Donovan on AT&T Wireless Deployment Plans: Timing is Everything

The economics of cellular network deployments are highly dependent on timing, said AT&T Senior Executive Vice President of Technology & Operations John Donovan today. Donovan illustrated this assertion with several examples in a question and answer session about AT&T wireless deployment plans at the Citi 2016 Internet, Media and Telecommunications Conference in Las Vegas today, which was also webcast.

AT&T is constantly evaluating how quickly a technology can be deployed because expanding network capacity before additional capacity is needed — but not too far in advance –can substantially impact profitability, Donovan noted. “We focus a lot on that,” he said.

In forecasting wireless demand, Donovan noted that AT&T has become more conservative than in the past. Growth will slow, he said, because “people run out of hours of the day” when they can use their wireless devices.

AT&T Wireless Deployment Plans
Being one of the first adopters of new technologies may not be the best choice in terms of profitability, Donovan noted.  He pointed to fixed wireless and 5G as technologies for which AT&T expects to see economics improve and therefore is not moving aggressively at this time.

AT&T is keeping its eye on fixed wireless as a possible means of offering broadband outside its traditional serving area, Donovan said. But at present, he said fixed wireless is a “second inning game – it will evolve the same way fiber did; there will be a lot of folks trying to improve its capability.”

As for fifth-generation 5G wireless technology, Donovan said, AT&T “can wait until the 5G curve is better.” Today’s networks are fast enough for most users, he said, adding that “speed hasn’t been a successful marketing” approach.

Technology advances and customer demand aren’t the only factors that can impact deployment plans. Donovan noted, for example, that AT&T did not have to deploy as many outdoor small cells as the company initially forecast because it was able to deploy macrocells in the target areas sooner than expected as a result of “shot clock” tower siting guidelines established by the FCC.

AT&T’s small cell investment requirement has been less than for some other carriers because of a past decision that caused difficulties at the time, Donovan said. When AT&T chose GSM for 2G, the company found that it had to install cellsites more densely in comparison with competitors that opted for CDMA. The reason was that CDMA provided better voice coverage at the edge of a coverage area.

“We had to densify early,” said Donovan.

More recently, that early investment has minimized the investment AT&T has had to make in small cells, he noted.