AT&T to expand LTE network to 300M POPs, deploy at least 40,000 small cells

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AT&T Mobility (NYSE:T) unveiled a multibillion-dollar initiative, called Project Velocity IP (or VIP), that calls for the company to expand its LTE network to 300 million covered POPs by the end of 2014 and deploy more than 10,000 new macrocells, 40,000 small cells and 1,000 distributed antenna systems (DAS) throughout its network.

The plan, which also includes several wireline initiatives, also calls for AT&T to use spectrum that it acquired through 40 transactions (many of which were in the secondary spectrum market) plus the company's 30 MHz of WCS spectrum.  

AT&T revealed details of its Project VIP plan during an investor conference this morning.  John Donovan, AT&T's senior executive vice president of technology and network operations, touted the company's existing wireless network, and said that the company's expansion of LTE to 300 million POPs will include a "densification" of the network, meaning that the additional macro cells, small cells and DAS will allow AT&T to improve spectrum efficiency, build more cost-effective radio access networks and improve in-building coverage. He added that this densification will also support Voice over LTE.

"Our small cell strategy is aggressive," Donovan said. "We will not just deploy LTE small cells but also across other technologies such as UMTS and HSPA+." Donovan said the small cell deployments will begin this quarter with the first field application and a more general deployment in first quarter 2013. He also said that small cells with LTE and Wi-Fi will be deployed in 2014.

AT&T also talked about its plans for growing its mobility business. AT&T Mobility CEO Ralph de la Vega said that the company believes it can maximize the wireless platform for new revenue growth and is focusing on four key products and services. One product is AT&T's Digital Life home security and automation service, which AT&T plans to launch commercially in early 2013. De la Vega noted that the home security and automation business is an $18 billion industry and he believes it will bring margins in the 35 percent to 40 percent range. 

A second area for growth in the mobile premises solution—AT&T currently offers a home phone that uses the wireless network to complete calls instead of  landline.  De la Vega said future iterations of this product will allow consumers to share wireless minutes with their family talk plans. AT&T has recently expanded it nationwide and plans to expand it to include data services as well as voice.

The third area for growth is mobile payments. De la Vega touted the company's role in Isis, the mobile payment joint venture it launched with T-Mobile USA and Verizon Wireless (NYSE:VZ). He said that the JV provides access to more than 200 million wireless subscribers and noted that it has started market trials in Salt Lake City, Utah and Austin, Texas.

The final growth area highlighted was connected car. De la Vega said that by 2016, 53 percent of new cars are projected to be connected. He hinted at several key deals that AT&T has signed in this area but declined to provide more details.

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