AT&T: Traffic on HSPA+ network 'has peaked'

AT&T Mobility (NYSE:T) CEO Ralph de la Vega said that traffic on the company's HSPA+ network has peaked as more and more customers are using LTE devices. The announcement comes as AT&T is starting to refarm some of its 1900 MHz PCS spectrum for LTE service.

Speaking today at the Wells Fargo Tech, Media & Telecom Conference, de la Vega said the company's "traffic on HSPA+ has peaked and is on the decline." As a result, he said, AT&T's HSPA+ network is "performing the best it has ever performed."

AT&T's LTE network now covers more than 250 million POPs and is on track to cover 270 million by year-end and 300 million by mid-2014. Further, AT&T said that at the end of the third quarter 42 percent of its postpaid smartphone customers were using an LTE device.

AT&T has reportedly started to refarm its PCS spectrum for LTE service in New York City. The move is not a surprise: The company said in an August FCC filing it would begin commercial LTE service on its PCS spectrum in initial markets including Baltimore, Dallas, Philadelphia, New York City, San Francisco and Washington, D.C., by the end of this year.

In terms of spectrum, de la Vega said that the company is pleased with its current spectrum position for the short term. In September, AT&T boosted its spectrum holdings in 18 states by consummating a deal announced last January to acquire 39 lower 700 MHz B Block spectrum licenses from rival Verizon Wireless. De la Vega said AT&T has started deploying that spectrum for additional capacity. He also noted AT&T's 2.3 GHz WCS holdings and other smaller deals, but said "based on the demand that we're seeing there's an absolute necessity to go on" with more spectrum purchases, including via auctions.

"We see nothing but increased usage, primarily driven by video," he said.

The FCC is scheduled to begin auctioning several different groups of spectrum licenses next year, including the valuable 600 MHz broadcast TV licenses. Wireless carriers have been fighting for months over whether, in the upcoming 600 MHz broadcast TV incentive auctions, there should be caps on how much spectrum carriers can acquire, with AT&T and Verizon arguing against such restrictions and Sprint (NYSE:S) and T-Mobile US (NYSE:TMUS) generally pushing for them.

De la Vega said that "if you look into the future it really doesn't make sense to restrict companies from bidding on spectrum." He said the goal is "to guarantee the people who are selling the spectrum the best price." If broadcasters think the buyers are going to be limited, he said, they might not think there is enough competition in the market to deliver the best return for selling the spectrum. Ultimately, de lea Vega said, he thinks there will be made spectrum available for every carrier, but that it is unclear how it will be allocated.

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