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Telecoms struggle to keep up with demand

Barbara Marquand
Northern Nevada Business Weekly

Remember the old days – OK, several years ago – when you used your phone just to make calls? Now the idea of a phone that can’t send e-mails, download songs, record video, take photos or surf the Internet seems quaint.

The explosion of phone applications has boosted demand for increasingly sophisticated and robust wireless networks to handle all the data traffic, and today one of the big challenges for the telecom industry is keeping up.

“It’s hard to believe, but in the past three years, mobile data traffic on the AT&T network has increased by nearly 5,000 percent,” AT&T spokesman John Britton says.

Smart phones, in fact, replaced laptop computers as the mobile Internet connection of choice on AT&T’s network in the third quarter of 2009.

Says Britton: “Smart phones and integrated devices with full qwerty keyboards are no longer phones that can access the Internet, they are now Internet access devices that can also make phone calls.”

Facilities-based telecoms face the challenge of keeping their networks competitive, too, except the increased demand on their technology infrastructure comes from new applications at the desktop. Uploading of files like computer-aided drawings or digital CAT scans require lots of bandwidth.

To meet customer expectations and stay competitive, telecoms must upgrade their networks every year. In the last two decades, wireless carriers have invested $264 billion in their networks, with an average carrier investment of more than $22.8 billion to expand and upgrade networks from 2001 to 2008, says CTIA The Wireless Association.

Locally in Northern Nevada, wireless carriers have been upgrading their networks to improve cell coverage and keep up with the growing amounts of data traffic.

T-Mobile launched its 3G, or third generation, network, enabling high-speed Internet connections, in Reno earlier this year. The Reno expansion is part of a broader T-Mobile effort to strengthen its 3G network and expand into new cities. The company says it plans to reach two-thirds of the U.S. population with 3G service by the end of the year.

Verizon Wireless last year invested almost $50 million in its network in Nevada, adding 16 new cell sites and upgrading others to improve network reliability and expand capacity for advanced wireless services, such as V Cast, a multimedia service that lets customers stream video clips, play 3D games and download music. So far this year the telecom added six new cell sites in northern Nevada and integrated the Alltel network assets, which it recently acquired.

“We’re always investing in our network to anticipate areas of growth to handle increased traffic and stay ahead of the curve,” Verizon spokeswoman Heidi Flato says. “Over time the customer experience is the really the name of the game in this competitive environment, and that starts and ends with our network.”

Connecting areas between population centers in Nevada is among the challenges locally. Verizon is doing more work in ski resort areas in the Lake Tahoe area to improve cell coverage, and this year it has added cell sites to expand coverage in Carlin, Fernley, West Wendover, Zephyr Cove, Spring Creek and Gold Hill.

AT&T has installed additional radio equipment to create more 3G capacity at cell sites in Reno, Sparks, Carson City and Lake Tahoe and upgraded software to boost processing speeds between wireless phones and cell sites, Britton says. The carrier has also added fiber optic connectivity and additional capacity to cell sites throughout Reno to expand the connections that deliver traffic from a cell site into the global IP backbone network.

“All these improvements allow more people to use cell sites at the same time,” Britton says. “They have increased capacity, improved network efficiency and significantly decreased dropped calls.”

In addition, AT&T improved coverage along Highway 50 between Carson City and Lake Tahoe and along Pyramid Lake Highway to create more signal strength in hilly terrain. It also added a new in-building system at the University of Nevada so people can use phones in places where there was no cell reception before. Now AT&T is preparing to expand to transmitting on a second 3G frequency this year and into 2010, which will speed up connections to the Internet, iPhone applications and e-mail.

“Northern Nevada is definitely challenging,” Britton says. “While there are flat areas, many housing projects are being built on hills. In addition, many roads and highways run through rugged mountain areas.”

What’s next?

The wireless industry has begun evolving from third- to fourth-generation network technologies in the last 18 months. The newest network technology will provide higher data rates and enable a variety of new services, such as high-definition video, which will allow video blogging on mobile phones.

Meanwhile, facilities-based telecoms, are also busy upgrading. Integra Telecom Inc., for instance, which owns and operates its own network in 11 Western states, recently finished a $1 million upgrade in northern Nevada. The work included technology upgrades to central office facilities in Reno, Sparks and Carson City to support higher capacity Internet services for the telecom’s small- and medium-sized business customers, says Integra Telecom of Nevada senior vice president Josh Conklin. The improvements extended the company’s DSL reach by 30 percent to 40 percent and enhanced service for T-1 connections.

Upgrading the local network was a primary goal after the company entered the northern Nevada market through its acquisition of Eschelon Telecom in 2007, Conklin says.

The toughest challenge is balancing the need for upgrades with the expense. After all, Conklin says, it takes a lot of small-business customers to create the economy of scale to pay for a major upgrade. But the work must be done.

“Even as we do one upgrade, we’re thinking about the next one,” Conklin says.