“Given our high smartphone numbers, double our closest peer, in both markets, we have large population centers, very sophisticated users with high expectations, and very high volumes,” John Stankey, president and CEO, AT&T Operations said during the call.

“For example, in the dense areas of New York City, there are periods during the week when nearly 70% of the devices active on the network are data-intensive handsets. So, raising performance levels in these two markets is the organization’s top priority. We’re putting all the resources available against the issue and we’re closing the gap.”

Okay, great. What does that mean? Between $18 billion and $19 billion in 2010 capital expenditures–approximately $2 billion of it for additional wireless network and back-haul investment, for one thing. For another, 2,000 new cell sites. Finally, the company is upgrading existing cell sites with fiber for better 3G speeds.

Now, a few more NYC-SF specifics from Stankey:

We’re adding third and fourth radio network carriers to maximize capacity on available spectrum. In Manhattan specifically, now that we have scalable cell site controllers in place throughout most of the island, we’re intensely focused on putting more radio capacity on the street. We’ll increase the amount of 3G spectrum and radio capacity by one-third in high volume areas of the island by the end of the first quarter.

While we are through the majority of our zoning challenges in the Bay area, we’ll continue to work the remaining issues we have in parts of the Financial District and a handful of other locations to final resolution. We’re adding cell towers; and over the coming months, we’re building and upgrading high-capacity antenna systems to boost performance in high-traffic areas like stadiums, convention centers, and public transportation routes.

So will be see significant improvement in both markets in the coming months? Perhaps. Certainly, AT&T is suggesting we can expect one. And, as Stankey noted this morning, “Today a dollar in wireless investment yields twice the capacity than it did a year ago.” Let’s hope so–especially in markets like New York and San Francisco.

PREVIOUSLY:

• Apple COO: Leave AT&T Alone
• If You Think AT&T Has Network Problems Now, Just You Wait
• AT&T 3G Improving–If You Can Get a Signal
• Admitting You Have a Problem Is the First Step, AT&T
• Usage-Based Data Pricing: The Solution to AT&T’s iPhone Problems?
• AT&T Ranked Last in Consumer Reports’ Best Cellphone Service Survey
• Apple Joins AT&T/Verizon Spat With New iPhone Ads
• AT&T Awarded Hug and a Box of Tissues in Verizon Ad Case
• Time to Cut AT&T Some Slack, iPhone Users?
• Thanks, iPhone: 2,000 Percent Increase in Bay Area Data Traffic Since 2008, Says AT&T
• Verizon to AT&T: Do Yourself a Favor and Shut Up
• Frosty’s Winter Litigation Wonderland: AT&T Demands Verizon Pull Holiday iPhone Ads
• Verizon Banishes iPhone to Island of Misfit Toys
• Verizon on AT&T Suit: There’s a Word for That. “Junk
• Verizon to iPhone Users: “Want Five Times More 3G Coverage? There’s a Map for That.”
• iPhone Owners Would Like to Replace Battery, AT&T

Welcome news for long-suffering AT&T (T) subscribers, who recently ranked the carrier dead last in the annual Consumer Reports survey of wireless customer satisfaction. But the carrier’s improvements only apply to cities where additional back-haul connections have been added to support those higher speeds.

Sadly, for New York City and Bay Area residents, neither region qualifies. As AT&T head of operations John Stankey told attendees of a Citigroup (C) conference Tuesday, those cities present particularly challenging density and zoning issues.

“I thought by the time we’d closed 2009 we would be in a better place in New York City than we were,” Stankey said. “But New York City is a little bit of a different animal and it’s a good example of having to scale in this data environment, where not only do we have a lot of capacity issues to deal with but physically there is network equipment and network elements that are needed to be changed out.”

Elaborating, Stankey added, “They just flat-out have hit their capacity levels and we have to replace them with new ones. And as a result of that, those transitions and that work has taken us a little bit longer and it’s been a little dicier than what we had hoped it would be.”

And evidently, the situation is equally dicey in San Francisco.

“Our challenges [in San Francisco] are largely zoning-oriented,” Stankey explained. “It’s a little bit tougher in places in San Francisco to do adjustments to antennas that we need to do in areas like the Financial District, where we had antenna structures that worked really well in a 2G environment. They need to be replaced to support 3G services and it’s just taking time to get the zoning ordinances square to replace those antennas and clean up the portions of the city that we are dealing with.”

Okay. So New York City and San Francisco upgrades are tough going–that’s understandable. They’re both big, tech-savvy markets with high data demands. Still, it’s a travesty that a carrier like AT&T still can’t reliably connect calls in either of them when the company is raking in 80 percent more wireless data revenue than it did in 2007.