The Great AT&T/Verizon Wireless Smackdown

November 25th, 2009

It’s sometimes hard to believe that AT&T was once this huge telecommunications conglomerate that encompassed the entire length and breadth of the U.S. before an antitrust action separated Big Bell into Baby Bells. Well, mergers and acquisitions have fattened what was left of AT&T and Verizon, and left smaller players on the fringes. Qwest, another Baby Bell, continues to struggle to justify its existence.

However, AT&T and Verizon Wireless have mostly kept their hands off each other when it comes to advertising. Verizon stresses its network quality, where AT&T has the iPhone, and there’s always “an app for that” to buttress their claims of superiority.

More recently, Verizon has decided to go for the jugular and is attacking AT&T as the result of its well-known network shortcomings. So you know that Verizon has a much larger 3G network footprint when it comes to square miles of coverage, whereas they actually reach around 20% more people overall. However, their recent “there’s a map for that” campaign leaves the AT&T coverage map mostly blank, conveying the misleading impression that the competition has no coverage whatever in most of the country.

Well, AT&T’s efforts to get the courts to put a stop to the questionable claims got shot down by the courts. Verizon is simply claiming that its map is limited to 3G coverage, and is thus accurate.

To fight back, AT&T has contracted with actor Luke Wilson to deliver ads meant to demonstrate just how much coverage they have, although that coverage also includes the larger but slower EDGE network, and they really don’t draw the distinction. Apple has also jumped into the fray with its own ads demonstrating a huge flaw in Verizon’s 3G system, one that prevents you from talking on the phone and consulting  email or checking a site at the same time. Even though the iPhone is dinged for its lack of true multitasking support, there are a few areas where you can do two things at once, and this can be a huge advantage under some circumstances.

The problem with comparative advertising is that the parties involved will sugarcoat the information that favors them and exaggerate the competition’s shortcomings. The truth tends to lie in the middle.

So it is quite true that network quality on Verizon is superior to AT&T. Then again, Verizon doesn’t have an iPhone hogging network capacity, and I wonder if they’d feel so smug if they had anything near as popular. And the Motorola Droid, though it’s done fairly well out of the gate, doesn’t exhibit any evidence of matching Apple’s smartphone in terms of sales.

Indeed, fully 50% of mobile Web access can be attributed — or blamed — on the iPhone. In all fairness to AT&T, as it pours loads of cash into improving its network, I don’t think they anticipated just how the iPhone would emancipate its user base to huge much more bandwidth than any other mobile device.

On the other hand, they still have lots of explaining to do. In the January 2010 issue of Consumer Reports, there’s a fairly extensive roundup of wireless carriers, service plans and handsets. According to the magazine’s reader surveys, AT&T rates dead last when it comes to call quality and reliability in most major U.S. cities.

But there are some questions about these ratings that require further details. Usually, CR tallies these results based on its annual questionnaires, sent to all paid subscribers. Since there’s no way to predict which readers are actually going to take the time to fill out and return the surveys, which contain extremely nonspecific questions, you can hardly call the results scientific. Well, at least they’re random, and I’ll grant that CR is recording the data accurately.

However, there’s one huge mistake in another section of the issue, covering computer lab tests, where CR claims that “Apple increased the size and brightness of its new iMac displays without hefty price increases.”

In fact, there were no price increases. The new models cost pretty much the same as the old for most configurations, and for some, they are actually cheaper. There’s also a misleading comparison with a Dell Studio XPS SX8000-2361 desktop, listing for $1,020, compared to the $1,199 you pay for the basic iMac. The casual reader will think that the Dell, sporting Intel’s quad-core i7 processor, is a much better deal.

This calls for a reality check. You see the Dell Studio XPS is a standard minitower, not an all-in-one computer. Regardless, the price increases to over $1,600 when you configure that box with a low-end 21.5-inch display, a decent range of bundled software, but without a Bluetooth option. Leave it to CR to gloss over the fine details.

But in the end, the real issue on the table here is AT&T’s network quality. Even assuming the CR survey is accurate, the last reader questionnaire went out weeks before the April 2009 issue appeared, making it months old. AT&T claims asserts it’s working hard to improve network capacity, performance and reliability. Little of that, alas, would be reflected in CR’s ratings.

In the end, AT&T can surely do better, and I think they have had their shortcomings thrown in their face quite a bit in recent months. Maybe they’ll get the message before Apple does contract with Verizon to deliver the iPhone on their network, even if you’d be forced to use Wi-Fi to be able to talk and read email at the same time.

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8 Responses to “The Great AT&T/Verizon Wireless Smackdown”

  1. Steve W says:

    I worked for the Bell System at the time of the breakup. We figured it would last about 25 years. The 25 years are up! It’s time for AT&T and Verizon to merge.

    Admit it – that’s what we all want.

    Happy Thanksgiving.

  2. Louis Wheeler says:

    One thing that I am grateful for this Thanksgiving is your presence on the Web, Gene. We have our differences politically, but I consider you to be one of the few honest, sincere and generous liberals that I know. I appreciate that you are not a propagandist on your technical web site.

    I agree with most of your technical evaluations as I did with this article. It is a reasonable and balanced viewpoint.

    Congress’ break up of Ma Bell’s monopoly was badly done in 1995, because it did not provide for freedom or competition. It created local monopolies which have been recombining. This is why service in the US is so balkanized.

    The iPhone has been a way out of this mess, but the technology is not, yet, present.

    AT&T started off way behind the technological curve, but it has been spending many billions every year to upgrade its service. Meanwhile, the success of the iPhone is revealing how poor the networks are; the iPhone comprises 3% of AT&T’s mobile phones, but is consuming half of the web use. The result is that the iPhone’s success means continued poor service. What happens when the iPhone is 50% of AT&T’s mobile phones? Gridlock?

    The mobile market is moving away from its local monopolies and toward nation wide competing networks. Verizon’s 3G network is better for phones, but its web use is poor and its Wi-Fi is nonexistent.

    The new Apple ads are quite good in pointing out that you can access the web while using the Phone. This is how a consumer wants to use a phone. It will be many years before Verizon can offer the same service. So, we will have to put up with the problems of growth, because there are no immediate solutions.

    I’ve nothing against Verizon fighting back against the iPhone’s success. It’s too bad that they cannot do a better job of competing with Apple’s hardware. An advertising offensive which tells only part of the truth will not serve them.

    Apple is doing a fine job of providing its customers with value. It’s products are first rate. I wish Apple would start using tag lines which emphasize the Mac’s sensual qualities, “Sometimes, I cost more, but I’m worth it” or “If I were cheap and gaudy, you wouldn’t want me” or “If I weren’t a pleasure to touch, you wouldn’t lay a hand on me.”

    Ads complaining about the PC’s inadequacies are getting old; most Wintel customers know this fact. Apple needs a positive message. Apple’s Macintosh needs to be as sexy as a Porsche.

    • MacTechNM says:

      @Louis Wheeler, Re: The new Apple ads are quite good in pointing out that you can access the web while using the Phone. This is how a consumer wants to use a phone…… Oh, Really? I have been using cell phones since 1995, and have owned the original and also the 3G iPhone, and I have also owned a BlackBerry 8700, BlackBerry Curve, BlackBerry Storm, BlackBerry Tour, and now, the Motorola Droid. I can’t imagine a single time where I have ever needed to say to the person I am talking to… “Please hold, I just had a very important email come in”. 1. That’s just plain RUDE. 2. Well, just refer back to 1. For me a least, the ability to talk and browse is a non-issue. I do realize some people may need to though.

      Regarding Gene’s comments about Verizon Wireless, which is NOT “Verizon”, although Verizon Communications does own a huge share of Verizon Wireless, they are two separate companies with some major differences. I wish people would stop referring to “Verizon” in the generic sense of the word, like “Aspirin”. For one, VZW DOES NOT use overseas contractors for their call center customer support & technical support, whereas Verizon Communications does. Also, Verizon Wireless, of whom I am an employee, has far better quality customer service.

      Now… Regarding Verizon Wireless’ new Ads fighting AT & T Wireless/iPhone, I can certainly see both sides of the issue. Before I moved my cell service to Verizon, I really didn’t know what I was missing. Being able to use my cell phone to reliably place calls in Northern New Mexico, in the mountains, above 9000 feet elevation for instance, or being able to send & receive text messages, while on a Southwest Airlines plane at 35,000 feet! Try that with AT & T! (and don’t even get me started about “it’s not safe to use a cell phone on a plane, BS!)

      I just recently moved my cell service to Verizon Wireless (within the last year), and I kept thinking to myself, VZW needs better phones if they truly want to compete with the iPhone. Now, as a previous iPhone owner, and a current Motorola Droid owner, and a professional in the computer industry for over 15 years, I think I can accurately assess what makes a phone “Great”, versus just being mediocre. Does the Droid come close to the user experience on the iPhone? I believe it does. Are there things that can be done on the iPhone that you can’t do on the Droid. Well, that depends on what you mean…. All my needs are met by the Droid. Can I easily access my music & vides (on a screen twice the rsolution of the iPhone), Yep. Can easily make calls. Yep. Can I easily text and send mms. Yep. Can I use Google Chat. Yep. Can I play Cowabunga… hmmm, Nope. You got me there iPhone. 🙂 Just kidding… Can I apply Widgets to my home screens (now increased to 7 thanks to Open Home). Yep. Can I change my background picture at wll, or rotate background pictures? Yep. Can the iPhone? Nope. Oh, sure, someone said you can apply background pictures on the iPhone, and yes, that is true, but only on the lock screen (unless the phone is hacked). Can I pinch and zoom the browser on the Droid, no, but with double the pixels of the iphone, I have rarely found the need to zoom in.

      So, all in all, I love my Droid, It, and the HTC Eris, are the phones VZW has needed for a long time, and we are just getting started! These comments are coming from a long time Apple fan. I loved my iPhone when I had it, but Apple has to continue to evolve, or they will fall behind.

      P.S. I have not included my real name, because of the fact that I work for Verizon Wireless. I also want to point out that any comments and opinions here are my own, and not Verizon Wireless viewpoints necessarily.

  3. Louis Wheeler says:

    The point about being polite, MacTechNM, is that you ask. You say, “Excuse me, I’ve been expecting an important email, but I don’t want to give up your call. Will you give me a few seconds to look at it?”

    There are people who multitask. They tend to drive ordinary people bonkers, but they comprise an important segment of the Smart Phone market. Why shouldn’t Apple go for them? Why shouldn’t Apple crow about its features?

    The smart phone market is bound to increase. I would guess that most of the iPhone’s 30 million customers came from feature phone users. That is fine, people like yourself were being served adequately by the then current Smart Phones. They liked those little keys.

    Competition is great. Both you and the iPhone users get what you want. Every technical products has its flaws and deficiencies, but they diminish over time. Or more, properly, the product narrows in on the tastes of its customers.

    Meanwhile, there are a billion feature phone users to attract to the iPhone or the Droid.There is no need to get desperate for customers. Or to overstate the truth.

  4. Jeff says:

    I am a satisfied AT&T/iPhone customer and will remain so. My experiences with Verizon have been quite negative and I have no plans to use Verizon ever. I would go to T-Mobile or Sprint before giving any business to Verizon again.

    So a Verizon employee believes that Verizon’s service is better than AT&T’s. Hardly objective if you ask me.

    Verizon turned down the iPhone when it was first offered to them. Now they want it back. Tough luck. This latest round ensures that they will likely never see an Apple product on their network.

    Verizon is simply GTE with a new name. They are so certain that the droid would make a big splash in the market that they raised all of the early termination fees on the device. Nice vote of confidence.

    The reality is that AT&T has improved their network by orders of magnitude. I know as I used to be on Cingular wireless before they changed their name to AT&T. They are continuing to improve coverage quite nicely too. I am continually surprised by the ever increasing reach in the rural northwest.

    Apple is coming out with new devices and new iPhones that will take advantage of their acquisition of PA Semi. Motorola’s offering will definitely pale in comparison. People are definitely going to know why Verizon made their early termination fees so expensive.

    In the meantime at least 5 of my family members have defected from Verizon to AT&T. All for the iPhone and we are definitely waiting for the successor to the 3GS.

    • @Jeff, I agree AT&T’s network is improving, at least in the Phoenix area. I’m sure the unexpected demands of the iPhone on their network forced them to spend more money to build out the system, which is good. I also ran into difficulties with Verizon, mostly support related. Support at AT&T is good and connection quality is getting better. At least here. In other cities, who knows?


  5. Louis Wheeler says:

    Don’t be too hard on Verizon, Jeff, the mobile phone market was bollixed up many years ago, before the iPhone. It was a natural consequence of bad politics in the break up of Ma Bell. Verizon placed its priorities on the 3G phone part of the service and is now having to play catch up on the mobile web side. We are moving out of that proprietary mess toward competition using the open standards and frequencies. But, that won’t occur for three to five years.

    You expect companies to shade the truth in their advertisements to gain a momentary advantage. That is why we consumers take ads with a grain of salt. It turns out that the situation in the mobile market is more complex than we were lead to expect. AT&T is going through some necessary growth problems which will take years to fix. And Verizon is no solution, but it will take some time for the mental midgets to catch on.

    The successor to the iPhone 3Gs should be impressive with the ARM Cortex A9 dual core processor. But, we are likely to see it first on any tablet computer Apple puts out, if it does.

  6. Jeff says:

    I didn’t mean to be too hard on Verizon in all actuality, but was treated pretty poorly by their billing department. Their practices are nearly identical to those of the old GTE in which my experiences were also quite poor. GTE/Sprint could never get their billing figured out and my experience was so soured that I vowed never to use GTE again. I did go back to Sprint for cellular service for a period of time and found their service and support actually quite satisfactory apart from GTE.

    Unfortunately, Sprint’s coverage of the inland northwest was a little too spotty and I went with Verizon for wireless service as I had them also for POTS service. I was willing to give the company a second chance even if GTE was now a part, as it was a baby bell that purchased GTE, not the other way around. Needless to say, when it came to replacing a cell phone that gave up the ghost, Verizon treated me like a criminal when I wanted to activate my old Sprint CDMA phone on their network. I canceled the service and moved close to the same time. I thought I had paid the final bill, but there must have been some extra charges I wasn’t aware of. It wasn’t more than a few dollars. Well, true to form, like the old GTE, I was referred to a collection agency. The bill had ballooned to something like $40 which wasn’t a big deal. But the referral to collections without any effort to contact me at my new address seemed over the top. The collection agency was certainly able to track me down.

    I went with Cingular and have been with them now for several years. I did notice an impact on service with the introduction of the iPhone. There were certainly more dropped calls and difficulties, but for the sake of having a superior mobile phone, it was tolerable. And over the years, AT&T’s service and coverage have continued to noticeably improve. I have been quite satisfied. AT&T’s customer support has also been very good to me. I don’t think I would be leaving AT&T even if another network were to obtain a device superior to the iPhone. Besides, AT&T allows a simple SIM card swap and I can use another phone without having to deal with the customer service reps like at Verizon who gave me grief in trying to activate a non-Verizon phone on their network.

    Even when the 3GS came out, AT&T caved to the pressure of their customers and allowed existing 3G users to upgrade without paying the full price for the upgrade. I am pretty certain Verizon wireless would have held firm against doing so. Their increased early termination fees for obtaining a Droid are an indication of how the company does business. It makes no sense as the increased early termination fees would detract from potential defectors who might like to give the Droid a try. As an iPhone user who is anticipating the replacement to the 3GS in approximately 6 months, it makes little sense to lock into the Droid for 2 years when a superior device is likely just around the corner.

    Motorola/Android or any other company/Android won’t be able to compete anytime soon against the upcoming versions of the iPhone. Verizon’s corporate executives must know this. I will say that they did pull off quite a feat in putting out a product that matches the current iPhone in overall experience.

    Apple may have gotten a little blind-sided, but they aren’t sitting still. A new iPhone is in the works and we haven’t yet seen the fruits of the PA Semi acquisition.

    Next time, Apple will be ready. As in the case of Microsoft finally making the Zune better than the classic iPod, Apple changes the game with the iPod touch. Motorola did manage to not get scooped by Apple’s 3GS successor at the present time. However, the successor is coming. The question is whether Samsung, Texas Instruments or Intel will be able to keep up with Apple’s low power processor developments. Motorola and Verizon had better hope and pray. It will be much easier for AT&T to match Verizon’s network, I would think, than for Motorola, HTC, etc. to match the upcoming iPhone.

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