AT&T & iPhone: “Can you hear me now?”

AT&T Wireless has become the company that we love to hate.  After-all, they are the 2nd largest wireless carrier in the United States and maintain exclusive rights to the Apple iPhone.  Furthermore, we are bombarded by advertisements from Verizon poking fun at AT&T with their clever “can you hear me now” advertisements based on the quality of their wireless network.  How can poor AT&T even dream to compete against Verizon?  For goodness sakes, Verizon scared Sprint right out of the core network business.

In the interest of full disclosure, I am a currently an AT&T wireless customer and I am completely addicted to my Apple iPhone 3G.  Like many iPhone users, I find myself using the “phone” less and less and instead rely on AT&T’s 3G network for data transmissions.  For me, the iPhone is an extension, and in some cases a replacement, for my laptop.  While I have experienced issues with both Apple’s software and the AT&T network, I understand AT&T’s challenges and I am thankful they are spending both the time and money to correct those issues.  Is Verizon’s network up to the iPhone challenge?

It is time to find out the answer to that question.  I propose that AT&T renegotiate the terms of their exclusivity agreement with Apple to allow Verizon to offer the iPhone on their network.  AT&T would maintain exclusive rights to all next generation iPhone models (4G, 5G …) for x number of months.  This would allow AT&T to keep a competitive edge on Verizon while giving consumers greater choice and providing Apple access to the number one wireless provider in the United States.

Additionally, it has the potential to bring Verizon’s network to its knees.  While Verizon’s network is impressive, it has never seen anything like the traffic iPhone users generate.  Verizon would be saddled with the same growing pains that AT&T experienced with one difference, “can you hear me now.”  Initially, Verizon would gain some high volume customers from AT&T while watching a significant percentage of their base switch to the iPhone.  Let’s face it; Verizon’s phones are boring at best.

After this initial spike in subscribers, the real fun begins.  Verizon’s iPhone users will begin to complain about similar issues to the ones that AT&T users have experienced; poor battery life, dropped calls, no rings, slow network, no network available, no data available, and more.  Verizon’s customer care will see their call volumes spike and their customer satisfaction numbers will fall.  Finally, “can you hear me now” will become a thing of the past and we’ll see Verizon’s CEO walking through the park apologizing and promising they can do better.

Finally, the emperor will have no clothes and all eyes will be focused squarely on Apple.  Apple will be forced to clean-up their act by providing more reliable software and introducing better hardware in their newest iPhone models.  Who does that benefit the most? AT&T (see above exclusivity agreement).  In the meantime, AT&T will have spent billions of dollars upgrading their network using the lessons they have learned to provide a superior experience via their network.

“Can you hear me now?”

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One Response to AT&T & iPhone: “Can you hear me now?”

  1. I-phony says:

    As a consumer and fellow ATT+iPhone user, I’m intrigued by your speculation about the scenario, but I’m afraid this proposal would never happen. You’ve outlined some clear advantages for consumers and for Verizon, but AT&T would basically be opening up the emergency exit doors to hordes of frustrated subscribers and their associated subscription dollars. Betting on the return of these customers after they switch to Verizon isn’t a safe business bet. Ed Whiteacre may be off learning about how to run a car company, but the new leadership at AT&T isn’t going to hope that Verizon disappoints their former customers just so they might get a chance to point, laugh, and say “I told you so.” It might feel good to watch Verizon struggle, but that doesn’t put lost subscription revenues back in the books. The reality of Verizon’s network capabilities may be just as you theorize and said network might begin squealing and smoking so loudly under the load of a massive iPhone user base that we can ALL “hear it now”, but that’s not a driver that would force an AT&T decision to re-negotiate an extremely profitable exclusivity agreement with Apple.

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