Amidst increased media publicity over capacity problems in its New York City market, AT&T Wireless Services Inc. last week granted a contract to Lucent Technologies Inc. that calls for the vendor to replace Ericsson Inc.’s equipment in the country’s largest wireless market.
Ericsson-AT&T Wireless’ main equipment supplier-has taken the heat since media reports surfaced detailing New York customers complaining about poor quality, dropped calls and busy signals. AT&T Wireless’ introduction of high-end, flat-rate anywhere calling plans last May has caused usage to skyrocket across the country and especially in New York, where AT&T Wireless is trying to curve growth by cutting back on marketing efforts.
AT&T Wireless President and Chief Executive Officer Dan Hesse recently told RCR his company had trouble fixing capacity problems in New York because Ericsson could not deliver equipment fast enough. The Time Division Multiple Access operator this year more than doubled its digital capacity in New York, adding equipment equivalent to an entire network in Seattle or Minneapolis.
Now Lucent will replace that new equipment, and AT&T Wireless will redeploy the infrastructure in other Ericsson markets. AT&T Wireless declined to comment on any dissatisfaction with Ericsson. Ericsson also would not comment.
“This will help us to more quickly respond to demand for services in metro areas,” said AT&T Wireless spokesman Dave Johnson when asked why the carrier plans to replace Ericsson’s equipment in New York.
Network growing pains also have prompted AT&T Wireless to add Nortel Networks as a third vendor. The carrier announced letters of intent with Nortel and Lucent, which already has a $1 billion deal with the carrier, to deploy equipment in a number of markets.
RCR reported on speculation of such a deal last week.
AT&T Wireless was given $2 billion this year to increase network capacity and build out personal communications services markets. AT&T Wireless said the new multivendor strategy should meet its capacity needs during the next four years for $900 million less than the company previously had projected.
“When you have vendors competing, it results in better product and faster delivery,” said Johnson. “That’s one of the primary reasons we’re looking at multiple vendors.”
Johnson said AT&T Wireless wants its three vendors concentrated in different geographical regions to aggressively respond to network demands. Lucent equipment is primarily deployed in the Eastern half, though the vendor will add equipment in Los Angeles and other areas. Nortel will deploy equipment in Arizona, California-including parts of Los Angeles-Nevada, Oregon and Washington. Ericsson will remain in other parts of AT&T Wireless’ footprint.
“It shows the incredible growth in the industry beyond everyone’s expectations, and this is a natural outcome of that,” said Kathy Egan, Ericsson spokeswoman. “We would like to continue to be the main supplier.”
Ericsson will remain AT&T Wireless’ largest infrastructure supplier, said AT&T. Lucent supplies 11 AT&T markets plus New York and part of Los Angeles, and Nortel will supply five markets.
