AT&T Business Execution Failure

AT&T’s CEO has taken to blaming customers for consuming too much cellular bandwidth and, in effect, hogging capacity.  AT&T’s CEO has nailed it!  It is the customer’s fault.  Thanks for clearing that up.

So, while it’s the “customer’s fault,” is it salient that AT&T’s network has historically been behind actual demand? Why should we be surprised now?

My memory is that cell phone voice mail was created because networks could not support demand…there was no contractual commitment that calls needed to get through on the first dial.  So, as much as we’d like to think cellular voicemail was for our convenience, network capacity drove this feature.

The iPhone has certainly exacerbated the network problem for AT&T.  That and Verizon’s new advertising campaign in the US illustrating the lack of robustness of their network.

AT&T is talking about rate changes for heavy users of the iPhone.  I liken it to drug usage–inexpensive to get started but expensive to keep up now that you are hooked.

But, will paying more get you a better network?  Not in the near term.

AT&T is hoping you will use your iPhone less because of the cost premiums customers want to avoid which will increase their network bandwidth because they have a constrained supply.  It might help, but, it’s not an answer.  And, they’ll be degrading service at the same price, not a good strategy for creating a wonderful customer experience.

AT&T entered into an agreement with Apple that meant AT&T would realize no profit from the iPhone for 17 months after launch.  If Verizon offers the iPhone with a better service plan, AT&T customers will move in droves overnight.

As a devout Verizon customer, will that be a good thing for me?  Too early to tell.

What do you think?

Dave Gardner, Gardner & Associates Consulting http://www.gardnerandassoc.com

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