Computers-Plus

As we approach the 3rd anniversary of the iPhone and AT&T marriage, iPhone users can agree on one thing and that is, AT&T is missing the mark. So why would iPhone users feel this way?

To begin with, about a quarter of AT&T’s 81 million wireless subscribers use iPhones as their mobile phone of choice. The iPhone allows users to runs Apps like Pandora, YouTube, and others that stream hundreds and thousands of megabytes of music and video over the airwaves. This of course presents a problem, unlike the data plan that is “unlimited,” AT&T’s capacity is not. AT&T contends that 3% of their smart-phone subscribers account for 40% of data traffic.

As a result of the huge bandwidth requirements of iPhone users in densely populated cities like New York and San Francisco (whose networks need updating), there have been an increased number of service interruptions and slow 3G performance which have iPhone users in those areas fuming. Ralph de la Vega, chief executive of AT&T confirmed this when he stated that their networks in Manhattan and San Francisco “…are performing at levels below their standards.” With admissions like this many wonder if AT&T bit more than it could chew when it started selling the iPhone with unlimited data plans.

But can all the blame be placed on the fact that 3% of smart phone subscribers account for 40% of the data traffic? Not really. AT&T should have been more proactive when they saw the amount of bandwidth that was being consumed by iPhone users. They could have done one of two things, either increase pricing on unlimited plans to bring more revenue for infrastructure improvements or introduce tiered/metered plans which would have slowed down the data consumption of the data hungry three percent. Neither of these two options are very popular because at that time companies like Sprint were offering unlimited everything for $99.99 and tiered data plans are simply out of the question, for now.

Knowing that there is a heavy concentration of iPhone users straining AT&T’s ability to deliver on quality service, why hasn’t Apple pulled from the “exclusivity” deal? How long will Apple allow AT&T’s lack of reliability tarnish the name? It looks as though it will continue, at least for now. Apple announced the iPad this Wednesday and AT&T will be the provider of choice, luckily for AT&T customers the iPad isn’t as portable as the iPhone. This will force many people to use them in Wi-Fi hotspots as opposed to burdening the 3G network. AT&T says that it’s recently poured $2 billion into its network and that users in connectivity-starved cities should see improvements in 2010. In addition , they’ve rolled out free Wi-Fi access on AT&T hotspots throughout the country for current subscribers. This may help alleviate the stress on their network, but with more and more consumers buying the iPhone and the addition of the iPad to the mix, the AT&T network will only get more crowded.

Some analysts contend that the same issues plaguing AT&T would be plaguing Verizon had it accepted the offer from Apple when it did. One has to wonder whether this would be in fact the case considering Verizon has dumped $5 billion more than AT&T in infrastructure improvements in the past five years. Verizon has listened to consumers and is now attacking AT&T’s 3G coverage on TV commercials, stores, and online.

However AT&T has fired back using Luke Wilson with a slew of Ads that show AT&T’s superior data network compared to Verizon…the one thing that stands out is that AT&T’s network does allow web surfing while talking, which Verizon currently does not support. The other item they point out is Smartphone selections with over 100,000 apps…iPhone…hint, hint. They also state that they have the fastest 3G network. What they don’t state is coverage and it looks like Verizon’s beat them there.

So is AT&T enough for the iPhone? Well, that depends on who you speak to, here in Miami I know three people including myself that have little or no problems with 3G coverage or dropped calls, in fact I have reception in places where I have confirmed Sprint (using Blackberry 8820 and Palm Pre) and T-Mobile (using the Dash and the Nexus One) do not work where AT&T does. I can’t speak for Verizon as I have never been a subscriber.

I do think that with net neutrality, capacity limitations, and the increased need for bandwidth and speed, these factors will drive carriers to tiered pricing which would mark the end of the free-for-all we’ve enjoyed these past years. The question is, will any carrier be robust enough to handle our increasing data needs?

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