AT&T Says Alcatel-Lucent Equipment Problem Slowed Network

By Roger Cheng Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)--AT&T Inc. (T) said a "software defect" in its network equipment slowed down the connection for many of its laptop card and smartphone customers over the weekend. AT&T and supplier Alcatel-Lucent (ALU) jointly found a problem with the equipment that prevented certain subscribers from reaching their peak upload speed. The companies said the issue affected less than 2% of its wireless customer base, and Alcatel-Lucent said it was working to fix the software glitch. It's the latest in a series of hiccups for AT&T, which continues to struggle with the perception that its network suffers from more dropped calls and coverage problems than rival Verizon Wireless. The mounting problems are detrimental for a company that operates in an industry where its players stake their reputations on reliability. AT&T said that customers who previously were able to get a faster version of 3G called HSUPA now could only get "normal 3G uplink speeds," which is slower, until a fix was completed. People affected included those who owned a Laptop Connect card, as well as certain smartphones, including the Apple Inc. (AAPL) iPhone 4. An AT&T spokesman declined to comment on which markets were affected by the network problem. AT&T has dealt with a number of glitches, including allowing the private email addresses of 140,000 owners of cellular-connected iPads to be publicly released, as well as problems with customers attempting to preorder iPhone 4s. More recently, Apple has talked about the signal strength and antenna issue of its new iPhone 4, partly laying the blame on its carrier partner's network. Verizon Wireless, meanwhile, has benefited from a fresh round of speculation over whether the iPhone would eventually come to its network. Verizon Wireless is jointly owned by Verizon Communications Inc. (VZ) and Vodafone Group PLC (VOD). AT&T shares rose 9 cents to $24.08, while Alcatel-Lucent American depositary receipts rose 3.3% to $2.67. -By Roger Cheng, Dow Jones Newswires; 212-416-2153; roger.cheng@dowjones.com (END) Dow Jones Newswires July 07, 2010 13:51 ET (17:51 GMT)