samab, I am in agreement with you that VZW has and has been in the lead in postpaid subscribers, churn rate, network reliability, etc. for a long time. And if the iPhone was on VZW, it would be lights out.
But since AT&T picked up iPhone, it's hung in and even started coming back. By late 2006, Verizon wireless (VZW) had passed and was beginning to pull away from AT&T Wireless. VZW had had several consecutive quarters of 18%+ increases in total wireless revenue. But since iPhone's release in mid 2007, AT&T has tied or beaten VZW in every quarter in terms of percentage increase in total wireless revenue. AT&T actually had a slim lead in the last quarter. and it finally passed VZW in total wireless data revenue.
Originally Posted by samab
Verizon has higher data ARPU than AT&T. That's the only thing that matter to Verizon.
1. Using overall data ARPU (includes wholesale and retail, postpaid and prepaid) figure, AT&T is closing the gap.
AT&T: 4Q07- $10.01; 4Q08- $13.50 - 35% yoy gain
VZW: 4Q07- $10.84; 4Q08- $13.84 - 28% yoy gain
2. But AT&T also reports its retail postpaid data ARPU at $16.30, which excludes wholesale and prepaid customers; VZW does not report this metric. Since 93% of VZW subscribers are retail postpaid, there is likely at most a .5 variation from the $13.84 figure, or $14.34. (In the two quarters where VZW also reported its retail data ARPU which excluded wholesale but included prepaid customers, the difference between them was .22). For this coveted subset, AT&T has the higher data ARPU.
In addtion, note that in the two quarters following a new iPhone model release, the VZW retail postpaid churn rate moves upward - in 2007, it went from .85 to .96/.94 (11-13% increase) and more troubling for VZW, in 2008, it went from .83 to 1.03/1.05 (24-27% increase). And similarly note that in the two quarters following a new iPhone model release, AT&T has added from 1.17M to 1.693M new postpaid retail subscribers, but otherwise, it averages 800K. Might there be a relationship?
All I'm saying is that AT&T knows what's keeping it in the game, and these emerging iPhone contenders will not significantly affect Apple's business model for the next iPhone.