Monthly Archives: October 2011

iPhone 4S: At&t Killer

At&t Rethink Possible

Imminently, Apple has announcedwill be announcing the new iPhone. It may be the iPhone 5 or  is the iPhone 4S or both, but either way, here’s why I think it’s really bad news for At&t:

1. It’s seems confirmed that Sprint will get some version of the new iPhone giving At&t customers yet another carrier option to defect to, one with both a pretty good network and very good prices/customer service. Also, there are many folks with families or corporations still on Sprint who would jump at the chance to switch back to Sprint.

2.  The myth about At&t’s service getting better once some of its traffic was offloaded to Verizon iPhones has been disproven.  Those of us still on At&t can attest that the network is still awful in every way – voice, data, coverage, etc.

3. Many people, like myself who bought the iPhone 4 on At&t as soon as it came out were tempted by the Verizon iPhone launch but decided to wait for the next generation phone – we all initially thought it would arrive in June, but kept waiting for “fall”, all hoping for September. We’ve held on this long and are itching to rid ourselves of the At&t shackles. See here for evidence of people planning to switch.

4. The onerous contract termination penalties for leaving At&t ($325) have abated some, as they decrease by $10 each month, so those who bought the iPhone when it first came out will only owe $175 in termination vs. $245 in February.  This will be a nice cushion of revenue for At&t but one time only….

5. International Roaming – One big knock on the Verizon iPhone is that it is CDMA only.  This means that  it won’t work in most of the world, which uses GSM network technology.  The strong rumor and likelihood is that all the new iPhones will be dual-mode and thus Verizon and Sprint subscribers will be able to roam internationally too. Another barrier down.

6. Sprint’s entry into the iPhone arena with more competitive pricing and simpler plans (e.g. unlimited data) will put pressure on At&t to match this pricing structure and reduce their monthly revenues.

7. I don’t think that any of these dynamics will help At&t defend their anti-trust case to purchase T-Mobile:

– Sprint will show that a smaller carrier can compete and doesn’t need to merge for the sake of spectrum or otherwise.

– At&t will have lower data growth hence less ability to show that they need to acquire T-Mobile for more spectrum/bandwidth.

– It will be even clearer that At&t’s goals are to limit competition.

In summary, At&t’s absurd ad slogan/tagline will take on new meaning:

“Rethink Possible” can now mean:

1. Did you think it was possible to blow a 4 year head-start with an exclusive for the most transformative mobile device of all time?

2. Did you think it was possible to continue to have the worst network in the most important cities in the US for 4 years despite every opportunity to improve?

3. Did you think it was possible to get people to pay $100+ per month for “mobile phone” service yet to not be able to place or hold a phone call at all in major metro areas like NY or SF?

4. Did you think it was possible to put up every obstacle to keep people from switching away from your service (e.g. absurdly high termination fees) and yet still lose millions of long-term subscribers?

At&t, Rethink Possible.