AT&T Says Wireless Industry Is At 'Critical Point'


On Tuesday at the CTIA Wireless conference, Ralph de la Vega, president and CEO of AT&T's wireless and consumer markets, acknowledged that carriers must quickly upgrade their networks to meet consumers' rapidly growing appetite for bandwidth, but said cooperation from handset makers, application developers and government agencies will also be needed.

"We're at a critical point in the industry," De la Vega told CTIA attendees, as reported by The Wall Street Journal. "There's no silver bullet for meeting demand."

The FCC's efforts to get broadcasters to relinquish unused spectrum will help, but the government must tread lightly in its regulation of carriers so as not to derail their profitability, De la Vega said. Technologies like Wi-Fi and femtocells can also be used to augment wireless networks, he said.

At an investor conference in December, De la Vega said that 3 percent of AT&T's smartphone customers were accounting for 40 percent of the carrier's wireless data traffic, and vowed to "fix" the situation. The implication was that customers wouldn't always be allowed to run roughshod on AT&T's network by running bandwidth-gobbling applications in all-you-can-eat fashion.

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That didn't go over so well with AT&T customers, and so De la Vega has apparently changed his tack. "AT&T knows consumers are very frustrated with the dropped calls and congestion on their network, and so he's framing it as an overall industry capacity issue," said Quy Nguyen, CEO of Allyance Communications Networks, a solution provider in Irvine, Calif.

"Carriers have focused and continue to focus on being a pipe for data. Now that demand is literally torching their networks and taking down their pipes," said Alan Gould, president and CEO of Westlake Software, a wireless solution provider in Calabasas, Calif.

Some industry figures have zeroed in on application developers and handset makers as bearing much of the responsibility for the looming bandwidth crunch. Last month, Research In Motion co-CEO Mike Lazaridis spoke out in support of carriers on this issue. "Manufacturers had better start building more efficient applications and more efficient services. There is no real way to get around this," Lazaridis told Reuters.

Steve Beauregard, president of Santa Monica, Calif.-based mobility solution provider Regard Solutions, agrees with this stance. "Application developers by and large are pumping out poorly designed apps at a ridiculous rate without any quality control," he said. "To me, the best apps are ones that use the least network bandwidth."

The problem at this point is that consumers are now accustomed to the availability of mobile applications, and they're going to expect carriers to make network capacity investments to support their needs, according to Nguyen.

"I don't expect a pushback on application developers," he said. "Carriers are going to be seen as the bad guys here if they fail to upgrade network capacity."