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40 percent of iPhone owners would leave to Verizon if carrier had the device, says analyst

Written by Andre Yoskowitz (Google+) @ 26 May 2010 11:05 User comments (13)

40 percent of iPhone owners would leave to Verizon if carrier had the device, says analyst Davenport & Company analyst Drake Johnstone has made a bold prediction this week, saying that AT&T would lose up to 40 percent of its iPhone subscribers if the carrier was to lose its exclusivity pact on the iPhone and the smartphone moved to Verizon.
Says Johnstone in a client note: "Over the past several years, AT&T indicated that 40 percent of its new iPhone customers came from other carriers. We estimate that AT&T has 15 million iPhone customers (as of Q-1 10) and believe that AT&T could lose as many as 6 million, or 40 percent, of its iPhone customers when Verizon begins selling the iPhone in 2011."

Because of these expectations, the analyst says: "We are reducing AT&Ts 2011 wireless subscriber additions from 6 million to 2 million (most of these new additions may be lower value connected devices such as eReaders instead of higher value long-term wireless customers), since we believe that Verizon could obtain Apples approval to sell and provide wireless service for the iPhone as early as mid-2011."

While the numbers seem sensationalist, they could be a possibility. AT&T does have some measures in place to prevent such an "exodus," however. The company just raised its ETF (early termination fees) to $350 for smartphones, meaning leaving for another carrier could be a pricey transaction. Additionally, family-talk and business-discounted plans are hard to switch to new carriers with, and AT&T says about 80 percent of its customers have those types of plans.

Finally, there are still plenty of consumers out there that prefer the ease of a SIM card to CDMA activations.

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13 user comments

126.5.2010 13:39

350.00 termination fee? They are all crooks.
I would never buy a smartphone for that reason alone.

We used At+T where i worked and we had to switch to Verizon due to all the dropped calls we were getting with AT+T.

So i definitely believe AT+T will lose customers. Most of their customers joined because they had to, and not by choice.

226.5.2010 14:19

At&T = P.O.S.

Maybe Verizon will get their iPhone earlier

326.5.2010 15:30

Verizon has excellent coverage in the Carolinas, never had a problem in 6 years with them, only reason I haven't picked up an I-phone yet, ATT sucks here, had them back in 2002 when I first moved down here. Dumped them as soon as I could.



426.5.2010 18:58

I guess it depends on your market but I have been with AT&T since it was Ameritech and have had decent luck with them. Verizon is a good carrier but they are far from perfect. My Parents and Sister have them and they are happy for the most part but I have heard more than once their customer service was not up to par and they get nickled and dimed on their bill. Also my Parents bill for 2 cell phones and similar coverage is about $40 more per month. Part of that is due to the fact that I can combine my AT&T Services into one bill and receive a "bundled" discount. I have been to areas where my phone does not work so well and theirs does and areas where their phones do not work so well and mine does.

The few times I have had a problem with my AT&T services with either Cellphone, Land Line, TV or Internet they have been very helpful and responsive. I know I do not speak for everybody but as an iPhone owner for me and my wife and an AT&T Subscriber I would not leave and I think the 40% estimates are way exaggerated. I know some that came to AT&T for the iPhone and have been happy or see no difference in coverage or service.

526.5.2010 19:23

Verizon already has several phones which are far better than the iPhone. Why would anyone care if Verizon has it or not?

627.5.2010 0:50

Originally posted by bobiroc:
...I think the 40% estimates are way exaggerated.

I agree. It was probably higher then that.

You should try to deal with these guys on a daily basis. When a circuit goes down it's automatically CPE (Customer Premises Equipment). They can test a circuit and find no fault of their own then kick it back on the customer, just find out; after hours of lost business and money shelled out a third party cabling outfit to check you wiring. that they had a bad pair some where on their side of the system.

"Thank you for calling AT&T customer support, it's not our fault. How can I help you?"


727.5.2010 1:07

AT&T and the iPhone both socks !
They made for each other !

827.5.2010 14:22

Personally, I think instead of a high ETF, they should have a pro-rated ETF depending on when the contract was cancelled and a discounted ETF if the phone can be returned in good working order within 30 days of cancellation.

927.5.2010 14:28

Originally posted by ThePastor:
Verizon already has several phones which are far better than the iPhone. Why would anyone care if Verizon has it or not?
Up to 70% of Blackberry users and up to 50% of other 'smartphone' users have said they would be interested in switching to the iPhone if it were only available on their carrier, so your opinion isn't highly shared.

1027.5.2010 17:34

i have never used att but iphone has rogers where i live and i have them as pay-as-you-go to try there network out and it is horrible...as soon as i leave a city my cellphone has zero bars i get dropped calls all the time even in the cities my reception sucks its no wonder half there brick and motor stores are closing down once you go rogers you pretty much just throw away money for nothing in return. thank god for a few payphones still out there or i would of probably went on a rampage because of rogers.

1128.5.2010 9:55

I used AT&T for a few years because I got unlimited calls and text for $60 a month on a prepay plan. If I didn't need or couldn't afford my phone that month I just didn't put any money on it. I recently switched to Verizon and got a Droid. My brother has an iphone so we have done a lot of comparing. The Droid is hands down the better device. My opinion is definitely biased, I wouldn't own an apple product if they payed me to use it, but his is not. Now he's wishing he wasn't stuck with his junk iphone for another year. I think they should keep iphone exclusive to AT&T. That way we can keep all the idiots from eating up our data on Verizon. Besides, iphones are just smartphones for people not smart enough to know any better.

122.6.2010 7:54

Omg $350?
I would still move to verizon. I'm sick of the "service" that I get from AT&T

132.6.2010 10:25

I just completed a switch from Verizon to ATT. A total of 7 phones, 3 of them smart phones. I am in Central Cali and the service over the past 2 months since the switched with ATT is far better then the service with Verizon, Our mobile internet is faster and I can still get my email in the foothills where I could not with Verizon. It also dropped our bill nearly 300.00 per month. Media has way over exagerated the MAP Deal. We were very nervous about the switch, But very hapy now!!

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