Hasta La Gadget!

The iPhone 3GS has been a huge hit for AT&T, and although they aren’t saying how many customers they’ve stolen from other carriers, AT&T Mobility CEO Ralph De La Vega said they had “hundreds of thousands” of pre-orders.

That puts a lot of pressure on AT&T’s network (which we reviewed recently), but the carrier is ready for it, AT&T spokesman Mark Siegel said. They’re doing three major things to improve their coverage and speeds, one of which will have a huge positive effect on coverage in cities like New York, San Francisco and Los Angeles.

That major upgrade is known as “3G on 850 Mhz.” In busy cities, some dropped calls and signal problems come because the 1900 Mhz airwaves that AT&T mostly uses for 3G are totally saturated – they’re trying to cram too many iPhones into too little space.

Across much of the country, though, AT&T also owns big blocks of spectrum in the older 850 band, which was once used for AT&T and its predecessors’ older TDMA service. Verizon Wireless is the other big 850 Mhz carrier. AT&T has been refitting their 850 Mhz equipment for 3G. As 3G 850 comes on throughout the rest of this year, the effect will be like going from having 100 people crammed into a conference room, to having the same population in a spacious ballroom.