AT&T to launch LTE Multicast in 2015
AT&T (NYSE: T) expects to begin deploying LTE Broadcast technology, also known as LTE Multicast, sometime in 2015, according to a top AT&T executive.
AT&T Chief Strategy Officer John Stankey disclosed the timeline in an appearance at the Oppenheimer Technology, Internet & Communications Conference. "You should expect that you'll see us begin to roll out Multicast capabilities as we move through next year," he said. "Initially, we'll be doing it on a targeted basis and we'll be doing it in some specific areas where we think there's immediate deployment."
Stankey said that as AT&T gets more scale and normalizes its relationships with content providers, the carrier wants the "flexibility to use that technology on a broader application."
LTE Multicast is based upon evolved Multimedia Broadcast Multicast Service (eMBMS), and it allows the same content to be sent to a large number of subscribers at the same time, resulting in a more efficient use of network resources than each user requesting the same content and then having the content unicast to each user.
Until now AT&T had only disclosed it was "exploring the possibility of offering eMBMS services" using the 700 MHz D and E Block spectrum it acquired from Qualcomm (NASDAQ:QCOM) in 2011.
Verizon Wireless (NYSE: VZ) plans to start seeding its device base with phones that can support LTE Multicast in the fourth quarter and also plans to commercially launch the service in 2015. Speaking at the same conference earlier this week, Verizon Communications CFO Fran Shammo called the advent of Multicast "the pivotal point that starts to change the way content is delivered over a mobile handset which opens up content into the wireless world."
Stankey expounded on AT&T's philosophy of how wireless customers' relationship to mobile content will change over time. "Inherently, customers want to be able to watch and entertain themselves wherever they are, under their terms," he said. He added that "the reality of the industry today and how content is licensed and sold doesn't fit elegantly into that model."
The AT&T executive said that he thinks there is a strong customer desire to get content any time they want and "there's a willingness to pay." He said he thinks the content delivery model "is going to change pretty dramatically."
As the wireless market matures and growth from smartphones and tablets slow over the next few years, Stankey said, the "basis of competition will shift onto other terms. We know that what customers want to do with their mobile devices is they want to entertain themselves." He said that video and to a lesser extent music are what drives the bulk of wireless data traffic.
"It's important that we understand how customer buying decisions are going to be linked to content over time," he said, noting that a top reason customers buy broadband today is linked to TV services in their homes. "I think over time in the mobile space there will be a tighter link to aspects of what kind of content people can consume and how easily they can get at what they want to watch."
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