AT&T's Stephenson: iPhone changed how we think about spectrum

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AT&T (NYSE:T) CEO Randall Stephenson credits Apple's (NASDAQ:AAPL) iPhone with making the operator realize it needed to change its network architecture and massively boost its spectrum holdings.

Randall Stephenson ceo AT&T

Stephenson

AT&T was named as the exclusive distributor for the first iPhone in January 2007, and once customers were able to buy the device, AT&T found itself deluged by data traffic volume that "went beyond any rational expectation we could have ever put together," said Stephenson in a wide-ranging interview with Forbes.

The experience led AT&T to begin formulating plans for building a dense cellular grid and acquiring additional spectrum. "It hit us very clearly we were going to have a whole different level of spectrum in our business, in our portfolio, than anybody had ever anticipated," said Stephenson, who added that over the next 18 months, AT&T spent somewhere around $9 billion for additional spectrum licenses.

Spectrum was at the heart of AT&T's effort to acquire T-Mobile USA in a deal that was eventually canceled in December 2011. AT&T continued its hunt for spectrum during 2012, leading it to pursue spectrum in the AWS and repurposed 2.3 GHz WCS bands. In late December, the FCC approved AT&T's effort to acquire AWS and WCS frequencies via multiple deals the company had assembled throughout the year.

AT&T's CEO also addressed the company's recently announced $14 billion Project Velocity IP (or VIP) investment path for wireless and wireline. In early November, the operator said it would commit $8 billion to significantly expand its wireless broadband networks and $6 billion to do the same for its wireline footprint.

Ironically, the more wireless-focused AT&T becomes, the more it has had to focus on its wireline business, which provides crucial backhaul. "Basically all you're doing is building this big massive fixed-line network with wireless antenna's hanging on the end of it. So the ability to have all of this fiber deployed around the country is really powerful," said Stephenson.

For more:
- see this Forbes article

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