Katie MarsalThis week, Pali Research released a prediction that AT&T will net less than 1 million new subscribers in 2010, compared with the 4 million it gained in 2008. The report operates under the assumption that the iPhone will leap to Verizon's network once the contract has expired.
The statement comes as AT&T is pushing to keep Apple's phone exclusively on their network through 2011. The Wall Street Journal has reported, through anonymous sources, that CEO Randall Stephenson is currently negotiating with Apple. iPhone-AT&T exclusivity in the U.S. expires next year.
If Pali Research is to be believed, AT&T's future could depend on retention of the iPhone, making Stephenson's alleged negotiations all the more crucial.
"As the iPhone exclusivity period rolls off between AT&T Wireless and Apple, a material number of AT&T customers will flock to Verizon’s superior network," the firm states. "We estimate that nearly a third of AT&T’s post-paid customers are being retained by AT&T primarily because of the iPhone exclusivity."
The market research firm based its conclusion on two recent studies that show AT&T has 3G speeds that lag behind Verizon, T-Mobile and Sprint. The study from Wired, with a sampling of 12,000 mobile phone customers, demonstrated that AT&T has ">an average download speed
This, despite numerous attempts by the company to boost bandwidth capacity for the iPhone and the network's influx of users.
This year, it was estimated that a third of AT&T's new customers are switching solely because of the iPhone. The same study from ChangeWave suggests that AT&T customers are also less likely to switch carriers.
Pali Research recently gave investors a buy rating for Verizon and sell for AT&T, based on the latter's dependence on the iPhone.
"Our Buy rating on Verizon is based on our view that its market share gains will lead to profit growth that tops other telecom companies and Wall Street consensus estimates," the firm said in June. "Our Sell rating on AT&T is based primarily on our belief that its wireless business will enter a prolonged period of erosion after being propped up by the iPhone for the past two years."
William Gallagher
Christine McKee
Stephen Silver
Charles Martin
Amber Neely
140 Comments
BRING IT ON VERIZON.. i would switch to them in a heartbeat . ATT has THE WORST coverage in my city New York City and I am sick of the bad reception and dropped calls , plus all my friends and family members have verizon and i could take advantage of my current verizon DSL plan by bundling it with my iphone ... bye bye ATT, HELLO VERIZON ... can you hear me now???
It isn't that simple. The iPhone increases the strain on anyones 3G network, since it ups usage. Thus speeds are lower. I'm in Canada, so really don't know how the two stack up, but Verizons average 3G speeds will drop if they get the iPhone. On the flip side, AT&T's speeds will increase as iPhone users vacate the carrier, so there should be a floor where AT&T would stop losing users due to 3G speeds.
BRING IT ON VERIZON.. i would switch to them in a heartbeat . ATT has THE WORST coverage in my city New York City and I am sick of the bad reception and dropped calls , plus all my friends and family members have verizon and i could take advantage of my current verizon DSL plan by bundling it with my iphone ... bye bye ATT, HELLO VERIZON ... can you hear me now???
Get out of your fantasy world. Verizon sucks the big one. At&t rules the roost in terms of reliability and service. For every one of you there two at&t customers who are perfectly satisfied. The "grass is always greener" syndrome is alive and well.
This article completely ignores that fact that the current hardware will not work on Verizon. Sure people might switch as contracts expire with AT&T if there is new, subsidized hardware on verizon. I would not expect the stampede they seem to be implying. At least not in switchers from AT&T, maybe Verizon will see a stampede in upgrades.
I'm okay with AT&T for the most part. They have been a pretty good provider for our businss phone needs over the years. I am not entirely satisfied with the voice quality of their cell network but the coverage is improving. If iPhone had all the same features on Verizon and the call quality was better, then I would probably switch back to them on my next iPhone. I don't do much international travel and I am not in rural areas very often either, so for me it is all about the voice quality.