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Is Anyone Worried About AT&T's Wireless Infrastructure?

|Includes: AT&T Inc. (T)

If you were looking for rosy numbers on how many iPhones AT&T (NYSE: T) activated during the second quarter of 2010, the company's financial conference call Thursday was right up your alley: 3.2 million new iPhones activated, part of another big increase in smartphone users on AT&T's network.

But if you were looking for some equally hard statistics on how AT&T planned to handle the increase in traffic while also improving its previous poor network performance -- you might want to consult a Bible instead. Instead of delivering actual numbers about, say, the number of new backhaul lines installed, new fiber connections or actual numbers of new towers sited, AT&T execs on the call today fell back on the faith-based methods of accounting practiced last week by company CTO John Donovan, who pledged that Ma Bell would "move heaven and earth" to stay in front of user demands.

Unless you live in San Francisco, that is, where moving celestial spaces and large chunks of terra firma will come 90 days after those tasks get completed in New York City, according to AT&T Thursday. So despite claims back in January that the company was doing all it could to improve network conditions, moving heaven and earch apparently isn't that easy even when your revenues are in the billions of dollars per quarter.

While you are sure to see some of AT&T's "network improvement" statistics quoted without any questioning by numerous news outlets, the math behind the charts is the kind that would fail you from any decent statistics class. According to AT&T's presentation, data download speeds in New York have improved by 31 percent. And there are fewer dropped calls, too. The problem is, without actual numbers telling us what those figures relate to, the "improved" statistics are meaningless. "Improved" could mean there are three fewer dropped calls, or three million fewer dropped calls -- by only giving half the number, AT&T continues to obfuscate its network problems to the point where consumers and investors can't really tell what's going on.

But like we asked before, does anyone care? Apparently not, with iPhone customers continuing to arrive in droves. Apparently the stock market types think AT&T's network is just fine and dandy too, since none of the analyst questions on the call touched on the backhaul or capacity issues. To us, the math just doesn't seem to add up -- how can you keep adding millons of new high-capacity customers to an already-strained network and not talk clearly about how you're expanding internal capacity to handle the growth? We sure hope these aren't the same types of questions that were being ignored when BP and others assured everyone that offshore oil drilling was safe and sound. But if your iPhone stops working or can't find enough bars, you can't say you weren't warned.

(In other news of interest, AT&T said it would begin LTE trials in "the next few months," and would deploy LTE sometime in 2011, on schedule pretty much with what the company had said before.)

(The author has no positions in any stock of any company mentioned.)


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