AT&T Mobility President and CEO Ralph de la Vega said that AT&T has finally caught up to its CDMA competitors in 3G coverage and data services penetration. Speaking at an AT&T investor briefing in New York today, de la Vega laid out a plan for AT&T to use its new data network and bundled services to overtake its competitors in other areas it is lacking—even going so far as to detail a basis point by basis point strategy to match industry leader Verizon Wireless’ churn rate.

At the end of the third quarter AT&T had its UMTS/high-speed downlink packet access (HSDPA) network in 255 metropolitan areas, covering 89 of the top markets. By the end of 2008, AT&T will add another 30 million pops to its network expanding its footprint to 98 of the top 100. Compared to the EV-DO rollouts of Verizon Wireless, with 96 markets of the top 100, and Sprint, with 92, AT&T will be either even or ahead in 3G penetration, de la Vega said.

“We have, in effect, caught up with the 3G footprint of our CDMA competitors,” de la Vega said. Though AT&T announced its nationwide rollout of 3G in 2004, it was quickly outpaced by Sprint and VZW. Those vendors had only to upgrade their CDMA 1X base stations, while AT&T had to build a new network using UMTS base stations from Lucent Technologies, Ericsson and Siemens (though Siemens was eventually dropped from the contract). In the last year, however, AT&T escalated the 3G rollout and launched its first dedicated 3G services such as video share and its music download platform.

Now AT&T plans to complement its high-speed download network with a high-speed uplink network that can support real-time IP two-way broadband services, using high-speed uplink packet access (HSUPA). Telephony reported last month that AT&T already has the upgrade in place in most of its 3G markets. Unlike its slow rollout for HSDPA, AT&T plans to turn the fast-upload networks on all at once. “We’ve been upgrading the 3G network with HSUPA and will complete that deployment by the second quarter of 2008. … With HSUPA our network performs that are equal to or higher than EV-DO Revision A,” de la Vega said, referring to Sprint and Verizon’s own fast uplink upgrades.

Data services have already had a huge impact on AT&T this year, accounting for an estimated $7 billion in revenues. Data revenues in the third quarter alone jumped from $1.1 billion last year to $1.8 billion. As customers gradually upgrade to 3G phones, de la Vega said, ARPU for those customers shoots up an average of 20%, de la Vega said.

“Annual data growth has exceeded 60% for five consecutive quarters,” de la Vega said. “This is even more impressive when you consider that a lot of this growth has been on our 2.5G EDGE network.”

(continued on next page)