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.
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.
- see this Forbes article
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