iMessage on my iPhone 4S only works when I am connected to WIFI

Note: On iPhone, if iMessage is unavailable, the message may be sent as SMS or MMS, depending on content. Carrier messaging rates may apply. You can turn this on or off in iPhone at Settings > Messages > Send As SMS. Messages sent using iMessage will appear in a light blue bubble, while messages sent using SMS or MMS will appear in a green bubble. imessage is working like it's suppose too, when it's unvailable it sends it as a text.  if your having problem with your network connection I suggest contacting AT&T.

Yes I have it set to send as SMS when iMessage is not working.  What I'm saying is it sends as an iMessage ONLY when it's on WIFI.  I have never been able to send an iMessage when connected to AT&T's HSPA+ network.  Any thoughts?

Right, when there is no/low wifi or 3G connection the imessage sends it as a text.

Like I said contact AT&T, they handle  the network issues.

That isn't really what is happening though.  I have a full connection to AT&T's data network and can do everything else.  Furthermore, iMessage doesn't send it as SMS by itself.  It first fails and tells me that it can't send (I get the red exclaimation point) and then I have to click to tell it to send as an SMS.  Do you still think the problem is on AT&T's end?

I'm with AT&T also and I do get that message, when I'm not on wifi but on 3G.  I usually try to send it again as a imessage, if I get the red exclamation point again.  I then do a reset, hold down the home/power button together until you see the apple logo and then release, then wait for the phone to boot back up.  Then I try sending it again and it will work.