AT&T's 3G network ain't bad when compared with the rest of the world --- the world's largest regular priced iphone data allowance per month, and the world's third fastest 3G iphone speed.
The rest of the world got suckered into PR advertising about how their networks are 7.2 mbps or 14.4 mbps --- but their real life iphone 3G speed is slower than AT&T's.
eh? There are plenty of unlimited plans in europe. Speed I am not totally sure on but coverage is certainly very reliable in UK, France, Germany and Belgium from my roaming around. All of which is very near 100% by population.
Not being there, I have no interest in American phone company profits but am constantly amazed at what shitty mobile service you folks put up with. Never had a "dropped call" problem anywhere in Australia or now in Fiji (which isn't even a first-world country). And paying for people to text you is simply beyond ludicrous. You lot need to complain LOUDER!
I must be in the minority -- I have had no issues with AT&T since getting a 3GS on launch day. I'm in the Raleigh, NC area and have great 3G coverage, excellent voice quality, and no dropped calls.
If it was such a bad deal, AT&T wouldn't have extended the contract last year & tried to do it again this year. Verizon also seems pretty interested in getting the iphone. Seems like the carriers don't mind the arrangement at all.
Exactly. One might also consider the fact that AT&T had horrid retention problems, so you might be inclined to say that all 9 million are "new or saved". Run the numbers on that basis and the iPhone is the greatest product ever. Which is what everyone, inside the industry and out, seems to think it is.
I always get amused when I read an article by a liberal arts dropout who complains that a collection of fairly smart people is being really dumb for some reason or another. This one is amusing, but for a real laugh-out-loud, listen to any of the people complaining that farmers are being "tricked" into growing GM crops. I lived in the country... you don't fool farmers.
I find it to be a joke, and incredibly insulting, that an article that asserts AT&T suffers by carrying the iPhone even is allowed to be printed on this site, or others like it.
More and more reports will come out every couple of weeks from now on --- saying the same thing --- for the rest of the world's carriers' carrying the iphone.
No iphone carrier is making much money on the iphone --- and that's honest and accurate.
No, that is speculative and very subjective.
AT&T is making more than if they did not have the iPhone. The have more subs than if they did not have the iPhone. They have signed customers to more expensive plans than if they did not have the iPhone. The have signed more customers to data than if they did not have the iPhone. Same with the other carriers.
Every 'negative' discussed in that analysts reports simply takes what should be a positive for AT&T and tries to make it a negative, seemingly with the goal of making Apple look bad. AT&T signs 4 million new subs...great news but the report makes this sound small. Had Apple gone with another carrier, AT&T would not have gained these customer and would have lost millions of their existing customers to another carrier, but this is a bad thing? AT&T's network is unable to handle the massive flood of these new customers (didn't he just imply this was an insignificant number?) and existing customers and instead of this being AT&T fault, it is Apple's fault (how? Because the build a device people would actually use?).
The 'report' was little more than a smear job to make AT&T look good and Apple look bad.
Let's not forget, of that 40% new iPhone users, how many were Family Plans bringing more than one phone to the table. Personally, I went for the iPhone and AT&T got 3 additional non-iPhone accounts out of my switch, so the number of overall new subscribers is higher than the iPhone only portion.
Exactly. They got 2 additional accounts when I switched
AT&T is making more than if they did not have the iPhone. The have more subs than if they did not have the iPhone. They have signed customers to more expensive plans than if they did not have the iPhone. The have signed more customers to data than if they did not have the iPhone. Same with the other carriers.
Every 'negative' discussed in that analysts reports simply takes what should be a positive for AT&T and tries to make it a negative, seemingly with the goal of making Apple look bad. AT&T signs 4 million new subs...great news but the report makes this sound small. Had Apple gone with another carrier, AT&T would not have gained these customer and would have lost millions of their existing customers to another carrier, but this is a bad thing? AT&T's network is unable to handle the massive flood of these new customers (didn't he just imply this was an insignificant number?) and existing customers and instead of this being AT&T fault, it is Apple's fault (how? Because the build a device people would actually use?).
The 'report' was little more than a smear job to make AT&T look good and Apple look bad.
AT&T would have gained those subscribers the slow and steady way --- spending those big iphone subsidy dollars on network improvements.
How does this a smear job: Apple got the deal that they wanted (and got the big money). Verizon rejected the deal that they don't want (and still makes the big money). AT&T got the deal that Verizon rejected (and 2 years later, Wall Street is still questioning the wisdom of the deal).
AT&T would have gained those subscribers the slow and steady way --- spending those big iphone subsidy dollars on network improvements.
Do you actually believe that? I don't.
After all, their network was perfectly adequate for their pre-iPhone needs. It was only when people actually started using their system that a real problem appeared.
AT&T already had the iPhone money in their pocket, and their network sucked in spite of it. I can't see any reason for your claim that they would have invested in this, given that they didn't.
And in spite of a working network prior to the iPhone, people were abandoning AT&T in droves. What makes you think this process would have magically ended had they invested in network instead of handset? I can't think of any good reason, given their history.
After all, their network was perfectly adequate for their pre-iPhone needs. It was only when people actually started using their system that a real problem appeared.
I never really said that the AT&T network is bad --- just look at the wired.com survey, their 3G network came out to be the third fastest in the world for the iphone. Their network isn't even bad even with the iphone.
But we don't live in a vacuum --- as long as Verizon has a little bit better network than AT&T, Verizon will continue to make a lot of money because they can charge a premium rate.
AT&T would have gained those subscribers the slow and steady way --- spending those big iphone subsidy dollars on network improvements.
Again, very speculative. We cannot know what would have happened if the iPhone never existed. AT&T might have slowly gained customers, but that would mean they also would have slowly gained the additional revenue. AT&T might have stayed with the same number or AT&T might have lost customers. We can't know.
What we can fairly well assume, is that if Verizon had accepted the deal for the iPhone, AT&T would have lost customers in droves. The iPhone is a proven device for bringing in new customers and keeping existing customers. And we can know that any customers that did stay with AT&T or moved to AT&T would have been far lower ARPS than the high value iPhone customers.
Quote:
Originally Posted by samab
How does this a smear job: Apple got the deal that they wanted (and got the big money). Verizon rejected the deal that they don't want (and still makes the big money). AT&T got the deal that Verizon rejected (and 2 years later, Wall Street is still questioning the wisdom of the deal).
It should be blatantly obvious. Any report that can make signing and keeping millions of high revenue subscribers sound like a negative has an obvious bias. A report that places the blames for the shitty network on the device for being too popular and useful shows an obvious bias. A report that dismisses 4 million new subs as 'only' 4 million yet at the same time blames the usage from those users for the crap network performance is obviously biased. The report take positives and makes them sound like negatives. It takes real negatives and pseudo-negatives and puts the blame on Apple and the iPhone instead of on AT&T.
How is it a smear job? How is it not? AT&T is to blame for the poor network performance. The iPhone simply exposed it. A vast number of those 4 million new and 5-6million existing customers would have gone to Verizon if they had the iPhone.
Yes, Apple got the deal the wanted and AT&T benefited in terms of new subs and retentions immensely. Did the subsidy cost AT&T too much? An argument could be made that it did, but not as much as if Verizon had been giving the subsidy. That would have cost AT&T a lot more. The subsidy they do provide is higher than their average but that is a very leading statement without context. The ARPS for their iPhone customers is also much higher than their average, but that isn't relevant?
Again, very speculative. We cannot know what would have happened if the iPhone never existed. AT&T might have slowly gained customers, but that would mean they also would have slowly gained the additional revenue. AT&T might have stayed with the same number or AT&T might have lost customers. We can't know.
What we can fairly well assume, is that if Verizon had accepted the deal for the iPhone, AT&T would have lost customers in droves. The iPhone is a proven device for bringing in new customers and keeping existing customers. And we can know that any customers that did stay with AT&T or moved to AT&T would have been far lower ARPS than the high value iPhone customers.
It should be blatantly obvious. Any report that can make signing and keeping millions of high revenue subscribers sound like a negative has an obvious bias. A report that places the blames for the shitty network on the device for being too popular and useful shows an obvious bias. A report that dismisses 4 million new subs as 'only' 4 million yet at the same time blames the usage from those users for the crap network performance is obviously biased. The report take positives and makes them sound like negatives. It takes real negatives and pseudo-negatives and puts the blame on Apple and the iPhone instead of on AT&T.
How is it a smear job? How is it not? AT&T is to blame for the poor network performance. The iPhone simply exposed it. A vast number of those 4 million new and 5-6million existing customers would have gone to Verizon if they had the iPhone.
Yes, Apple got the deal the wanted and AT&T benefited in terms of new subs and retentions immensely. Did the subsidy cost AT&T too much? An argument could be made that it did, but not as much as if Verizon had been giving the subsidy. That would have cost AT&T a lot more. The subsidy they do provide is higher than their average but that is a very leading statement without context. The ARPS for their iPhone customers is also much higher than their average, but that isn't relevant?
That's the whole point --- AT&T is buying customers (and market share) at costs that are questionable. AT&T didn't need to buy customers to make money and they certainly didn't need to buy market share --- they were the biggest carrier in the US when the first gen iphone was launched.
But we already know that Verizon rejected the iphone. So if AT&T rejected as well --- then the iphone would have gone to either Sprint or T-Mobile, and they ain't going to steal massive number of subscribers away from AT&T.
From Q3 2007 to Q2 2009, AT&T got 4.456 million net new subscribers from MVNO's (Tracfone) --- that is larger than the number of new subscribers from iphone --- where the ARPU for Tracfone subscribers is something like $15 a month. Nobody told AT&T to buy the two extremes. Verizon targets the middle and that's why Verizon has a total ARPU that is higher than AT&T.
That's the whole point --- AT&T is buying customers (and market share) at costs that are questionable. AT&T didn't need to buy customers to make money and they certainly didn't need to buy market share --- they were the biggest carrier in the US when the first gen iphone was launched.
And yet when the 1st gen iPhone launched, there was no customer subsidy. They were paying Apple in a revenue sharing deal, but from all appearances AT&T felt direct customer subsidies were better for them in the long term and hence the new deal.
Quote:
Originally Posted by samab
But we already know that Verizon rejected the iphone. So if AT&T rejected as well --- then the iphone would have gone to either Sprint or T-Mobile, and they ain't going to steal massive number of subscribers away from AT&T.
Sprint and T-Mobile sure would have tried. And the iPhone has a proven track record for attracting attention and subscriber transfers. The deal Verizon turned down was likely similar to the original AT&T deal. We don't know if they would have accepted a more traditional agreement, but we certainly cannot rule it out. Had they been offered and accepted the deal that AT&T has since the 3G, they would have taken millions of AT&T's existing customers.
Quote:
Originally Posted by samab
From Q3 2007 to Q2 2009, AT&T got 4.456 million net new subscribers from MVNO's (Tracfone) --- that is larger than the number of new subscribers from iphone --- where the ARPU for Tracfone subscribers is something like $15 a month. Nobody told AT&T to buy the two extremes. Verizon targets the middle and that's why Verizon has a total ARPU that is higher than AT&T.
Again, assuming the iPhone never existed, then yes, AT&T would likely have gained those same low value customers. But, assuming the iPhone did exist at any other carrier, they would have lost existing customers and forfeited all of the potential switchers, with much higher value.
In the end, all we can do is speculate. The problem with the article is that it is unable to find or describe any concrete fault with the agreement and instead take problems with AT&T, such as its poor network and blames them on Apple and the iPhone. It casually brushes aside that AT&T kept or gained 10 million customers, many of which converted from low revenue to high revenue customers, to claim the cost too much. Had AT&T not had the iPhone, we know the 4 million new would be lost and can assume a large number of the retained customers would be lost. We can also assume existing customers that stayed would likely have remained low revenue customers. Did it cost too much? Maybe. Did they stand to lose much more? Seems more likely.
And yet when the 1st gen iPhone launched, there was no customer subsidy. They were paying Apple in a revenue sharing deal, but from all appearances AT&T felt direct customer subsidies were better for them in the long term and hence the new deal.
Two wrongs don't make a right. There is a possibility that AT&T shouldn't have accepted both deals.
Quote:
Originally Posted by Tulkas
Again, assuming the iPhone never existed, then yes, AT&T would likely have gained those same low value customers. But, assuming the iPhone did exist at any other carrier, they would have lost existing customers and forfeited all of the potential switchers, with much higher value.
Did it cost too much? Maybe. Did they stand to lose much more? Seems more likely.
AT&T gained those cheap subscribers because they wanted to expand into the MVNO arena. Nobody put a gun to AT&T's head and signed up Tracfone.
AT&T was the largest carrier when they signed the iphone deal. There had always been rumors that T-Mobile's German parent might leave the US market. Sprint Nextel was a basketcase. AT&T was in no danger if they didn't sign the iphone deal.
It will be interesting to see what all the "grass is always greener" Verizon switchers have to say at some possible future date.
Especially when they realize that CDMA doesn't support voice and data simultaneously and that AT&T was shown to have faster Internet speeds.
It doesn't affect me in Australia as we dumped CDMA years ago.
The difference here is that
a) 95% of your population lives on the coasts in a few population centers. The Vodafone map doesn't show too much travel more than 100-200 miles inland.
b) Your GSM providers actually put money into infrastructure. AT&Ts network is sporadic once you get off the 4-lane expressways and freeways and its still mostly 2G.
Comments
AT&T's 3G network ain't bad when compared with the rest of the world --- the world's largest regular priced iphone data allowance per month, and the world's third fastest 3G iphone speed.
The rest of the world got suckered into PR advertising about how their networks are 7.2 mbps or 14.4 mbps --- but their real life iphone 3G speed is slower than AT&T's.
eh? There are plenty of unlimited plans in europe. Speed I am not totally sure on but coverage is certainly very reliable in UK, France, Germany and Belgium from my roaming around. All of which is very near 100% by population.
Wired.com survey a few months ago showed that the CDMA carriers were faster in AT&T's HSDPA network.
That's not really a relevant comparison - when Verizon has a high demand device like the iPhone then things will be much more interesting.
The ROW (rest of the world) got suckered into "paper spec" speed ratings.
And there's the irony statement for the thread....
If it was such a bad deal, AT&T wouldn't have extended the contract last year & tried to do it again this year. Verizon also seems pretty interested in getting the iphone. Seems like the carriers don't mind the arrangement at all.
Exactly. One might also consider the fact that AT&T had horrid retention problems, so you might be inclined to say that all 9 million are "new or saved". Run the numbers on that basis and the iPhone is the greatest product ever. Which is what everyone, inside the industry and out, seems to think it is.
I always get amused when I read an article by a liberal arts dropout who complains that a collection of fairly smart people is being really dumb for some reason or another. This one is amusing, but for a real laugh-out-loud, listen to any of the people complaining that farmers are being "tricked" into growing GM crops. I lived in the country... you don't fool farmers.
Maury
What kind of co-intel-pro wrote that nonsense?
It just means that the exodus will be even more massive the minute Verizon gets to sell the iphone.
In 2013? I'm sure AT&T is quaking in their boots.
Let's not forget that Verizon is the golden boy today, let's see what everyone things in four years.
Maury
More and more reports will come out every couple of weeks from now on --- saying the same thing --- for the rest of the world's carriers' carrying the iphone.
No iphone carrier is making much money on the iphone --- and that's honest and accurate.
No, that is speculative and very subjective.
AT&T is making more than if they did not have the iPhone. The have more subs than if they did not have the iPhone. They have signed customers to more expensive plans than if they did not have the iPhone. The have signed more customers to data than if they did not have the iPhone. Same with the other carriers.
Every 'negative' discussed in that analysts reports simply takes what should be a positive for AT&T and tries to make it a negative, seemingly with the goal of making Apple look bad. AT&T signs 4 million new subs...great news but the report makes this sound small. Had Apple gone with another carrier, AT&T would not have gained these customer and would have lost millions of their existing customers to another carrier, but this is a bad thing? AT&T's network is unable to handle the massive flood of these new customers (didn't he just imply this was an insignificant number?) and existing customers and instead of this being AT&T fault, it is Apple's fault (how? Because the build a device people would actually use?).
The 'report' was little more than a smear job to make AT&T look good and Apple look bad.
The reason there are so few new subscriptions is because of their network and has nothing to do with the iPhone.
Let's not forget, of that 40% new iPhone users, how many were Family Plans bringing more than one phone to the table. Personally, I went for the iPhone and AT&T got 3 additional non-iPhone accounts out of my switch, so the number of overall new subscribers is higher than the iPhone only portion.
Exactly. They got 2 additional accounts when I switched
No, that is speculative and very subjective.
AT&T is making more than if they did not have the iPhone. The have more subs than if they did not have the iPhone. They have signed customers to more expensive plans than if they did not have the iPhone. The have signed more customers to data than if they did not have the iPhone. Same with the other carriers.
Every 'negative' discussed in that analysts reports simply takes what should be a positive for AT&T and tries to make it a negative, seemingly with the goal of making Apple look bad. AT&T signs 4 million new subs...great news but the report makes this sound small. Had Apple gone with another carrier, AT&T would not have gained these customer and would have lost millions of their existing customers to another carrier, but this is a bad thing? AT&T's network is unable to handle the massive flood of these new customers (didn't he just imply this was an insignificant number?) and existing customers and instead of this being AT&T fault, it is Apple's fault (how? Because the build a device people would actually use?).
The 'report' was little more than a smear job to make AT&T look good and Apple look bad.
AT&T would have gained those subscribers the slow and steady way --- spending those big iphone subsidy dollars on network improvements.
How does this a smear job: Apple got the deal that they wanted (and got the big money). Verizon rejected the deal that they don't want (and still makes the big money). AT&T got the deal that Verizon rejected (and 2 years later, Wall Street is still questioning the wisdom of the deal).
AT&T would have gained those subscribers the slow and steady way --- spending those big iphone subsidy dollars on network improvements.
Do you actually believe that? I don't.
After all, their network was perfectly adequate for their pre-iPhone needs. It was only when people actually started using their system that a real problem appeared.
AT&T already had the iPhone money in their pocket, and their network sucked in spite of it. I can't see any reason for your claim that they would have invested in this, given that they didn't.
And in spite of a working network prior to the iPhone, people were abandoning AT&T in droves. What makes you think this process would have magically ended had they invested in network instead of handset? I can't think of any good reason, given their history.
Maury
Do you actually believe that? I don't.
After all, their network was perfectly adequate for their pre-iPhone needs. It was only when people actually started using their system that a real problem appeared.
I never really said that the AT&T network is bad --- just look at the wired.com survey, their 3G network came out to be the third fastest in the world for the iphone. Their network isn't even bad even with the iphone.
But we don't live in a vacuum --- as long as Verizon has a little bit better network than AT&T, Verizon will continue to make a lot of money because they can charge a premium rate.
AT&T would have gained those subscribers the slow and steady way --- spending those big iphone subsidy dollars on network improvements.
Again, very speculative. We cannot know what would have happened if the iPhone never existed. AT&T might have slowly gained customers, but that would mean they also would have slowly gained the additional revenue. AT&T might have stayed with the same number or AT&T might have lost customers. We can't know.
What we can fairly well assume, is that if Verizon had accepted the deal for the iPhone, AT&T would have lost customers in droves. The iPhone is a proven device for bringing in new customers and keeping existing customers. And we can know that any customers that did stay with AT&T or moved to AT&T would have been far lower ARPS than the high value iPhone customers.
How does this a smear job: Apple got the deal that they wanted (and got the big money). Verizon rejected the deal that they don't want (and still makes the big money). AT&T got the deal that Verizon rejected (and 2 years later, Wall Street is still questioning the wisdom of the deal).
It should be blatantly obvious. Any report that can make signing and keeping millions of high revenue subscribers sound like a negative has an obvious bias. A report that places the blames for the shitty network on the device for being too popular and useful shows an obvious bias. A report that dismisses 4 million new subs as 'only' 4 million yet at the same time blames the usage from those users for the crap network performance is obviously biased. The report take positives and makes them sound like negatives. It takes real negatives and pseudo-negatives and puts the blame on Apple and the iPhone instead of on AT&T.
How is it a smear job? How is it not? AT&T is to blame for the poor network performance. The iPhone simply exposed it. A vast number of those 4 million new and 5-6million existing customers would have gone to Verizon if they had the iPhone.
Yes, Apple got the deal the wanted and AT&T benefited in terms of new subs and retentions immensely. Did the subsidy cost AT&T too much? An argument could be made that it did, but not as much as if Verizon had been giving the subsidy. That would have cost AT&T a lot more. The subsidy they do provide is higher than their average but that is a very leading statement without context. The ARPS for their iPhone customers is also much higher than their average, but that isn't relevant?
Again, very speculative. We cannot know what would have happened if the iPhone never existed. AT&T might have slowly gained customers, but that would mean they also would have slowly gained the additional revenue. AT&T might have stayed with the same number or AT&T might have lost customers. We can't know.
What we can fairly well assume, is that if Verizon had accepted the deal for the iPhone, AT&T would have lost customers in droves. The iPhone is a proven device for bringing in new customers and keeping existing customers. And we can know that any customers that did stay with AT&T or moved to AT&T would have been far lower ARPS than the high value iPhone customers.
It should be blatantly obvious. Any report that can make signing and keeping millions of high revenue subscribers sound like a negative has an obvious bias. A report that places the blames for the shitty network on the device for being too popular and useful shows an obvious bias. A report that dismisses 4 million new subs as 'only' 4 million yet at the same time blames the usage from those users for the crap network performance is obviously biased. The report take positives and makes them sound like negatives. It takes real negatives and pseudo-negatives and puts the blame on Apple and the iPhone instead of on AT&T.
How is it a smear job? How is it not? AT&T is to blame for the poor network performance. The iPhone simply exposed it. A vast number of those 4 million new and 5-6million existing customers would have gone to Verizon if they had the iPhone.
Yes, Apple got the deal the wanted and AT&T benefited in terms of new subs and retentions immensely. Did the subsidy cost AT&T too much? An argument could be made that it did, but not as much as if Verizon had been giving the subsidy. That would have cost AT&T a lot more. The subsidy they do provide is higher than their average but that is a very leading statement without context. The ARPS for their iPhone customers is also much higher than their average, but that isn't relevant?
That's the whole point --- AT&T is buying customers (and market share) at costs that are questionable. AT&T didn't need to buy customers to make money and they certainly didn't need to buy market share --- they were the biggest carrier in the US when the first gen iphone was launched.
But we already know that Verizon rejected the iphone. So if AT&T rejected as well --- then the iphone would have gone to either Sprint or T-Mobile, and they ain't going to steal massive number of subscribers away from AT&T.
From Q3 2007 to Q2 2009, AT&T got 4.456 million net new subscribers from MVNO's (Tracfone) --- that is larger than the number of new subscribers from iphone --- where the ARPU for Tracfone subscribers is something like $15 a month. Nobody told AT&T to buy the two extremes. Verizon targets the middle and that's why Verizon has a total ARPU that is higher than AT&T.
That's the whole point --- AT&T is buying customers (and market share) at costs that are questionable. AT&T didn't need to buy customers to make money and they certainly didn't need to buy market share --- they were the biggest carrier in the US when the first gen iphone was launched.
And yet when the 1st gen iPhone launched, there was no customer subsidy. They were paying Apple in a revenue sharing deal, but from all appearances AT&T felt direct customer subsidies were better for them in the long term and hence the new deal.
But we already know that Verizon rejected the iphone. So if AT&T rejected as well --- then the iphone would have gone to either Sprint or T-Mobile, and they ain't going to steal massive number of subscribers away from AT&T.
Sprint and T-Mobile sure would have tried. And the iPhone has a proven track record for attracting attention and subscriber transfers. The deal Verizon turned down was likely similar to the original AT&T deal. We don't know if they would have accepted a more traditional agreement, but we certainly cannot rule it out. Had they been offered and accepted the deal that AT&T has since the 3G, they would have taken millions of AT&T's existing customers.
From Q3 2007 to Q2 2009, AT&T got 4.456 million net new subscribers from MVNO's (Tracfone) --- that is larger than the number of new subscribers from iphone --- where the ARPU for Tracfone subscribers is something like $15 a month. Nobody told AT&T to buy the two extremes. Verizon targets the middle and that's why Verizon has a total ARPU that is higher than AT&T.
Again, assuming the iPhone never existed, then yes, AT&T would likely have gained those same low value customers. But, assuming the iPhone did exist at any other carrier, they would have lost existing customers and forfeited all of the potential switchers, with much higher value.
In the end, all we can do is speculate. The problem with the article is that it is unable to find or describe any concrete fault with the agreement and instead take problems with AT&T, such as its poor network and blames them on Apple and the iPhone. It casually brushes aside that AT&T kept or gained 10 million customers, many of which converted from low revenue to high revenue customers, to claim the cost too much. Had AT&T not had the iPhone, we know the 4 million new would be lost and can assume a large number of the retained customers would be lost. We can also assume existing customers that stayed would likely have remained low revenue customers. Did it cost too much? Maybe. Did they stand to lose much more? Seems more likely.
And yet when the 1st gen iPhone launched, there was no customer subsidy. They were paying Apple in a revenue sharing deal, but from all appearances AT&T felt direct customer subsidies were better for them in the long term and hence the new deal.
Two wrongs don't make a right. There is a possibility that AT&T shouldn't have accepted both deals.
Again, assuming the iPhone never existed, then yes, AT&T would likely have gained those same low value customers. But, assuming the iPhone did exist at any other carrier, they would have lost existing customers and forfeited all of the potential switchers, with much higher value.
Did it cost too much? Maybe. Did they stand to lose much more? Seems more likely.
AT&T gained those cheap subscribers because they wanted to expand into the MVNO arena. Nobody put a gun to AT&T's head and signed up Tracfone.
AT&T was the largest carrier when they signed the iphone deal. There had always been rumors that T-Mobile's German parent might leave the US market. Sprint Nextel was a basketcase. AT&T was in no danger if they didn't sign the iphone deal.
It will be interesting to see what all the "grass is always greener" Verizon switchers have to say at some possible future date.
Especially when they realize that CDMA doesn't support voice and data simultaneously and that AT&T was shown to have faster Internet speeds.
It doesn't affect me in Australia as we dumped CDMA years ago.
The difference here is that
a) 95% of your population lives on the coasts in a few population centers. The Vodafone map doesn't show too much travel more than 100-200 miles inland.
b) Your GSM providers actually put money into infrastructure. AT&Ts network is sporadic once you get off the 4-lane expressways and freeways and its still mostly 2G.