Thursday, March 11, 2010

AT&T Decides Not to Invest in 4G. 3G is just fine!

People are still scratching their heads about AT&T chief executive Randall Stephenson's odd comments that the iPad won't be popular on cellular networks. (AT&T currently being the exclusive cellular service for the upcoming iPad.) One possible explanation is that AT&T doesn't want to make an investment in upgrading it's 3G network to compete with Verizon's coming 4G Long Term Evolution (LTM) and WiMax.

You see, if people don't use iPads out of range of their home WiFi networks (some of which AT&T provides) then AT&T doesn't have to worry about keeping up with the demand for faster cellular networks capable of providing lots of data. Obviously, they already can't support their current customer base of iPhone's properly, so if millions of iPad customers sign up, there will be even more complaints.

While this might be wishful thinking (maybe iPad users can just hang out at McDonald's and use AT&T service for free), it would seem it's just typical short sighted AT&T quick profits over long term investment strategy that appears to be Stephenson's policy. Keep profits high, don't invest, push the stock up and…

Escape with a golden parachute? Pocket big bonuses? Whatever Stephenson's plan is, presumably he has an exit strategy before it turns out the iPad is a very mobile device and people aren't going to be willing to accept 3G on it.

Meanwhile, us iPhone users are waiting for our own exit strategy, from AT&T. 4G and WiMax look promising.

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