Analysts: AT&T’s issues would have happened on any network that carried Apple’s iPhone

Year-End Clearance & Tax Saving Sale “Consumer outrage about AT&T’s 3G service for iPhones is boiling over, but the dropped calls and spotty service reflect a greater lack of foresight in the wireless industry,” David Goldman reports for CNNMoney.com.

“Analysts say AT&T’s problems would have happened on any network that carried Apple’s iPhone because of the enormous amount of data downloaded by iPhone users. Over the past three years, AT&T’s data traffic increased 5,000% because of the iPhone,” Goldman reports. “‘The challenges that AT&T has are being faced by a lot of operators around the world: Very rapidly growing usage coupled with dense populations,’ said Daniel Hays, wireless expert and partner at consultancy PRTM. ‘Would it have been different on Verizon? Probably not.'”

Goldman reports, “AT&T accurately states that it has the nation’s fastest 3G network but it “probably bit off more than it could chew,” said Doug Helmreich, program director at consultancy CFI Group. ‘Now some of their customers are paying the price.’ iPhone users in New York and San Francisco in particular have been up in arms about frequent service interruptions.”

“Verizon has had a field day at AT&T’s expense,” Goldman reports. “‘There’s a map for that’ commercials have poked fun at AT&T’s smaller 3G footprint. And that has helped Verizon take market share, according to Piper Jaffray. But studies show that AT&T’s network is actually faster than Verizon’s, and Verizon’s ad campaign may be a bit misleading.”

Read more in the full article here.

31 Comments

  1. In order for AT&T;, and every other wireless company since, to get the iPhone, they all had to agree to lower data rates and improve their networks.

    And that was mainly before the introduction of the 3G.

    Nobody, including Apple, predicted the uptake. AT&T;basically gave away the store when then offered unlimited data. After a year, they published a report that the average iPhone user in the US used less than 100 MBs a month, the rest of the world offered limited data.

    Then the 3G was introduced and wow. An explosion, which nobody expected, that even AT&T;, which was spending billions of dollars upgrading their network to handle the regular iPhone never expected, and which every expert and blogger in the world denied that would ever happen.

    Now we are seeing other countries as the iPhone really starts to take off, an issue with service.

    Anybody that says that AT&T;should have know better is an idiot. And are about as dumb as any parent that expects their child to take out the garbage every week without asking.

  2. I agree with the premise of the article. It could happen to any and all carriers, and will.

    I could be wrong but, shouldn’t carriers be adopting massive Wi-Fi hotspot upgrades to do all the heavy lifting on their networks, leaving the wireless spectrum for voice and text only? If they don’t, the computers guys will once again, just walk in and turn it on its ear.

    Does Verizon offer VoIP? They should. In fact, all the carriers should be moving in that direction. I would imagine VoIP over FIOS would be crystal clear.

    Apple will supposedly introduce Light Peak products in their Macs in Q4 of 2010, which is super for the home network, but when I look at the bigger picture, I see another revolution gathering force that will leave the carriers sitting on the sidelines in the same manner Apple’s iPhone has left the phone manufacturers dumbfounded. Apple will do an end-run on the carriers by doing a Jetson’s on their ass.

    When VoIP (video and voice) proves to be “good enough” for everyman, it will marginalize the phone carriers. Any device with a speaker and microphone will serve as a phone.

    Sooner or later, the phone carriers, if they are to survive, will start buying up data centers like Akamai and Limelight Networks to compete with Apple and the other “computer guys” who are redefining the concept of the phone call.

  3. @R2
    The “we pay too much” and the “they don’t pay enough” factions are both right. If ATT charged the minority data hogs a premium, then they should, in theory, be able to simultaneously create a lower price tier for data sippers. As with most things, one size does not fit all.

  4. None of the carriers have sufficient network capability to handle the new consumer demands for data. It’s much like a city not building good roads until the houses have been built for several years – they never build in foresight, just catch up in hindsight.

  5. Phone networks are already noting that Android users are very similar to iPhone users with regards to data usage. More smartphones, regardless of the network, is going to mean issues in the near term…

  6. @R2
    The iPhone is doomed unless it becomes available on all four major networks in America.

    I disagree. For starters, Apple doesn’t have to build a better product in the iPhone and they’ll continue to sell a boatload in spite of AT&T’s problems. The onus is on AT&T and others to build a better network.

    I’m not buying that crap story line about how a flawed iPhone is the major cause of AT&T’s network problems. AT&T’s weakness is not their Tier-1 backbone, of which there are only ten in the world, it’s their wireless “front end” that is lacking.

    AT&T, the behemouth, has over a hundred years of R&D;experience and investment in their infrastructure and data networks.

    De La Vega promised Tethering in ’09 and he only has a few days left to honor his promise. Not gonna’ happen until they experience a paradigm shift in what a phone call truly means.

    Apple, on the other hand, could utilize its new data center for VoIP, allowing me to make all my phone calls from home (like AT&T used to do) over my home Wi-Fi network. That would be one way to get some iPhone traffic off 3G and Edge.

    Apple could also invest in Wi-Fi hotspots, starting with their Apple stores as hubs, giving Mobile Me customers access to the internet for the price of my annual subscription. From there they could adopt a outward emanating repeater strategy using the new Light Peak repeaters to extend the bandwidth from their Apple stores into the communities surrounding their stores.

    If I had money I would open Mobile Me internet cafes right next to Apple properties giving Apple customers unfettered access to the internet.

    So, don’t worry about Apple having to be on all carriers in order for iPhone to succeed.

    Rule number one: If Apple can provide a service, that’s one less partner it needs to succeed.

    Say goodbye to Akamai.

  7. @ G4Dualie

    Nice premises. However, WiFi is not free. And the same carriers that service wireless, are the same carriers that supply WiFi.

    I had my network partially opened for WiFi until the kid across the street was chewing up data downloading pirated movies. Didn’t find out until I got a notice from my ISP warning me of illegal downloading and my wife showed me a surcharge for exceeding our allotted data plan.

  8. @ Bizlaw
    “It’s much like a city not building good roads until the houses have been built for several years – they never build in foresight, just catch up in hindsight.”

    I gather you don’t own a home and pay taxes.

  9. It isn’t just me G4Dually. Several people before me seem to have the same issue. Typing AT&T;results in the added semicolon. Not that I really care, I just found it odd.

  10. @Tired of Retards… grow up already. Calling people names must really make you feel like a big man. Some of us have lives and don’t hit the reload button on MDN all day like you apparently do.

  11. @MDmac
    Nice premises. However, WiFi is not free. And the same carriers that service wireless, are the same carriers that supply WiFi.

    As usual, people are quick to dismiss something because they can’t get around their own contrived stumbling blocks.

    I never suggested “free” Wi-Fi was the solution. I am saying Wi-Fi at any price is a keystone to future internet access, just as Cat-5 cable continues to serve the hardwired community. But I live in a Wi-Fi driven home using Time Capsule and Cox.

    I don’t need their phone service because I use VoIP, and Sprint when I leave the house.

    Wi-Fi proponents can blanket entire communities, the same way they do Universities, with linked Fibre repeaters and strategically placed wireless routers. L/Ps will keep out the leeches.

    As I said, Apple could begin offering internet access tomorrow by allowing any Mobile Me customer who walks through their doors, to take advantage of their in-house Wi-Fi setup. Well what if that Wi-Fi setup existed just a couple of klicks from my home?

    Furthermore, Apple could install repeaters emanating from each Apple store here in the Phoenix Metro area and blanket the entire city for what? 100 million dollars, if not less?

    IIRC, the wireless repeaters in use by the carriers like AT&T and Verizon, to blanket an area have a reach of 7 Km, weigh five-pounds, and cost a pretty penny to deploy. Apple and Intel have developed the same technology using Light Peak to accomplish the same task for much less using a device that is about the size of a box of matches. Plant one every 7 Km emanating outward from the Apple store and begin offering Wi-Fi for the price of admission to Mobile Me. I leave it to Apple’s judgement on data plans.

    So, no matter where I went in the Phoenix area, I would have internet access. No iPhone necessary. Just my TabletMac sending email, voice, data to the “Apple Store Node” for further distribution on the back of their Tier 2 network in North Carolina.

  12. For ‘Darkness’ and anyone else having the unexplained semi-colon appearing after typing AT&T, this is caused by using the ampersand. Here is an explanation:

    http://en.wikipedia.org/wiki/Ampersand

    “In SGML, XML, and HTML, the ampersand is used to introduce an SGML entity. The HTML and XML encoding for the ampersand character is the entity ‘&'[11] (pronounced “amper-amp”). This creates what is known as the ampersand problem. For instance, when putting URLs or other material containing ampersands into XML format files such as RSS files the amp; has to be added to the & or they are considered not well formed and computers will be unable to read the files correctly.”

    Simply follow the ampersand with “amp;T” and it will all be good.

  13. @ G4Dualie,

    Yes thanks, I guess I wasn’t really clear on that point. If I recall correctly, I believe it was ‘Ampar’ who explained that here at MDN a long time ago. I remember it had me flustered also.

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