AT&T Charts New Spectrum Path

by Matt Klassen on November 8, 2012

With its sure-fire home-run acquisition deal for T-Mobile having been snatched out of the air by Federal regulators, over the last year AT&T has been forced to find alternative solutions to its desperate spectrum situation as it continues to grow its 4G LTE network. At an investor conference earlier this week, company executives were confident, however, that the company is better positioned than it was at the beginning of last year, with the company, to keep the baseball analogy alive, hitting spectrum singles and doubles, signing smaller deals instead of pursuing larger landmark acquisitions.

So despite how desperate AT&T made the spectrum crisis seem just over a year ago, it looks like the future is bright and rosy for Ma Bell, with investors getting the message that America’s second largest wireless carrier has the resources to compete (and perhaps dominate) the growing 4G LTE market for a least a few years to come.

But as is often the case when talking about spectrum, AT&T execs were also quick to point out that the crisis continues, and unless the FCC moves quickly to free-up more spectrum (and make it available to AT&T) this new piecemeal strategy will yet again be only a temporary Band-Aid solution.

There’s no question that AT&T, like every other carrier in the American market, is in need of additional spectrum to meet the countries growing network demands. Further, the advent of 4G LTE, a technology carriers hoped would alleviate some network strain, has been met with a concomitant increase in data usage again, and so the crisis continues.

In fact, Ma Bell’s entire premise behind its failed acquisition bid for rival T-Mobile was that it simply had no other spectrum solutions; it needed what T-Mobile had in order to remain competitive. Its here, however, that I usually start to take issue with such claims, as there’s no question that acquiring additional spectrum is the easiest solution to the crisis, I’m still not convinced it’s the only solution.

That said, AT&T still considers spectrum acquisition to be its only true saviour, and so following the T-Mobile fiasco the company was forced to, in the words of company Chief Strategy Officer John Stankey, “chart a new path.” But in case one thought that such a ‘new path’ might bring with it renewed interest in developing network technologies that better utilize the extant spectrum, for AT&T it means more than anything that it has stopped trying to swing for the fences, content to get men on base through a myriad of smaller spectrum deals.

To that end, this year alone AT&T has entered into 40 new spectrum deals, some already approved with others still going through the regulatory process. It’s an opportunistic strategy, Stankey explains, that will situate AT&T well in the mobile market for the next two years, after that the future becomes a lot more uncertain.

But all hope isn’t lost, as AT&T’s strategy does, surprisingly, include things it can do to improve how it uses the spectrum is has. “Over the long term we’ll look to FCC to move expeditiously to locate, clear, and auction new spectrum,” Stankey said, adding, “In the meantime, our research organization has to work independently to improve spectral efficiency.” An admission that gives me some hope, at least, that AT&T is not merely an insatiable spectrum glut.

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Written by: Matt Klassen. Follow by: RSS, Twitter, Facebook, or YouTube.

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