Economic Snapshot: AT&T Still iPhone's Biggest Flaw

By Mike Schuster Sep 25, 2009 3:30 pm
Glitchy, outmoded service at odds with innovation.
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After toying with the hearts of iPhone users since Apple (AAPL) unveiled the first model, today marks AT&T's (T) much-anticipated nationwide activation of Multimedia Messaging Service (MMS) for the popular smartphone. A move that screams "It's about time," the feature launch will allow iPhone users to finally send pictures, video, audio, and contact information without having to compose an email.

Once the digital dam is broken, AT&T insiders expect to see a usage increase of roughly 40% today -- according to DSLreports.com -- coming from folks anxious to unleash a torrent of party photos to their hungover friends. However, a handful of iPhone users discovered that MMS had been enabled last week -- likely due to some preliminary network testing. And if this week's outage is any indication, AT&T needs to seriously scramble to handle the workload.

But if you ask any iPhone user, MMS is far too small of a recompense for more than two years of abhorrent service -- one that no amount of last-minute tinkering could ever fix.

AT&T and Apple's exclusivity contract is the bane of every iPhone owner and often the deal-breaker for people interested in owning the device. That contract is set to expire in 2010, and customers -- existing and potential -- are begging Apple to consider branching out to Verizon (VZ) and to a lesser extent, T-Mobile (DT) and Sprint (S). Given the public's push for options in wireless coverage, Apple would be extremely foolish to stick with a much-maligned provider.

Aside from the slow rollout for MMS, iPhone owners have decried everything from terrible coverage to delayed voicemail messages to having a hand in disabling apps. In an article entitled AT&T Takes the Phone Out of iPhone, CNet scribe Elinor Mills wrote a celebrated attack against AT&T's ongoing indifference into improving its service. She cited the routinely dropped calls and poor reception despite close proximity to urban areas. Mills also spoke with AT&T spokesman Mark Siegel -- who had an unsurprising adverse reaction toward her polling users for their AT&T horror stories.


"So you are actively asking folks to submit their experiences? Sorry, but you and I have a basic disagreement about why you are doing this story. What is the news here beyond what others have covered?" Siegel wrote in an email.

Well Mark, perhaps Mills -- like many other users -- is utterly fed up with the service unfit for what is the most popular smartphone in the country, and she's attempting to bring this to your attention. You know, since your company is continuing to ignore the accounts of everyone else.

But until the exclusivity contract runs out or Apple comes to its senses -- whichever comes first -- iPhone users are stuck with a great device on a sub-par network. And in the meantime, AT&T will keep spewing excuses as to why mere adequacy is simply beyond their reach.

In light of the provider's ongoing ineptitude with the iPhone, Minyanville analyzes some of the recent business strategies AT&T has displayed in the last two years and surmises its intention behind each botched move.



 

AT&T Still iPhone's Biggest Flaw

 
AT&T loves its customers so much, it's willing to make its service reprehensible to persuade Apple into ending its exclusive iPhone coverage
 

 

Spotty coverage and repeated dropped calls are in the interest of privacy and quelling work fatigue

 



iPhone users experience a deep sense of unspoken camaraderie when dealing with overloaded networks in urban areas



Exorbitant upgrade fees for existing iPhone owners indirectly keep Apple from making older models obsolete
 

Involvement in blocking the Google Voice app was simply to get better acquainted with old friends in the FCC
 

 

MMS only encourages fuzzy, low-res smartphone photography
 

 

 

Slow 3G networks signals a push for widespread public wi-fi
           
By delaying arrival times of voicemail, callers are pleasantly surprised to hear from the recipient three weeks after the call had been forgotten
 
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(5)
2009-09-25 16:18:20
Verizon rejected iPhone
Verizon had the first opportunity to be the exclusive iPhone reseller, they would not except Apple's terms. AT&T was the second choice, they agreed to the terms, took the risk (iPhones future success was unknown)invested billions in upgrading the net work, spent millions to subsidize the cost of the phone to lower the upfront cost, etc. They continue to build out the network – unless of course the FCC fu*ks that up.
If AT&T had also rejected the iPhone, do you think it would have enjoyed the same success? I don't think so.
TWN
2009-09-25 17:26:06
Grass always greener on the other network
I don't know about this. I've had both good and bad experiences with Sprint, Verizon and ATT. I would say overall my ATT experience has been the best, but of course the companies leapfrog each other with new technologies and new antennas etc. I suspect that when the dust settles and people have their opportunity to use the iPhone on whatever network they might desire (I think mostly we're hearing carping from Verizon folks,) they will find that there are flaws in every service provider. The good thing might be that spreading the bandwidth-intense iPhone traffic from one network to several might improve response from all service providers. I can't wait to see the next litany of service complaints once the iPhone is opened up. Come back and read this in 2010.
2009-09-26 00:25:35
iPhone and AT&T
The iPhone is by far the most user friendly and welcome gadget out there. Verizon and Sprint has nothing that even come close to the iPhone.
AT&T is in a storm of users who use data like never before in US history. ARPU has gone up steady since introduction of the iPhone.
Has there been issues, yes of course. Has there been issues when going to the moon, yes of course.
The only exciting in telecom is the iPhone. I know that AT&T will succeed in supporting iPhone like they have for several years.
Happy iPhone customer since 3 years...and 9 years of satisfied SWB/Cingular/AT&T customer...
2009-09-27 22:10:48
Does this guy work for VZ or what??
I have been using an iPhone for 2.5 years and it performs great on AT&T's network. If any other provider had the iPhone they would collapse under the data load that it puts on their network. No other provider has the resources to come close to keeping up with network upgrades required for the iPhone.
2009-09-28 01:10:06
AT&T the worst
I completely agree with the article. I've had Verizon and Sprint, and ATT doesn't compare. It's ridiculous to have a phone with so many great features and have all the connection problems, voicemails hours later, etc. PC World tested the phone providers nationwide, and ATT ranked way down below Sprint and Verizon in the quality of connections and downloading data. Really speaks badly of Apple imo for going with a subpar provider like this.
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