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Why AT&T Continues to Invest in Superior Network Technology

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AT&T’s network performance

Network performance is the key factor that affects customer retention. AT&T’s (T) postpaid phone churn improved year-over-year (or YoY) and was the best ever for the first quarter. AT&T’s postpaid phone churn of 0.90% in 1Q17 was lower than the 0.96% in 1Q16, which may be significant given that T-Mobile (TMUS) and Sprint (S) have made much of their ability to steal customers from other carriers like Verizon (VZ) and AT&T.

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According to a FierceWireless report on April 26, 2017, “We’re continuing to invest in our wireless network by adding small cells and using advanced 5G Evolution achieved through upgrades like carrier aggregation, 4×4 MIMO, 256 QAM and more.” Further, according to the same report, “And as we continue densifying our network and deploying technologies like carrier aggregation and LTE-License Assisted Access (LAA), we expect to enable theoretical peak speeds up to 1 Gbps in some areas in 2017.”

In the past, AT&T spent heavily on its Project Velocity IP (or VIP), a program aimed at upgrading its wireless and wireline broadband infrastructure. Additionally, AT&T is focusing on an SDN (software-defined networking) approach to transform its network. AT&T’s management believes that penetration of SDN will reach 55% by the end of 2017 and expects to reach 75% by 2020.

RootMetrics’ network performance results

According to RootMetrics’ 2H16 RootScore report, at the national level, AT&T came in second in five out of six categories including overall performance, network reliability, speed, data, and text performance. In call performance, Sprint beat AT&T to finish second. AT&T has remained a strong number-two performer behind Verizon for seven consecutive test periods.

Verizon came in on top across all six network performance categories at the national level. However, Sprint and T-Mobile ranked third and fourth, respectively, in overall network performance.

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