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Analyst: AT&T mobile plans could face hurdles
Last modified: May 18, 2004, 5:14 PM PDT
By Ben Charny
Staff Writer, CNET News.com


The cell phone service AT&T plans to launch could have some very real interoperability problems, if it draws on other carriers to create a "mixed" network, an analyst warns.

On Tuesday, the nation's largest long-distance phone company announced that it tapped Sprint, which owns a CDMA (Code Division Multiple Access) standard cell phone network, to supply it with wholesale network access for an AT&T-branded cell phone service due later this year. The choice of Sprint was expected.

AT&T spokesman Jim Byrnes said the company is also in talks with several other U.S. carriers, including those that use GSM (Global System for Mobile communication), the world's most popular cell phone standard that's not interoperable with CDMA. While that raises the possibility of having a "mixed network," Byrnes said, "it's very early and nearly impossible to really tell at this time."

However, if AT&T were to mix conflicting cell phone standards into one network, its subscribers would have a difficult time making calls from anywhere in the country reliably, Jupiter Research analyst Joe Laszlo said. Phones that offer multiple standards are more dependable, but those are rare and expensive. Otherwise, customers would have to settle for calling in more limited areas, he said.

"It makes anywhere you go, unlimited roaming plans, very hard to do," Laszlo said. "Dual handsets (those that support both GSM and CDMA) are going to be just so outrageously expensive."

Byrnes said it is too early to speculate on what sort of problems AT&T might have, if it does create a network involving multiple carriers that use different cell phone standards.

The company's plans with Sprint come as AT&T Wireless, which AT&T has used in the past to sell cell phone services, has been struggling. Last month, AT&T Wireless announced plans to open 100 new retail stores and bolster its customer call service, after suffering one of its worst financial quarters ever; it lost 367,000 subscribers, while its competitors enjoyed a surge of new customers.

AT&T Wireless was once a unit of AT&T, but the company spun the business off in 2001 as part of a larger restructuring plan.

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