Citing a Wired survey as an example in which ATT 3G speed trails its rivals, Walter Piecyk of Pali Research really hit it on the money. Without the iPhone exclusivity, ATT would be in a lot of trouble. Folks, in particular iPhone users, will not tolerate the horrible service, changes, and sub-industry standard network connection.
Despite what Apple says in public about how they love ATT (maybe they do since ATT pays Apple gobs of money), Apple would sooner be rid of them given the poor network ATT puts forth.
For ATT, the general feeling is that its executives are trying to milk the cow for all its worth so long as the iPhone is exclusive to its network. It's not about building long-term relationships with its iPhone customers. If they were, they would be trying very hard (or even harder than they are now) to try to address issues users have bought up.
And this isn't really about the iPhone specifically. It was the lack of network reliability that I left it for T-Mobile in the first place. And just recently, ATT was booed by attendees at Apple's developer conference for not having key iPhone features ready when the newest iPhone, the 3GS, went on sale. In fact to this day, ATT has not provided details on tethering and MMS and provide only a vague "later this summer" time frame.
So, what will happen when Apple starts offering the iPhone on Verizon as most expect it to happen when the 4th generation wireless, LTE, goes online? This is what should be keeping ATT executives up at night as well as their shareholders.
LTE will come to Verizon at least 9 months before ATT even gets started. If a deal is indeed struck between Verizon and Apple, iPhone 4G will be available only through Verizon. ATT will be struck with nothing. Millions will flock to the Verizon and its LTE network. Many of hundreds of thousands will be former ATT customers.
And that is assuming that ATT does not suffer delays with its LTE rollout. The word is that ATT is looking to lock up the iPhone through 2011. Why? Because the iPhone 4G should be out around that time. ATT is looking to lock up users through 2013 when it should have its own LTE network running, thereby, mitigating the damage of the iPhone on other networks and defections.
Piecyk was kind in saying that ATT will add subscribers but at a slower pace. I'm predicting that if ATT doesn't get its act together, it will see a net loss once it no longer have exclusivity to the iPhone or even the iPhone to see in the coming years.
In fact, it may already be too late.
Source: Los Angeles Times
Note: I am always skeptical of analysts especially those on Wall Street. This guy may be a hack working for Verizon Wireless. But in general, the dude's not far from the market on ATT. Just visit forums dedicated to the iPhone and you'll find thousands of posts about ATT's 3G performance and its lack of quality customer service.
Another note: Over at On Apple, I've kept open the possibility that the iPhone might find its way onto another network in 2010, specifically T-Mobile. It all depends on when in 2010 ATT's deal with Apple ends in 2010 and whether Apple decides to throw them a bone and extend the deal through 2011. If the deal does end at midnight of December 31, 2009, Apple can deploy the iPhone with T-Mobile and use this as a bargaining chip against future negotiations with Verizon and ATT.
Last Note: Read the comments from the Los Angeles Times article. It's not about the iPhone and ATT. It's all about ATT. Not one supporting ATT. It's that bad, folks.