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AT&T plans $2bn wireless overhaul

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AT&T has acknowledged that its US wireless service is in need of an upgrade, and the company is putting its money where its apologetic mouth is, allocating an additional $2bn or so to upgrade its network in 2010.

"Wireless is our No. 1 investment priority," John Stankey, head of Big Phone's operations division, is quoted by the Associated Press as saying.

The AP also noted that during AT&T's conference call with reporters and analysts after the announcement of the company's financial results for the fourth quarter of 2009, Big Phone execs spent "an unprecedented amount" of time and effort defending their beleagured network and talking about how they plan to improve it.

The iPhone, of course, was cited as a main drain on the network, and the execs admitted that its heavy usage in New York and San Francisco has dropped service below a level they would like to maintain.

So they're planning to spend between $18bn and $19bn in capital expenditures during 2010. While the company didn't give an exact figure as to what portion of that outlay would be for wireless, it did say that the increase in wireless spending would be in the neighborhood of $2bn, accoring to the AP.

That money will be spent not only on more cell towers, but also on the all-important backhaul fiber-optic lines that connect those towers to AT&T's backbone, in support of Big Phone's ongoing upgrade to 7.2Mbps HSPA (high-speed packet access) and in preparation for future LTE deployment. According to the company's Investor Briefing (PDF), released Thursday, by the end of 2010, the company expects that the majority of its mobile data traffic will be carried over the expanded fiber-based HSPA 7.2 and LTE-capable backhaul.

And the company should have to money to pull that off. According to its fourth-quarter results, Big Phone pulled in a total of $123bn in 2009, down a mere 0.8 per cent from 2008's $124bn. ®

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