If Apple brought its iPhone to Verizon, as often rumored, AT&T could face a massive defection of customers, according to Davenport & Company analyst Drake Johnstone.
The analyst said AT&T could lose as many as 40% of its iPhone subscribers to Big Red for various reasons. The main impetus to switch would likely be network quality and consistency, as AT&T’s service is still widely considered a nightmare in major metropolitan cities. While there are signs that it is steadily improving, anecdotal evidence suggests the frustration with AT&T’s network hasn’t subsided.
“We estimate that AT&T has 15 million iPhone customers (as of Q1 10) and believe that AT&T could lose as many as 6 million, or 40%, of its iPhone customers when Verizon begins selling the iPhone in 2011,” Johnstone said in a note to clients. “We are reducing AT&T’s 2011 wireless subscriber additions from 6 million to 2 million (most of these new additions may be lower value connected devices such as e-Readers instead of higher value long- term wireless customers), since we believe that Verizon could obtain Apple’s approval to sell and provide wireless service for the iPhone as early as mid-2011.”
So, Johnstone is circling 2011 for an Apple handset to hit Verizon and I’d have to agree with that time table. By then, Verizon’s 4G network will be in many major cities and Apple could finally have a true 4G phone. The funny part is that no one seems to mention that Big Red’s reliability has come in part because it doesn’t have a large base of Apple users sucking down massive amounts of data. It will be interesting to watch how Verizon’s quality of service progresses once it does get Apple’s smartphone.
As for AT&T, it doesn’t seem too concerned about a mass exodus of customers. First of all, many existing smartphone users are on “sticky” contracts like family plans or ones with corporate discounts. Additionally, the carrier will be raising its early-termination fees next month, which could make it more difficult to switch carriers.
[Via All Things D]