Last week, we saw the carriers’ growth numbers for Q3 2010, and AT&T completely blew away Verizon with new subscribers. Despite the mass availability of Android phones, Verizon only added 1 million subscribers in Q3, its lowest total in years. AT&T added 2.6 million. It’s now clear why Verizon has finally capitulated and cozied up with Apple – even with tons of Android models, Verizon simply can’t compete with AT&T in terms of new subscriber growth.
The iPhone Effect
Right now, the question du jour among iPhone aficionados is how many net subscribers will leave AT&T and switch to Verizon once the iPhone becomes a reality in January 2011. That number is going to be a lot larger than people think for a series of compounding reasons.
AT&T’s Network Issues
First off, let’s establish that iPhone service on AT&T has not improved. Dropped calls are one issue. But so are dead connections, intermittent signal, and my personal favorite – the inability to use the phone for voice or data even when you have ‘full signal’. There is a reason why these issues are endemic to iPhones on AT&T, but don’t affect either Android smartphones on Verizon, or iPhones on other GSM carriers worldwide. And it’s hardly ever mentioned by either analysts, the media, or by Apple and AT&T themselves.
The Signaling Issue
I suppose the former community doesn’t understand the issue, and the latter doesn’t want you to know the truth. Earlier this summer, I uncovered the real reasons why AT&T’s network is so terrible, just prior to iPhone 4 and iOS4 being released. Contrary to what’s normally discussed in the press, the issues are not capacity-related. It’s not about the number of cell towers or wireless bandwidth. Instead, they relate to ‘signaling’, control and status information which is communicated back and forth across wireless networks.
Smartphones and Signaling
Smartphones use signaling protocols to communicate with cell towers and other devices on the network. These protocols are complex and require a significant amount of processing power and memory. AT&T’s network, however, seems to be struggling to keep up with this demand.
Verizon’s Advantage
Meanwhile, Verizon has been quietly building out its 4G LTE network, which is expected to provide faster data speeds and improved coverage. This will give iPhone users on Verizon a significant advantage over those on AT&T.
The Consequences of Failure
If AT&T can’t improve its network performance, it risks losing even more subscribers to Verizon. And if Apple decides to cut ties with AT&T altogether, the consequences for the carrier would be severe. It’s a delicate situation, and one that will likely play out over the coming months.
The Future of Wireless
As we move forward, it’s clear that wireless networks will continue to play an increasingly important role in our lives. But as we’ve seen with AT&T, the network itself can be just as important as the device you’re using on it. Will Verizon be able to capitalize on AT&T’s struggles? Only time will tell.
About the Author
Steve Cheney is a seasoned tech industry expert with over 15 years of experience in wireless networks and mobile devices. He currently serves as Head of Business Development at GroupMe, a mobile messaging platform. Steve has worked with some of the biggest names in tech, including Apple, Cisco, Intel, Google, Nokia, Foxconn, and many others.
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