AT&T looks to refarm 2G spectrum, urges customers to upgrade

AT&T Mobility (NYSE:T) has started telling a small number of customers using 2G-only phones that they should upgrade their devices--part of a move by the carrier to lay the groundwork for refarming its 1900 MHz PCS spectrum.

AT&T in recent weeks sent out letters to a small number of customers in the New York City area, telling them they should look to upgrade to 3G-capable devices on the company's HSPA+ network. "Your current, older-model 2G phone might not be able to make or receive calls and you may experience degradation of your wireless service in certain areas," AT&T cautioned in the letters. New York City in the past has been a trouble spot for AT&T, and the carrier during the past several months as invested in boosting its capacity there.

The carrier noted that that it is still supporting its 2G network, that the program is entirely voluntary and that only a small number of customers are affected. However, AT&T spokesman Mark Siegel told MarketWatch that the company may send out the letters to more subscribers and that the company intends to reuse some of its 2G spectrum for other services. "We're simply urging them to upgrade to a new device if they want to," Siegel said. AT&T told GigaOM that it is offering these customers free 3G devices.

Refarming spectrum is nothing new, but AT&T may be refarming its PCS spectrum in lieu of getting new spectrum from a competitor or through auctions.

Incidentally, AT&T is in the process of transferring AWS spectrum to T-Mobile USA. As part of T-Mobile's move to LTE, the company intends to deploy HSPA+ in its 1900 MHz spectrum, which it is currently using for 2G GSM services (the carrier's HSPA+ network currently runs on T-Mobile's 1700 MHz AWS spectrum). T-Mobile has said it will continue to support 2G customers as it refarms the spectrum and has no plans to decommission its 2G network.

Recon Analytics analyst Roger Entner said that in addition to getting customers to move to the company's HSPA+ and LTE networks, where they may use more data services and generate more revenue, AT&T is looking to give customers a better experience. When customers buy a new phone, especially one with more advanced capabilities, their satisfaction usually shoots up, he said. "What they are doing is they are going pro-actively out to get people off the phones that make people unhappy," he told FierceWireless.

Entner said AT&T is "absolutely" going to try and refarm 2G spectrum for HSPA+ services. "Then you might be able to use more of the GSM spectrum to 3G spectrum," he said. "You always will leave a little bit of GSM up, especially for international roaming."

For more:
- see this MarketWatch article
- see this GigaOM article
- see this Phone Scoop article

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