AT&T has chosen Alcatel-Lucent and Ericsson as its LTE network vendors ahead of the operator's planned 4G field trials later this year. AT&T said it expects to begin commercial deployment of its 4G network in 2011.
Alcatel-Lucent and Ericsson will supply AT&T with equipment for its 4G radio access network domain. Specific financial terms of the deal were not disclosed, but AT&T said in January that its total 2010 capital expenditures (for wired and wireless) would be between $18 billion and $19 billion, including a $2 billion investment in its 3G wireless network and backhaul.
Both infrastructure vendors are current suppliers for AT&T's 3G network. The agreement allows AT&T to upgrade existing 3G equipment and software to LTE in many cases rather than install entirely new equipment.
"AT&T has a key advantage in that LTE is an evolution of the existing GSM family of technologies that powers our network and the vast majority of the world's global wireless infrastructure today," said AT&T Operations President and CEO John Stankey in a statement. "As some competitors move away from their existing investment in niche 3G platforms, we are able to efficiently and quickly move toward LTE while enhancing our existing 3G performance and providing access to a strong ecosystem of customer devices."
AT&T said it would deploy 2,000 new cell sites over the next year in its efforts to boost capacity. The operator upgraded many of its 3G cell sites to HSPA 7.2 in 2009 as part of a plan to bulwark its network against skyrocketing demand for mobile data.
AT&T's vendor announcement came about one year after Verizon Wireless named Ericsson and Alcatel-Lucent as its LTE radio access network vendors. Verizon also named Nokia Siemens Networks and Alcatel-Lucent as the main suppliers for its IMS network and tapped Alcatel-Lucent, Ericsson and Starent Networks for its enhanced packet core.
Alcatel-Lucent President of Solutions and Marketing Kenneth Frank called AT&T's announcement an endorsement of its 4G strategy. The company says it has 40 LTE customer trials secured to date. Alcatel-Lucent also plans to compete for AT&T's IMS and enhanced packet core contracts.
Ericsson has signed commercial LTE contracts with four other major global operators, including AT&T and Verizon, and has an undisclosed number of contracts for LTE customer trials.
Both Alcatel-Lucent and Ericsson have felt the brunt of the global economic crisis. Ericsson's fourth-quarter earnings dropped 82 percent and analysts are keeping a close eye on Alcatel-Lucent's results, which are slated to come out tomorrow. Analysts polled by Thomson Reuters expect Alcatel-Lucent to lose $650 million. The company has struggled to reign in its losses since its formation in 2006.