The Problem With 4G And What AT&T Is Doing About It
It sounds like AT&T’s Randall Stephenson learned something from the vicious attacks by Verizon Wireless over the past year, which compared the two companies’ 3G maps and coined the phrase “There’s a map for that.”
AT&T (NYSE: T) is often criticized for having a poor 3G network, and now it’s perceived as being behind the curve in building out a 4G network, but what the chairman and CEO said today at Goldman Sach’s Communacopia Conference in New York City, made a lot of sense. “You’ve got to have a broad ubiquitous experience, regardless of where you are in building out your 3G or 4G footprint.”
To be sure, the 4G networks being built today are far from ubiquitous. The pockets and holes are significant. On one block, you’ll get 7 megabytes per second, and on the next, you’ll drop altogether. It may not work indoors, on mountain passes or as you travel from city-to-city. Ultimately, 4G will be faster in ideal environments, but carriers should be careful when setting the consumer expectations. Not to mention, it won’t solve dropped calls, coverage gaps and slow speeds experienced on 3G networks today. It will only improve speeds, where it is thoroughly built out.
To that end, Stephenson outlined a plan that intends on counteracting this problem: It will upgrade its entire 3G footprint to support HSPA+, a technology that can deliver 2 to 3 mbps. Then, it will layer on LTE, which can offer 7 to 10 mbps. He said if he can’t deliver broad ubiquitous coverage of 7 to 10 mbps, then falling back to 700 kilobytes per second “is an unacceptable experience,” he said. “To fall back to two to three [mbps] is really important.” Stephenson said AT&T will reach around 70 to 75 million people with its LTE network by next year, and while that’s a smaller footprint than Clearwire (NSDQ: CLWR), Sprint (NYSE: S) and Verizon Wireless have planned, it will also be of smaller consequence — if his logic holds true.
In the meantime, Clearwire is already showing signs of having to juggle unsatisfied customer experiences despite already covering 54 U.S. markets. In its second-quarter, it reported churn of 3.2 percent, which it explained was high because of customer’s perceptions of their network experience, according to the company. In other words, 3.2 percent of customers canceled their contract when the service didn’t meet their standards. In a Seeking Alpha transcript of its Q2 conference call, Chief Commercial Officer Mike Sievert explained: “As we finish the network and as we continue to add site in the cities where we
“On one block, you’ll get 7 megabytes per second, and on the next, you’ll drop altogether.”
It’s millibauds per second, not megabytes.
Regardless if they offer dual modes to fallback from 4G to 3G, 3G on Clearwire is about 30% slower than AT&T’s 3G. I purchased both products for test and saw how Clearwire speeds were a lot worse than AT&T. 4G was still slower than AT&T’s 3G and if I found a good signal for 4G on clearwire, it was only about 0.50 Mb/s faster than 3G. Quite a disappointment.