The dark side of AT&T's $US17b investment plans

Stuart Corner
Thursday, 12 March 2009 02:19

IT Industry - Market

Australians may look enviously at the USA where AT&T has just announced plans to expand its FTTN/H network to 30 million homes and to offer femtocells along with a host of other upgrades, but, according to one expert a series of regulatory failures has destroyed competition and left US telecoms consumers at the mercy of megacorporates like AT&T.

AT&T has provided a rare good news item from the recession hit US, announcing that it will spend $US17-$US18b in 2009 in network upgrades and create 3000 new jobs. The figure includes the $US1b for upgrades to its international networks, announced last month (ExD 25 Feb).

The total investment figure is down from 2008 and in line with the 10 to 15 percent for 2009 that AT&T said it would make when it announced its Q4 earnings. Nor will the 3000 new hires compensate for the 12000 jobs AT&T said it would shed back in December.

The investment, however will see some very significant expansion of AT&T's networks. AT& T says it will nearly double 3G network capacity in most markets via additional spectrum at 850MHz and will upgrade HSPA at other frequencies from 7.2Mbps to 20Mbps.

AT&T's U-verse FTTH/FTTN network will also be expanded. Plans are to pass 30 million units up from 17 million today, but AT&T has not said how many of these wil be reached in 2009. Its DSL network will also be expanded.

AT&T is also planning customer trials leading toward general availability of its 3G MicroCells which will use femtocells and home broadband connections to enhance in-building wireless coverage. It will also expand its WiFi footprint and infrastructure, from the 20,000 hotspot footprint created in 2008 with the acquisition of Wayport.

In the US incumbents hold sway
AT&T's announcements, and similar statements from other major players might give the impression that all is well but J Scott Marcus, a consultant with Germany's WIK Consult who was in Australia last week as a guest of the Competitive Carriers Coalition, disagrees. He says that a series of poor regulatory decision in the past decade has hobbled competitors, boosted the market power of the incumbents and encouraged their consolidation into even larger and more powerful players.

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