Is AT&T’s big wireless upgrade investment mostly a price increase?

On of the most used marketing ploys in in the telco suit’s bag of tricks is raising revenue by tinkering with rates, billing or repackaging existing technology into higher priced offerings. That sort of tinkering has evolved into a fine art in the wireless biz, with AT&T as the master.

Recent growth in wireless data use has eroded the quality of service AT&T’s infrastructure has been able to provide to many of its customers. AT&T  has responded with a commitment to invest in upgrades, along with usage based price tweaking that amounts to a price increase for many of AT&T’s wireless data customers. According to a report on Neowin, this so called investment may have been a ruse with the expectation that a price increase alone will reduce usage, therefore improving performance.

As seen in the images below, AT&T’s “commitment to improving their network” claim could not be further from the truth. Since the release of the original iPhone,  AT&T has consistently spent less money on network construction. This seems very strange, considering they beefed up construction right before the iPhone’s initial release. With such a high demand phone,  AT&T should be expected to continue investing in their network, especially considering the fact that the iPhone was upgraded twice already, allowing it to consume more data, and ultimately bring more customers to the carrier.

Since the release of the iPhone, AT&T’s revenue has consistently increased. They now make approximately 80% more revenue from wireless data than they did when the iPhone was initially introduced. This increase doesn’t seem to be slowing down anytime soon, as it has been steadily inclining for the past two years. The post also shows stats regarding the economy’s negative effects on AT&T’s net income. Guess what? There weren’t any. AT&T was able to increase their cash, and cash equivalents on hand by 4.375 billion dollars since the start of 2009. They’ve seemed to keep profits fairly steady, considering the times. (more on Neowin)