The second largest provider of wireless services in North America, AT&T Inc. (T) has announced its network enhancement program to facilitate 4G wireless speeds in Greater Cincinnati, Ohio.
The upgrade program is incorporated in the company’s 2011 $19 billion capital investment in its wireless and wireline networks and other capital projects.
AT&T has already invested $1.4 billion through 2008–2011 in the Ohio region, of which $70 million forms a part of the Cincinnati network enhancement.
To achieve 4G network speeds, AT&T will install improved backhaul connections, which carry traffic between cell sites and the company’s nationwide network, to approximately 100 cell sites in the region. It will position a minimum of 10 new cell sites and make other improvements like deploying distributed antenna system networks at Great American Ball Park and Paul Brown Stadium to enhance network coverage.
AT&T is the only company that delivers 4G services using both High-Speed Packet Access Plus (HSPA+) and Long-Term Evolution (LTE) technologies. The company has completed the deployment of HSPA+ to virtually 100% of its mobile broadband 3G network, which enables 4G speeds when combined with Ethernet or fiber backhaul. The company is rapidly expanding Ethernet and fiber-to-cell sites nationwide and expects that nearly two-thirds of its mobile broadband network will be on expanded backhaul.
Further, AT&T plans to roll out LTE-based 4G technology which will offer a peak speed of 100 Mbps and cover 70 million – 75 million people by the end of 2011. The company is expected to enhance its 4G technology mobile broadband services through spectrum licenses that will encounter intense competition over the iPhone.
In this context, the company has agreed to acquire mobile television spectrum licenses in the lower 700 MHz frequency band for $1.93 billion from Qualcomm Incorporated (QCOM). AT&T will gain the rights for wireless spectrum licenses during the second half of 2011, which is subject to regulatory approvals and other customary closing conditions.
Companies like Verizon Wireless, a subsidiary of Verizon Communications Inc. (VZ), are also focusing on introducing LTE-based 4G technology to networks covering Troy, south of Cincinnati. This will further intensify competition between the two companies that aggravated with Verizon selling the iPhone.
We are currently maintaining our long-term Neutral recommendation on AT&T supported by a Zacks # 3 (Hold) Rank.
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