AT&T improving network, getting Nexus One

Who else was surprised by Apple’s announcement last week that AT&T would be exclusively providing the wireless service for the new iPad? After all the issues with the iPhone, all the complaints, and customers practically begging Apple to give the iPhone contract to Verizon, or really, anyone but AT&T, it’s a little mind boggling that they’d further solidify their relationship with the wireless carrier. To prepare for the anticipated increased burden on its network, the company has decided to invest an extra $2 billion in improving its 3G network. They’ll also need to do this to accommodate several new smartphones, including the Nexus One.

Although AT&T threw a fit and said Verizon was being unfair in its “there’s a map for that” commercials, the cold, hard truth is, their network needs to be expanded. It might have been satisfactory when the carrier first inked the deal with Apple for the iPhone. But since then, the iPhone has been improved and updated, and its customer base has exploded. iPhone users consume more data than any other smartphone user group. Either AT&T didn’t foresee this, or they thought they’d be able to keep up. The fact that they asked iPhone users to try to limit their data usage is a clear indication that AT&T is well aware of their network’s shortcomings.

The company announced late last year it plans to spend between $18 and $19 billion this year upgrading its network, which is about $2 billion more than they spent last year. The money will go toward adding about 2,000 new cell sites, and upgrading existing ones. Once those upgrades are made the company feels it will be in a better position to upgrade to 4G in the future.

AT&T recently announced it would be adding a few Android phones to its lineup, and one of those will be the Nexus One. Google’s entry into the wireless arena has had some connection issues of its own, which Google has blamed on T-Mobile’s network. The real source of the problem hasn’t yet been confirmed.

It’s great that AT&T plans to spend a ton of money upgrading and expanding their network. But that takes time. They’re having enough trouble accommodating current smartphone customers. Are they really ready to add more smartphones to an already overburdened network? They may just be opening themselves up to even more complaints from subscribers, further eroding the customer loyalty they have left. And let’s not forget that the Federal Communications Commission is now asking all wireless carriers to justify their Early Termination Fees (ETFs). If AT&T planned to get any of that extra $2 billion from those ETFs, they may find themselves in a lurch pretty soon. And their customers will be right there with them.

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AT&T improving network, getting Nexus One