AT&T’s 700 MHz Strategy: LTE

The open access restrictions mandated by the Federal Communications Commission on portions of the recently auctioned 700 MHz spectrum were among the main reasons AT&T chose not to bid for that spectrum but opted instead to pay more for that of the B-Block, which complements the slice they bought from Aloha Partners, according to AT&T Wireless President and CEO Ralph de la Vega.

Verizon Wireless paid $4.74 billion for a majority of the C block spectrum, while AT&T picked up 227 licenses in the B block of regional licenses. Verizon forked out $9.63 billion on spectrum licenses, and AT&T ponied up $6.64 billion. Some on Wall Street have criticized AT&T for paying too much for the Aloha Partners slice of the 700 MHz spectrum, but it seems like AT&T thinks paying a premium so it doesn’t have to share the network with others was worth it. “Our strategy was to acquire the spectrum that complemented our spectrum we acquired from Aloha,” de la Vega said on a conference all with reporters.

He pointed out that the company has enough wireless spectrum to cover 87 percent of the total U.S. population and 100 percent of the nation’s top 200 cities. Also during the call, AT&T officials said the 4G LTE wireless broadband networks based on the 700 MHz spectrum will roll out in 2012. De la Vega said the company has a road map to push the 3G speeds quite high — up to 14.4 megabits per second. (I am checking on this bit as my notes got a little smudged, the risk you run when writing with an old-fashioned ink pen.)

(I will update with details from interviews with AT&T executives.)

When I asked de la Vega whether AT&T would work with anyone outside of their traditional vendors, he said the company wants to explore all options and would be open to working with new suppliers, especially if they have interesting technologies and price points. In other words, don’t be surprised to see some Asian vendors bidding for the 700 MHz business.