New Age of Data-Enabled SmartPhones Strain U.S. Carrier Network Resources

The mobile growth age in the United States of expanded handset data usage is challenging AT&T, Sprint, Verizon, T-Mobile and other carriers to deliver web content, email and other services. In a recent InfoWorld article, "AT&T Lays Down the Law for Apple," it becomes clear that the iPhone, claimed by many as the first "handset computer," is just the beginning of other sophisticated voice/data handsets sucking bandwidth from the carrier's networks.

In one sense, it's a catch-22. The carriers must convince U.S. cell phone users to upgrade their handsets and purchase data plans to boost sales volume. On the other hand, all of the carriers are scrambling to compete in a growing, but inadequate 3G broadband wireless world.

While AT&T, due to its resources, is probably ahead of the competition, T-Mobile has enabled 3G networks in Los Vegas, New York and elsewhere, but only offers 3G on a few handsets. Verizon is heavily advertising data-enabled smartphones, including BlackBerry's, while Sprint, hardest hit with high customer churn and the Nextel situation, continues introducing so-called "iPhone killer" handsets, such as the Instinct, that strain its broadband network.

According to the InfoWorld article, iPhone users are placing the greatest download demands on AT&T's data network--more than other handsets--due to the increasing numbers of data applications available for the device. Downloading YouTube videos is the tip of the iceberg since the opening of Apple's Application Store. The situation is analogous to Comcast and the other cable companies offering broadband Internet services. As download speeds and customer demand increase, cable broadband networks are also strained.

Moreover, as reported in today's San Jose Mercury News, customers in central Silicon Valley are complaining of poor or non-existent voice coverage, including Palo Alto, the home of Hewlett-Packard and other major technology companies. The Mercury quotes a report from Joint Venture, which attributes the problem to insufficient cell phone towers.

U.S. carriers, facing stagnant revenues if they can't convince customers to purchase data plans, must continue spending billions to build their infrastructure and remain competitive to satisfy customer data demands for web, email, audio, video and other data-intensive uses of their networks.

Whether the carriers can meet the challenge is yet to be seen.