AT&T risks falling behind yet again in the cell phone technology race

AT&T risks falling behind yet again in the cell phone technology race

Metered internet pricing is a controversial suggestion. Basically, most iterations of the plan boil down to low-usage users' costs remaining similar to current costs, but high usage users having to pay much more than their current rates. Customers by and large hate the idea since they feel they already pay too much for their internet (major service providers in the U.S., like Comcast and Embarq, have fought to outlaw municipal Wi-Fi services that would offer cheaper internet to citizens). Internet service providers, though, simply see dollar signs when they dream of metered pricing.

In the U.S. two companies have tried meter pricing trials -- AT&T and Time Warner. Time Warner dropped its plans after backlash, but AT&T is still soldiering ahead with plans to increase the fees of its busier users. AT&T Inc. Chief Executive Randall Stephenson on Tuesday said that he is still planning an eventual rollout of a metered billing plan.

He delivered the announcement at a multi-topic presentation at a Morgan Stanley conference in San Francisco. His stance on metered pricing is not unique -- Verizon Wireless recently indicated that it was eyeing trial deployments of tiered pricing as well.

Among the other interesting topics he hit on was the company's relationship with Apple. Despite complaints from iPhone owners, Mr. Stephenson is convinced that iPhone will be a "key product" (hinting at exclusivity) for "quite some time".

He also alluded to the public mockery that Apple's long-awaited iPad tablet brought. He indicated that AT&T isn't overly excited in the 3G version of the iPad, which will be released in April, likely on AT&T's network. He icily stated, "[It's] interesting to see the customer reaction to the iPad. We think it's going to be a largely WiFi-driven product."

Mr. Stephenson and other AT&T executives said that the company is working to correct the highly publicized shortcomings of their network in New York City and San Francisco. They are beefing up infrastructure in these regions that were swamped by the growing legion of iPhones.

On the advanced technologies front AT&T appears to be yet again letting itself slip behind in infrastructure, though. Even as T-Mobile, Verizon, and Sprint have announced ambitious plans to deploy faster 4G networks, AT&T says it's in no hurry to deploy its own championed brand of 4G, LTE (Long Term Evolution). It says it may start deploying LTE in 2011 (all the other carriers are deploying 4G this year) and that deployment won't "accelerate" until 2012. (Previously announced plans to deploy LTE in 2010 appear shelved.)

AT&T slashed its infrastructure investment in 2009, but this year hopes to invest slightly more to prepare for the iPad and iPhone demand.

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