AT&T’s assertion that customers consume too much data, and its threat to institute tiered pricing rather than providing unlimited data plans is just the latest folly in AT&T’s chaotic struggle to address the myriad challenges facing it. The kitchen sink approach doesn’t appear to have any long-term strategic goal, and is creating more problems than it is solving so far.
AT&T has been faced with a variety of complaints from users, and accusations from competitors. Sprint and T-Mobile are so far behind that unless they join forces they don’t pose any real threat to AT&T’s position as the #2 wireless service provider in the United States, but AT&T is still fighting to keep its iPhone users satisfied while also establishing an identity beyond being the exclusive iPhone provider.
Users have complained of slow and spotty 3G service. Customers have even filed suit against Apple and AT&T for over-saturating the network and failing to live up to the marketing hype around 3G speeds. iPhone users also grumbled about the lack of MMS messaging, which has subsequently been added, and the inability to use the iPhone for data tethering, even though the device itself is capable.
Ramping up to the release of the Droid, Verizon mounted an aggressive marketing campaign which included ads comparing the Droid and the iPhone, as well as ads comparing the 3G coverage of Verizon and AT&T. Verizon has five times the 3G coverage that AT&T does, and AT&T took exception with how its coverage is portrayed in the ads.
AT&T’s lawsuit against Verizon and its attempt to get an injunction barring Verizon from airing the ads backfired on multiple levels. First, the judge rejected the request for an injunction. Second, AT&T simply brought exponentially more attention to the ads, providing Verizon with free marketing. Ultimately, AT&T dropped its lawsuit.
The claim that AT&T has the fastest 3G network appears to be an accurate claim. However, in high-traffic areas–coincidentally areas with a high volume of iPhone users–AT&T is having a hard time keeping up with network bandwidth demands.
The idea that AT&T might take away unlimited data plans and implement some sort of tiered-pricing model to provide ‘incentive’ for users to curb their data consumption is sure to anger the 97 percent of users who aren’t hogging the bandwidth according to AT&T. Perhaps the threat is simply a bluff in the larger battle over net neutrality.
AT&T is a one-trick pony, but that one trick causes as many problems as it solves. When, since ‘if’ seems less likely with each passing day, Apple takes away iPhone exclusivity, AT&T will be left with nothing to compel users to sign up.
Although AT&T dreads the day that it will lose its exclusive distribution of the iPhone, it will be very liberating at the same time. In the meantime, AT&T needs to step back, take a breath, and develop a solid strategic roadmap rather than just throwing stuff at the wall to see what sticks.