Tag: sprint

AT&T to customers: Drop dead

Ahh, AT&T, you’ve under-provisioned your network and all those iPhones you are more than happy to sell contracts for are making it easy to, you know, do stuff. And you apparently didn’t count on that. For three years running. The result: lots of data in your under-provisioned network. Who do we blame for this oversight? Why, the customers of course:

The carrier has had trouble keeping up with wireless data usage, leading to slow load times and dropped connections. It is upgrading its network to cope, but AT&T’s head of consumer services, Ralph de la Vega, told investors at a UBS conference in New York that it will also give high-bandwidth users incentives to “reduce or modify their usage.”

Translation: usage caps and overage charges, here we come. You iPhone users need to be hobbled like the rest of our customers! It’s like AT&T is fundamentally determined to go into a death-spiral the second ‘Merican iPhone users can go to another network. Which, it appears, is most likely to be T-Mobile. Sure took a long time for Fucktardia to figure out that Verizon is built atop an incompatible network, didn’t it? But just why is AT&T so dependent on iPhone? Weren’t they turning a profit before? Yes, but:

iPhone accounted for roughly 68 percent of [AT&T’s smart-phone/3G] sales [that make up the lions share of overall sales revenue]

[-and-]

Wireless revenues were up 37.2 percent, driven by “messaging, internet access, access to applications and services,” or [the iPhone]

These are very data users (and the attendant revenue spike) that AT&T is both dependent on and has resolved to infuriate. The plan, in a nutshell, is

“Gentlemen, we’ve run our brand into the ground on the back of notoriously poor service, especially in the dense urban environments where our 3G network actually, you know, exists. Lets really, really take it to the next level by nickel and diming these same users in the last year or two of their contracts. That way, north of 40% of our new revenue streams will head for the exits the second exclusivity ends.”

Great plan. So long, AT&T. Been so nice knowing you.

All that said, it’s still unclear to me why Apple doesn’t just buy Sprint, turn it into a dumb-pipes company, and reap the ridiculous profits that result. Mayhaps they (still) will.

Apple:Sprint::Google:Verizon

Why doesn’t Apple just buy Sprint? While they use fundamentally different 3G technologies, it seems to me that Sprint’s WiMax and Clearwire based 4G service lines up better with an iPhone/iTouch world than do any of AT&T or Verizon’s planned services. Such a union certainly makes radically better sense than the total platform switch into a technological dead end that would be involved in switching to seemingly everyone’s favorite prediction hobby-horse: a Verizon-based iPhone network. First off the idea actually works because Sprint’s already rolling out an essentially platform agnostic 4G wireless network, while AT&T is basically testing improvements on its lock-in 3G network and merely promising a similarly proprietary 4G (using LTE, which is also what Verizon and T-Mobile’s current plans map) in select major cities sometime in 2011 or later. Given a choice, do you really think Steve Jobs selects another vendor-tied (and vendor-constrained) proprietary network over a dumb pipe, especially if said pipe can be had for a song and especially after seemingly four decades of dealing with AT&T, the company that can’t even handle MMS, much less tethering?

But, more importantly, an Apple with Sprint suddenly has what the platform has wanted all along: dumb pipes. The phone becomes an app, and many users could/would get by with an iTouch +Skype or GoogleVoice, instantly becoming a product for which there’s (currently) no comparison, really. Then Apple starts building 4G modems into its desktops, laptops, AppleTVs, tablets, and etc… And BOOM: An always on, fully wireless, nationwide distribution network. It puts Apple directly in competition with the other content providers, which seems to me to be where they’ve been going for a while now. Sure, they are still a hardware company, but more and more of that hardware is purpose built to provide access to the Apple’s ever increasing supply of content. It positions them to own, and I mean own the mobile phone space in a way that would end the very term “mobile phone,” as you market connection to the network at a flat rate for unlimited data that covers your mobile and home phone, cable bill, movie downloads, and has potential add-ons like iTunes based rentals and an all-devices app store all the while utterly eviscerating the current mobile telco’s market that rests on $4000/byte SMS, crippled phones, and so forth. They wouldn’t know what hit them, and have shown no capacity to compete in a market shaped in those terms. Makes Apple’s sudden interest in new datacenters start to come into focus, doesn’t it? That’s certainly not the move of a dedicated hardware company…

Add to that mix Sprint’s money- and customer-hemorrhaging performance of late, Apple’s pile of cash and credit, and then stir in this natural future-products synergy…and you’ve got an interesting development cycle going forward. I think the answer may well come when the tablet ships. If Sprint is provisioning the network service to that device, then look out AT&T. You are a very few years away from utter collapse.

In this way, Apple would be Sprint’s white knight in much the way that Verizon hopes Google/Android is theirs. What both of these phone companies don’t seem to realize is that the light they are currently seeing at the end of their tunnels is the dumb-pipes truck bearing down on them.