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AT&T leader discusses merger

June 22, 2011


A traffic increase of 8,000 percent will clog any highway, Mayo Flynt said, including the information superhighway.
Flynt, president of AT&T Mississippi, said that’s the traffic increase AT&T has faced in the four years since Apple partnered with them to release the first-generation iPhone. More and more people have bought smart phones of all kinds since then, he said, and those smart phones use more and more data, generating more and more traffic. He said it is only the beginning; AT&T’s projections call for eight to 10 times more traffic in 2015 than in 2010.
“An 8,000 percent increase in traffic on 82, how would you manage that?” Flynt said. “What would the Department of Transportation do?”
This traffic issue is chief among the reasons Flynt discussed for AT&T’s acquisition of T-Mobile in an audience with Starkville Daily News, one of several audiences with media outlets that AT&T executives are conducting across the country to shed more light on the merger.
The merger is pending regulatory approval from the FCC, approval Flynt said was likely to come in the first quarter of 2012.
Each cell phone carrier transmits calls, text messages and other data through portions of the radio frequency spectrum the FCC licenses to them through auctions. AT&T and other carriers have a limited supply of spectrum to transmit the burgeoning data, Flynt said, resulting in a “spectrum crunch.”
“There are things that we can do to manage the network to be more efficient, but at some point you need more spectrum,” Flynt said. “That process is a multi-year process. Congress typically has to authorize the use of the spectrum. It might be re-allocating it from some other user; we went through that a few years ago with the digital transition for broadcast.”
Meanwhile, Flynt said, the FCC has said data flow could outstrip mobile capacity by 2013. AT&T needed spectrum space faster than they could get it through the multi-year process, he said, and when the company looked at other options for a spectrum boost, acquiring T-Mobile and its existing spectrum holdings was the best option.
“T-Mobile’s spectrum holdings lay down very neatly with ours,” Flynt said. “Their block of spectrum is next to our block of spectrum. By combining their spectrum with our spectrum, we can actually mine more capacity out of the spectrum than we could if these blocks were operating independently.”
A second reason T-Mobile is a good fit for AT&T, he said, is both companies currently use the same 3G network technology, called High Speed Packet Access. Customers with both companies will see the benefits of this compatibility once the merge goes into effect, he said, because they will see none of the service disruptions that can happen during other adjustments of equipment, such as a coverage area’s transition from 2G to 3G.
“When you upgrade from 2G to 3G, you’re taking some of that spectrum capacity away from the 2G service, and you’re moving it to the 3G service,” Flynt said. “So, during the transition, the 2G service does degrade briefly, until the 3G is turned up.”
With this merger, Flynt said there won’t be much swapping of equipment or translation from T-Mobile’s network to AT&T’s.
“It would be a very neat combination of actual architecture and infrastructure of the network,” Flynt said. “It should not disrupt their service, because the networks are running on the same technology. It’s not going to be a hard transition for those customers.”
AT&T will also help T-Mobile customers with the transition through compatibility with T-Mobile’s entire suite of phones, allowing customers to keep the phones they bought with the company. He also said customers will be able to keep their rate plans without the prices going up, although he said AT&T can’t commit to those plans indefinitely.
Finally, he said, the merge will bring customers better service.
In the long term, he said it has opened the door for AT&T to bring 4G mobile Internet service to 97 percent of U.S. citizens, including one million Mississippians, within approximately six years. In the shorter term, he said, the broader spectrum space will reduce issues he acknowledged AT&T customers currently face.
“If you’ve got capacity issues, you’re going to have more dropped calls, you’re going to have slower downloads, and that’s why we want this merger to be successful,” Flynt said. “It’s going to affect user experience. We have more smartphones on our network than any of the other providers; that’s no secret. We’re really at the point of the spear as far as this data explosion. The other carriers will not be immune to it; it’s just that we happen to be out front.”
Once AT&T completes its plan to make 4G available to most Americans, Flynt said rural communities like those in and near Oktibbeha County will benefit the most. He said the plan is AT&T’s answer to the call President Barack Obama made in his State of the Union address to make broadband Internet available to all Americans. Achieving that goal is more feasible with wireless 4G networks than with conventional, wire-based DSL or cable Internet service, he said.
“Maybe there’s some kind of topographical or geographical reason why it’s difficult to provide the service to them,” Flynt said. “Those of us in the industry have all believed that wireless was eventually going to be the solution for those customers because the economics of a wired product are so high. It’s just more difficult to justify it from an economic basis, but with wireless, you can do that.”
Flynt said 4G service in rural areas would not only provide direct boosts to the areas’ economies, but also indirect boosts to the areas’ education.
“I’m not talking about formal education at this point,” Flynt said. “I think we all understand the benefits of online learning. I’m talking about the informal education of learning how the digital world works, and the fact that the way people communicate tomorrow is already very different than the way I learned to communicate. If you’re going to be competitive in that world, you’ve got to know how that works. So if you’re growing up in a rural area, this is going to provide you access to that.”

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