AT&T at JP Morgan Conference Notes

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Ralph de La Vega – Vice Chairman, AT&T Incorporated & CEO, AT&T Business Solutions and AT&T International, LLC

We have been in the process of building a software defined network

” We have been in the process of implementing what I think is one of the significant transformations I have ever been a part of. When it comes to networking, and particularly in the enterprise space and in the network space, we have been developing our software defined networks in a way that we are now forecasting that by the end of this year 30% of our network functions will be virtualized. And by 2020, it will be 75%, so we’re not talking about a small amount.”

The speed at which the business is turning now with software defined networks I’ve never seen before

“what is happening today is companies come to us with pieces of equipment that have never been connected to the Internet but that need to be connected so they can get performance data on them but in many cases they were concerned about connecting key components of plant because they were afraid about the security. But we had a customer come in says can you connect this voltage drive to my cloud provider of choice which in this case was the Microsoft Azure cloud. And they said we’re going send our IT guys there for a few days so you guys figure it out. They sent those folks. We took them to the AT&T machine-to-machine foundry in Plano, Texas. In three hours, they were done. The next week we got a contract. And the point there being is that the speed at which the business is turning now with software defined capabilities and the cloud I’ve never even seen before”

We have a lot of unused spectrum

“So let me explain it this way and we’ll try to connect the dots. One of the things that determine the criteria of how good a quality of network you have and also the cost efficiency of the network is your second position. Do you have sufficient spectrum, so you don’t have to keep building cell sites to get the quality of network that we need. We are kind of in a situation, which is again the best situation I have ever seen in my years with the company, because we now have a great dense network Phil, but we also have 40 megahertz of fallow spectrum that includes the purchases that we made in the AWS-3 auction as well as WCS spectrum. So that gives us great capability to expand coverage to fill any holes we have with 40 megahertz of rate spectrum, because of the densification factor. We’ll begin to use our WCS spectrum at the end of this year and AWS in the 2017 or so timeframe. So I think we’ll be able to provide what we need to provide not only with great quality, but with great cost because if you have to do that with building cell sites with the cost of the real estate and all the things you have to do today, our experience shows that you are better off doing it with the right spectrum purchase.”

We have a lot of spectrum but we’ll need it