correction
3GPP R6 standards allow for IP in the network. 3GPP R99 mandates ATM only. R7 onwards I think is IP only. The likely reason they wanted to do ATM encapsulation is that:
a) they didn't want to get rid of their ATM network just yet.
b) their node B/RNC vendor doesn't allow mixed IP/ATM interfaces. (voice over ATM via PDH/SDH, data over IP via xDSL offload)
c) they don't have an IP RAN in place to support a full IP backhaul.
d) they may also be backhauling other stuff like 2G EDGE/GPRS traffic too.
Can anyone at T-mobile confirm?
Biting the hand that feeds IT
