Two weeks ago, in a post about AT&T's spotty third generation wireless coverage, I posed a simple question: "How about an announcement telling customers how AT&T has been working with Apple to help boost the quality of its iPhone service?"

Now, that seems to be exactly what is happening. AT&T (T) reported on Tuesday that it had spent $65 million upgrading its wireless network in San Francisco since 2008. The phone company said it upgraded about 850 cell sites because of the rising demand put on its network since the iPhone started selling two years ago. That's good news to many iPhone users, whose phone has become synonymous with "dropped calls."


Asif Suria, a software consultant for CleanFish in San Francisco, for example, says "There's a spot just north of the San Francisco airport where the service goes dead." A colleague of Suria's, who has a 10-minute commute in the area, also has problems with her iPhone and laments how Verizon's wireless service is better than AT&T's. "I'm hoping it will get better," Suria said. "I don't think $65 million is a whole lot to spend on improvements. We'll see."

The news from AT&T is good in at least two ways. First, since the company started improving its network over the past two years, third generation (3G) data traffic in AT&T's network in the San Francisco area has jumped 2000 percent, according to a company press release. That has generally given a service boost to people who live in places such as San Mateo and South San Francisco.

Second, AT&T's efforts to communicate the steps it is taking helps shine a better light on the company, which is often criticized for being out of touch with its customers.

Axel Merk, president and chief investment officer at Merk Mutual Funds in Palo Alto, Calif., says he appreciates that AT&T is investing in its coverage in his area. "You should be able to be on a conference call for an hour without having the call dropped," says Merk. "This is 2009, not 1987." He's amazed at the poor quality of cell phone service in the U.S. and mostly uses his mobile phone for email. Merk says he prefers using land-lines because call quality is better.

What about other parts of the country? I have similar experiences in New York City using my iPhone and can name specific blocks where calls not only drop, but coverage fails completely. AT&T is aware of these complaints. By telling customers that it is addressing the problems and working on the solutions, AT&T has a chance to save, or at least improve, its reputation.

Anthony Massucci is a senior writer and columnist for DailyFinance. You may follow him on Twitter at hianthony.


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