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AT&T: Bigger, Better, Faster


Why the telecom giant won't let its critics beat it down.

Editor's Note: Welcome to Love It or Hate It, a regular dual-column feature that will capture the love-hate relationship America has with some of its biggest, most controversial companies. For past columns, click here. For the opposing view on AT&T, see AT&T: Run Like It Really Wants to Lose.

Any company with more than 85 million customers is going to hear complaints, and AT&T (T) is no exception. But for the real customer satisfaction story, ignore the unscientific Consumer Reports surveys and focus instead on the numbers.

Late last year, AT&T reported that churn, or turnover of existing subscribers, reached a new record low of just 1.17%. Despite the onslaught of criticism in the media, profit at AT&T during the fourth quarter of 2009 rose 26% year-over-year, wireless revenue rose 9.2%, and 2.7 million subscribers were added.

Indeed, if AT&T was as horrible as one would believe if they only paid attention to cocktail party chatter and blog posts, Fortune magazine wouldn't have named it 2009's Most Admired Company in the telecommunications industry. It was the 11th time in 14 years AT&T was recognized as such, joining other corporations ranked best in class such as Procter & Gamble (PG), Visa (V), Walmart (WMT), and FedEx (FDX).

Randall Stross of the New York Times recently set out to independently verify the claims in a Consumer Reports survey that Verizon's service was superior to AT&T. He was "astonished to discover that [the findings were] exactly wrong." Paul Griff, chief executive of network testing firm Root Wireless, told Stross that AT&T had "faster average download speeds and had signal strength of 75% or better more frequently than did Verizon." Paul Carter, president of Global Wireless Solutions, a company that performs network tests for major carriers, said that "AT&T's data throughput is 40% to 50% higher than the competition, including Verizon."

Not only is there nothing to hate about AT&T, there is everything to love.

While AT&T's exclusive relationship with Apple (AAPL) has been a boon to business, it has also offered invaluable lessons about how to deal with a sudden spike in mobile data. When the iPhone was introduced, Apple CEO Steve Jobs expected the device to take 1% of the market. His numbers were off by 42.4 million units, and Apple cornered 14% of the global smartphone market. Since the iPhone 3G launched in 2008, AT&T's network activity has jumped by 4,000%.

While other players in the industry watch from the sidelines in comfort, AT&T is addressing its issues one by one. Some iPhone customers may still find reasons to complain, but chances are they are sticking with the iPhone and the AT&T service anyway.

In fact, many customers could not be more pleased with AT&T. Formerly the chief executive of a mutual fund company -- an industry built on customer service -- AT&T's newest customer said he switched from Verizon after nearly 20 years and he couldn't be happier with the service he's received so far.

"My bills always seemed to creep up with Verizon," he recalled. "I'd call to complain and they'd adjust it, but about three months later, the bills would start creeping up again. Verizon also never took a proactive approach to helping me manage my expenditures by suggesting the best rate plans for my usage patterns on the Family Plan."

And now?

"AT&T was more helpful than I ever expected. I didn't even have to call Verizon to cancel my service -- AT&T took care of it for me. They also are monitoring my account for efficiencies, made activation a cinch, and my bills are one-half to one-third what my Verizon bills were."

Plus, AT&T underpromised and overdelivered.

"They said they'd send me my new phones within two weeks," he said. "In fact, I had five regular phones in one business day and two iPhones in three business days."

Need more reason to love AT&T? It has a social conscience not typically seen in organizations of its size.

In 2009, it was named one of the 40 Best Companies for Diversity by Black Enterprise magazine in recognition of its strengths in the areas of employee base and supplier diversity for the fourth year running.

AT&T was also ranked number two of the 50 Best Companies for Latinas to Work For in the US by Latina Style Magazine. It also received a perfect score of 100 in the Human Rights Campaign Corporate Equality Index of companies that support LGBT Equality.

The company has built roughly 70 calling centers to date in Iraq, Kuwait, and Afghanistan and has donated nearly $8 million worth of prepaid calling cards for military personnel.

Perhaps it's time for all the naysayers -- people who stay glued to Gizmodo and for 14 hours a day -- to take a deep breath and get a grip on themselves.

Maybe they can funnel all that extra energy into developing an app that prevents technology dorks from incessantly whining about AT&T.
No positions in stocks mentioned.
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