AT&T Acknowledges Impact of Defecting iPhone Users

by Matt Klassen on March 8, 2011

When AT&T lost its iPhone exclusivity rights early last month, speculation abounded regarding the number of disgruntled iPhone users that would seek out the relatively greener—if not more stable—pastures of Verizon’s wireless network.

Although any of us covering the mobile market have yet to see any hard numbers in this regard, AT&T has finally acknowledged the impact the Verizon iPhone has had on its consumer base, which is to say it completely downplayed any impact at all.

In fact, while speaking at a Morgan Stanley technology conference in San Francisco earlier this week, head of AT&T Mobility and Consumer Markets Ralph de la Vega opaquely stated that the company is not at all surprised by the level of iPhone defections, noting that everything is well within the company’s expectations.

The difficulty with such a statement is clear: what were AT&T’s expectations? Did they expect a significant percentage of their iPhone customers to jump ship, or is the defection rate significantly lower than assumed?

Initially it seems that Verizon may not be draw that most of us in the tech world assumed it would be. Sure for some disgruntled AT&T customers it was a God-send to finally have an alternative carrier for the iPhone 4, but amidst fears that Verizon may not get the iPhone 5 this summer and the fact that many customers feared AT&T’s stringent early cancellation fees, it looks like many customers have chosen to stand pat.

In fact, adding to his vague repertoire of answers, de la Vega noted that trends in both the family and business phone plans tended to be “retentive in nature,” since the release of the Verizon iPhone, which I would assume means that AT&T is not hemorrhaging users at quite the rate we all thought.

While I will admit that I expected a mass exodus to Verizon—and who’s to say it hasn’t happened?—I did conversely anticipate a lacklustre reception for the Verizon iPhone, simply for the fact that in the mobile world it’s already old news. Had Verizon released the iPhone 5 or a LTE version then things would have been different, but it released a phone that was already, for all intents and purposes, on its way out the door. Further, with AT&T’s iPhone beating its Verizon rival on download speeds in recent tests, customers may have even more reason to stick with AT&T.

I think the real battle for iPhone customers will come this summer with the anticipated release of the iPhone 5. If Verizon does get the next iteration of Apple’s popular smartphone along with AT&T, it will assuredly spark a mobile battle the likes of which we have never seen.

Until then we are left to wonder just how deep the Verizon iPhone cut into AT&T’s customer base, offered only the consolation that however deep, “it was pretty much within [AT&T’s] expectations.”

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