AT&T: Wi-Fi will be in all of our small cell deployments

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Wi-Fi will play a crucial role in AT&T's (NYSE: T) multibillion-dollar initiative to increase the density of its wireless network, according to one of the operator's top executives.

"Our objective for 2014 is that we won't do any small cell or in-building systems that don't include Wi-Fi," said John Donovan, senior executive vice president, AT&T Technology and Network Operations.

That means AT&T's Wi-Fi footprint stands to grow significantly as the operator engages in Project Velocity IP (or VIP), the multibillion program announced last fall under which AT&T will deploy more than 10,000 new macrocells, 40,000 small cells and 1,000 distributed antenna systems (DAS) throughout its service footprint.

Citing AT&T's plan for a "significant material shift toward small cell technology," Donovan said, "We expect that over half of our densification over the next three years is going to be the result of deploying small cell technology."

Donovan, in remarks at the Citi Global Internet, Media & Communications Conference in Las Vegas, said AT&T is working to provide the best network for whatever the task at hand. "The wizard behind the curtain there is that we've got to get the right devices on the right network to get the maximized performance," he added.

AT&T has seen demographic differences in how customers employ its Wi-Fi networks. The operator has Wi-Fi venues that might generate offloads from the cellular network of 3 percent to 5 percent of megabytes consumed on site, while other venues with exactly the same infrastructure will see cellular offload rates of 20 percent simply because they attract a different demographic of customers who are more knowledgeable about using the technology, said Donovan.

He noted AT&T is working to make the transition between cellular and Wi-Fi networks more seamless and automatic and to steer devices to approved Wi-Fi networks that will deliver the most reliable service.

On the 4G front, Donovan announced that at year-end 2012, AT&T had extended its total HSPA+ footprint to 288 million POPs and its LTE footprint to more than 170 million POPs. As part of Project VIP, AT&T intends to expand LTE to 300 million POPs by the end of 2014.

The operator is also working to bring core elements of the network closer to the customer. Donovan said one reason AT&T's LTE network has not suffered massive outages during its rollout, such as those which plagued other LTE operators, is because AT&T fully distributed the network core in order to enable low latency, which also improved reliability.

AT&T appears strongly positioned to leverage its wireline assets to improve its wireless service, a key driver of the $14 billion Project VIP effort, which also includes massive wireline investments. "What we're most excited about is the integration across wireless and wireline," said Donovan.

"At the end of the day, the wireless network has a tremendous wireline aspect to it, and the packets are much more efficiently and economically carried in the ground than they are through the air," he said.

Wireline assets will be especially important for backhauling small cells. "As you get to a denser grid, you have higher dependence on a wireline network," said Donovan.

He cited Orange County, California, as a prime example of how AT&T's extensive broadband and Internet TV footprint can benefit its wireless business. If one looks at the preferred locations for small cell sites in the county, 40 percent of those sites could be served by the fiber that AT&T intends to install for its U-verse broadband network.

Densification of the wireless grid is a major emphasis for AT&T  because it will help the operator stay ahead of data demand and will enable the launch of reliable voice over LTE (VoLTE) and Rich Communication Services (RCS), added Donovan.

Donovan also discussed AT&T's ongoing efforts to improve wireless customer experience. "We have been, as everyone knows, laser-focused on trying to get in front of our capacity requirements in our smartphones. We're really proud of the fact that last year we did a really good job at reducing the dropped calls," he said, noting a 32 percent improvement over the course of 2012.

The AT&T executive touted the architectural choices made by the operator, which have enabled it to deliver a seamless transition between HSPA+ and LTE. AT&T, he said, also dedicated considerable effort toward ensuring that only one radio at a time is drawing handset power, thus extending battery life.

Donovan noted that 90 percent of AT&T's mobile data is carried over Ethernet backhaul. He added that the operator's decision to use integrated radio designs that place active electronics atop cell site towers along with the antennas has provided advantages in latency and data speeds.

AT&T is poised to be a pioneer in carrier aggregation, mainly because it is already using multiple frequency bands for LTE. Kris Rinne, executive vice president of network technologies at AT&T Labs, has previously said AT&T will initially look to combine its 700 MHz spectrum and AWS spectrum.

Donovan said AT&T expects that by late 2013, its infrastructure will be ready for carrier aggregation. However, customer devices will need to include new chipsets to support carrier aggregation. "We have some choices in the short run that we're going to make around the sequencing of how you do this," he added.

At the Citi investment conference, Donovan was asked if he believes LTE can be a substitute technology for low to medium-use DSL services. He said AT&T prefers to expand the footprints of its U-verse broadband and IPDSLAM (high-speed Internet access and VoIP) networks, but he indicated LTE could play a fixed broadband role.

"We anticipate LTE will be a broadband coverage solution for a portion of the country. We just haven't yet gotten to the point where we've got enough experience under our belt to know exactly what that footprint is going to be. But there's no question as we extend ourselves from 75 percent of the footprint to 99 percent of the footprint in a region that we're going to be using LTE for some of that broadband," said Donovan.

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