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Thursday, September 03, 2009, 08:00 am PT (11:00 am ET)

Bandwidth-guzzling iPhone called "Hummer of cellphones"

While AT&T and Apple have remained silent on the absence of tethering and MMS with the iPhone, a new report provides insight on the effect an influx of bandwidth-heavy mobile users have had on the wireless network.

Digging into customer dissatisfaction with the AT&T network, The New York Times revealed that the carrier has struggled to keep up with demand as iPhone owners use more and more bandwidth. The report suggests that AT&T's reputation could be tarnished because, for some users, its network is unable to keep up with demand. The bandwidth issues have led to delays of tethering and multimedia messaging, much-anticipated features for iPhone users.

"The result is dropped calls, spotty service, delayed text and voice messages and glacial download speeds as AT&’s cellular network strains to meet the demand," the report, which compared the device to a gas-guzzling Hummer, states. "Another result is outraged customers."

The average iPhone user reportedly consumes 10 times the bandwidth of a typical smartphone user, but that is expected to change in the near future. The growth of the iPhone and its impact on the AT&T network has even led to lawsuits. As other mobile devices emulate the iPhone and also use more network capacity, the problem is expected to grow on all networks, not just AT&T.

Even John Donovan, chief technology officer for AT&T, admitted his company's struggles. "It's been a challenging year for us," he told the Times.

But in the face of demand, AT&T plans to spend $18 billion this year to upgrade and expand its 3G network. And the company has no plans to cap data use, whether solely through the phone or via tethering with a computer.

AT&T announced Wednesday that it had improved its 3G coverage in metro New York and New Jersey. The company expects to roll out nationwide improvements with HSPA 7.2 technology, with the upgrade to be completed in 2011. And 1,900 new cell towers are planned for construction in the U.S. this year as well. But expansion isn't so simple.

"As fast as AT&T wants to go, many cities require lengthy filing processes to erect new cell towers," the report states. "Even after towers are installed, it can take several months for software upgrades to begin operating at faster speeds."

Many analysts believe that when Apple's exclusive contract with AT&T expires in 2010, the handset maker will offer the iPhone on other carriers. The most obvious jump would be to Verizon, the largest carrier in the U.S., ahead of No. 2 AT&T.