AT&T names LTE suppliers as it charges into battle with Verizon

Both wireless carriers plan next-gen LTE, but AT&T promotes its HSPA 7.2 upgrade pathway

AT&T Inc. today announced equipment suppliers for its coming high-speed wireless LTE network and signaled the start of an aggressive battle against rival Verizon Wireless.

AT&T named Alcatel-Lucent and LM Ericsson as its LTE suppliers, awarding them multiyear contracts that are estimated by analysts to be worth hundreds of millions of dollars. None of the parties discussed the exact terms of the deal.

Several major suppliers had hoped for the contract, including Motorola Inc., which could not be reached for comment today.

In picking the two LTE suppliers, AT&T said that it "chose to extend existing relationships" because both had provided equipment that's being installed for upgrades of its 3G networks to HSPA 7.2.

HPSA 7.2 technology, which has theoretical speeds of 7.2 Mbit/sec., is used by the iPhone 3GS and nine other devices as well as 3G models of Apple Inc.'s upcoming iPad. The network upgrade could give AT&T a strategic advantage over Verizon in coming months.

In a statement, AT&T explained the value of working with its current suppliers this way: "Continued work with these two suppliers will enable AT&T not only to incorporate high-performance LTE equipment, but also to take full advantage of the compatibility between the suppliers' existing 3G equipment and forthcoming upgrades."

"As part of the supplier agreements, 3G equipment delivered to AT&T by the suppliers starting this year will be easily convertible to LTE, enabling AT&T to upgrade existing equipment and software rather than install entirely new equipment in many cases as it deploys the next-generation technology," the statement continued.

In an e-mail, an AT&T spokeswoman added that picking Alcatel-Lucent and Ericsson "is an important step in our ongoing mobile broadband strategy. Unlike our competitors, our strategy will enable us to deliver even faster speeds to a large number of people before 4G [LTE] networks and device lineups scale."

In a statement, John Stankey, CEO of AT&T Operations, claimed that AT&T has an added advantage over Verizon when it comes to LTE. "AT&T has a key advantage in that LTE is an evolution of the existing family of GSM technologies that powers our network and the vast majority of the world's global wireless infrastructure," he said. For its part, Verizon has provided CDMA networks, although it has a clear upgrade path to LTE that is underway.

Verizon and AT&T have been crossing swords for months, if not years, in preparation for the coming LTE battle in the U.S., with both announcing LTE road maps. While AT&T repeated today that it would move forward on two LTE field trials this year, Verizon said in January that it had field trials already underway in Boston and Seattle, and that it expects to launch LTE in 25 to 30 cities by the end of 2010.

But AT&T has undertaken a flank attack. Instead of timing LTE deployments in line with Verizon's in 2010, AT&T has marshaled its forces with the Alcatel-Lucent/Ericsson deal and will aggressively pursue its HSPA 7.2 upgrade path.

But AT&T has also acknowledged that the HSPA 7.2 upgrades will depend on installing fiber-optic backhaul connections to cell towers and other cell sites. Early in February, AT&T said it had reached parts of six cities with the needed backhaul connections. In December, AT&T Mobility CEO Ralph de la Vega had claimed that it would reach 25 cities by mid-2010.

Even so, AT&T has projected that a majority of its mobile data traffic will be carried over the expanded fiber-based HSPA-capable backhaul by the end of 2010, with continued expansion in 2011.

AT&T is spending $2 billion more on network improvements in 2010, and many high-speed wireless data needs will be met with Wi-Fi connections, including 20,000 AT&T hot spots.

How well AT&T meets its schedule could be important to some consumers, including iPhone users and those who plan to buy iPads, since AT&T is the exclusive iPhone service provider in the U.S. and will be the 3G provider for the iPad.

In revealing how aggressive it plans to be in improving its high-speed wireless service, AT&T seems to be making an effort to appeal to potential new subscribers. The company has more than 85 million subscribers and clearly has its eyes on luring away some of No. 1 Verizon's 91 million customers.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed @matthamblen or subscribe to . His e-mail address is mhamblen@computerworld.com.

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