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De la Vega: Record Q4 Device Sales

Wed, 12/05/2012 - 10:08am
Andrew Berg

AT&T is moving more devices than expected in the fourth quarter, according to comments from Ralph de la Vega, president and CEO of AT&T Mobility. 

Speaking this morning at the UBS Investor conference, De la Vega said AT&T is headed for record fourth quarter smartphone sales. AT&T has already sold 6.4 million smartphones in the first two months, with December sales still to be recorded. Typically the fourth quarter ramps through December, and De la Vega said the company is revising smartphone sales guidance to hit 26 million units for the quarter, 1 million more than previously expected.
 

Tablets have also done well, driven by availability of more models running Google's Android and Microsoft's Windows platforms, as well as AT&T's new Mobile Share shared data plans. De la Vega said AT&T has seen more than five million customers switch to shared data plans in less than four months, which has encouraging more tablet postpaid net adds. 

Verizon currently covers more than 75 percent of the country, or 250 million POPs with its LTE network, and the company plans on expanding that to cover at least 10 million more people by the end of the year. Sprint will have 120 million people covered by the end of the year, and T-Mobile USA expects to begin its deployment next year.

AT&T hopes all those devices are well-served by its HSPA+ network, as well as the company’s continuing rollout of LTE. While still well behind Verizon Wireless on LTE, AT&T has managed to stay ahead of schedule with its rollout. The company hit its year-end goal of 150 million Points of Presence (POPs) last month and has since added 10 million POPs to that number. The carrier hopes to have covered 300 million POPs by the end of 2014. The amount of data customers are signing up for on those plans has also exceeded expectations. According to De la Vega, fully 25 percent of customers on shared data plans have selected data buckets of 10 GB and higher. 

De la Vega boasted AT&T's extensive backhaul enhancements, running fiber and Ethernet to many of its cell sites, as a differentiator. 

"You can claim you have LTE, but if you don't have LTE with the enhanced backbone, you don't have the throughput...The speeds that we're seeing, quite frankly, exceeded our expectations," De la Vega said. 

When asked whether he thought the network was ready to deal with HD video content, De la Vega said that the network could handle it but questioned whether end-users actually want to pay for that kind of service. He stressed that a combination of Wi-Fi and LTE are the future, suggesting that many customers might prefer HD video over Wi-Fi, as opposed to paying to download it over the cellular network. 

De la Vega's talk at UBS follows on Lowell McAdam's appearance yesterday. Both McAdam and De la Vega commented on the Softbank and Sprint transaction, as well as the MetroPCS and T-Mobile tie up. Both executives seemed to view these mergers and acquisitions as par for the course going forward, saying that in the end the U.S. market will remain healthy. 

"I think in the case of Sprint, the Softbank deal recapitalizes the company and gives them a better balance sheet, but it doesn't change the basic dynamics of the industry," De la Vega said, reiterating that the United States has one of the most competitive, capital-intensive wireless markets in the world.

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