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AT&T switches on first LTE markets, trailing Verizon

CFO remains "confident" over T-Mobile deal but Verizon hits out at US spectrum policy


Published: 16 September, 2011

READ MORE: Spectrum | US | AT&T | LTE

The US mobile market may be in regulatory turmoil, but senior executives retain a Pollyanna-like optimism. Last week we had LightSquared leaders claiming a deal would be secured within a month for the firm's beleaguered LTE plan; now AT&T's CFO, John Stephens, says he is "confident" that the takeover of T-Mobile USA will go ahead, despite opposition from the Department of Justice.

Stephens said he was confident that AT&T would address the DoJ's antitrust concerns over the $39bn deal. "Support for the merger remains deep and strong," he told a Bank of America Merrill Lynch conference. "We still believe in the benefits of the deal."

Much of AT&T's desire to buy TMo is to gain additional spectrum for its LTE roll-out, but the larger operator is pushing ahead with 4G anyway, albeit it on a far more cautious timeline than rival Verizon Wireless. Stephens said AT&T's first LTE markets would be switched on this Sunday, with services in Atlanta, Chicago, and the Texas cities of Dallas, Houston and San Antonio. AT&T plans to add another 10 LTE markets before the end of the year, covering 70m POPs, and promises to launch 20 new devices supporting HSPA+ and/or LTE by year end.

This will leave it well behind Verizon, which is going for a big bang approach to LTE roll-out, partly because it does not have a '3G+' option, like AT&T's HSPA+, for broad mobile broadband coverage. As of its Q2 earnings call, Verizon's 4G network already covered 160m POPs in 102 cities and it plans to reach 185m by the end of this year. Since that call it has gone live in 15 more markets, and expanded coverage in some major cities, and this week it has turned on another 26 markets and boosted capacity in San Francisco, Indianapolis and Cleveland.

As his counterpart at AT&T was looking on the bright side about TMo, Verizon Communications's CFO Fran Shammo was telling the Merrill Lynch event that the government should tighten up on usage rules for spectrum, ensuring companies did not acquire it in order to sit on it and then flip it for a profit. He said the proposed AT&T/TMo deal highlighted the issue, and that the FCC needs to move more quickly to auction licences. He also hit out at spectrum caps saying they restrict innovation.

"Overall, the government has to alleviate the pressure of spectrum and allow the companies who want to acquire it, and build it and innovate, to do that," he said.

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