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Last updated: Thursday, December 10, 2009

In an address at a USB conference in New York Wednesday, AT&T executive Ralph de la Vega told investors that the performance of the wireless provider’s 3G network is being strained by the heavy data demands of a relatively small number of smartphone users. Just three percent of all AT&T network users are consuming 40 percent of the carrier’s capacity, he said. AT&T’s mobility strategy put advanced wireless data service at the center of the customer experience, de la Vega noted. “As a result, twice as many smartphone customers have chosen AT&T versus any of our competitors,” AT&T’s head of consumer services said. “The U.S. now leads the world in smartphones, and AT&T leads the U.S.” On the downside, the carrier’s 3G capacity is being strained by the heavy demand from iPhone data users, which comes as no surprise to Gartner Research Director Akshay Sharma. But the problem is “not unique to AT&T; it’s a coverage and capacity issue” facing all the major carriers, Sharma said. The Need for Network Upgrades Given the continuing popularly of mobile data devices, wireless networks around the world will need to be re-engineered with always-on and higher data capabilities, Sharma observed. “This means more base stations, perhaps via femtocells in the building, fatter backhaul pipes, and better service-provider routers in the core networks,” Sharma explained. AT&T has held exclusive U.S. rights to Apple’s highly successful iPhone since the trailblazing device launched in 2007 and handled a record number of iPhone activations in the third quarter. However, the constraints involved in handling so many data devices have become obvious. De la Vega said AT&T is targeting network upgrades in two markets where “performance is at a level below our standards: Manhattan and San Francisco — especially in the financial center.” In San Francisco, AT&T “has some micro-cells that need…

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AT&T Scrambles To Upgrade as Data Strains Network

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