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AT&T and Sprint Are Focusing on These Technological Improvements to Compete



AT&T’s focus on the SDN approach to networking

AT&T (T) has started to take an SDN (software-defined networking) approach to transforming its network. SDN helps telecom companies save costs and provide more flexibility, as this approach requires them to virtualize their networks instead of spending on dedicated fixed hardware.

AT&T aims to increase the penetration of SDN to its networks gradually. As the graph below shows, AT&T’s SDN penetration was only 5% last year, but it expects it to increase to 30% by the end of this year. It also expects to grow this penetration to 75% by 2020.

ATT SDN Penetration

The overall SDN market is growing at a rapid pace. According to a report from SDxCentral, the SDN market is expected to grow from $7.8 billion in 2015 to $35.6 billion in 2018 at a compounded annual growth rate of 66%.

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Sprint’s focus on carrier aggregation technology

Brocade (BRCD), Cisco (CSCO), and VMware (VMW) are some of the major players in the SDN market. Brocade acquired Vyatta, while Cisco acquired Cariden to gain quick entry into this market. VMware is another leading player in this market as the company acquired Nicira in 2012 to make clear its intentions in the SDN market.

Other than AT&T, Sprint is another company that is trying to develop its network technology to compete effectively. The company is focusing on developing two-carrier and three-carrier aggregation techniques to increase bandwidth speeds. Aggregation is a technique used by telecom companies to provide multiple LTE connections to users’ devices, which enables significant increases in broadband speeds. Sprint recently tested peak download speeds of 230 Mbps (megabits per second) in Chicago using the three-carrier aggregation approach.

In the next and final part, we’ll look at Comcast’s entry into the wireless space.


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