RTG Dismayed But Not Surprised That AT&T Admits To $3.8B Price Tag To Cover 55 Million Additional Americans With LTE
Long-time suspicions of the Rural Telecommunications Group (RTG) were confirmed yesterday after an unredacted version of an AT&T document appeared on the FCC’s website revealing the relatively small incremental cost it would take for AT&T to increase its nationwide 4G LTE footprint from covering 80 percent of the country’s population to covering 97 percent of the country’s population. Media sources have reported that an AT&T document filed with the Federal Communications Commission, and left un-redacted for a few hours, showed that AT&T estimates that its total cost of achieving incremental LTE coverage to 55 million mostly rural Americans would be $3.8 billion, a number that is less than one-tenth the cost of the price AT&T is willing to pay for taking-over all of T-Mobile and eliminating it as a 4G competitor. In response to the FCC filing and subsequent media reports, AT&T spokesperson Margaret Boles contended that “no real news” was made and that the “confidential information in the latest letter is fully consistent with AT&T’s prior filings.”
However, RTG believes that this admission is further proof that AT&T will stop at nothing to eliminate low-cost competitors to the detriment of rural America. “This information confirms what many consumers, and savvy legislators and regulators already suspected, and that is that if AT&T wanted to build-out LTE to 97% of the country’s population, it can do so today and without buying T-Mobile and removing it as a 4G competitor. T-Mobile’s network adds practically nothing to AT&T’s coverage footprint. That AT&T is willing to spend $39 billion instead of $3.8 billion simply shows the lengths it will go to remove competition” said Tanya Sullivan, RTG’s Executive Director.
The $3.8 billion price tag for incremental rural LTE deployment is reasonable, but merely a drop in the bucket for a company the size of AT&T. By comparison, in the most recent fiscal quarter (2Q 2011), AT&T reported a quarterly net income of $3.6 billion and free cash flow (or cash from operating activities minus capital expenditures) of $3.7 billion. AT&T’s largest competitor, Verizon Wireless, has already pledged to build out LTE to over 97 percent of the US population, and is supporting its larger customer base on less spectrum. “AT&T is awash in cash” continued Sullivan “and rural Americans are once again being used as pawns in this process. To think that AT&T would have let Verizon enjoy a much larger nationwide LTE footprint is ludicrous. AT&T needed to perpetuate this myth that without T-Mobile it would be unable to increase LTE coverage from 80% of 97%. Much of the rationale for this proposed merger is tied to floating this trial balloon. With this revelation, that balloon hasn’t just leaked. It has popped!”
About RTG – Headquartered in Washington, DC, the Rural Telecommunications Group, Inc. (RTG) is a trade association representing rural wireless carriers who each serve less than 100,000 subscribers. RTG’s members have joined together to speed delivery of new, efficient and innovative telecommunications technologies to remote and underserved communities. ruraltelecomgroup.org @RTGwireless
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