4G Salon event at our upcoming Connected Planet Virtual Industry Forum. Register now to join us at this exciting, interactive event.)

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AT&T today said it spent $8.2 billion in capital expenditures in the first half of 2010, including sizable investments in expanding its 3G network. AT&T added 925 new cell sites to its 2G and 3G footprint to provide more coverage, while upgrading 600 cell sites in non-3G markets to support high-speed packet access. In addition, AT&T began sectorizing many of its existing 3G cell sites, adding an additional 6500 radio carriers to bulk up voice and data capacity on its network. In high-traffic areas such as sports stadiums and concert venues, AT&T built distributed antenna systems, allowing it to blanket high-capacity dense places with coverage.

Between 2007 and the end of 2009 AT&T saw an unprecedented 5000% increase in mobile data growth, driven by iPhone and other integrated data device subscriptions. The surge caused havoc with AT&T’s network, particularly in markets like New York and San Francisco, and led to spate of complaints from AT&T’s new smartphone subscribers. Since 2009, though, AT&T has said it has been investing heavily in the 3G network, not only adding sites and carriers, but doubling capacity on the existing 3G network through software upgrades. The operator plans another upgrade this year to HSPA+, which will at least double capacity over the network again.

Though AT&T released figures showing significant investment in 2G and 3G, most of its capex spend — about 60% — went to wireline improvements. AT&T expanded its U-verse residential footprint, expanded its broadband and fiber networks, and added capacity to its fiber backbone and added more W-iFi hotspots. The last two do double duty as wireless improvements, as AT&T builds its fiber networks to connect formerly copper-fed cell sites and uses Wi-Fi to offload mobile data traffic from the wide-area 3G network.