In statements made at a recent JP Morgan investors conference, AT&T CEO Ralph de la Vega said that his company isn't concerned over the possibility of Apple bringing the iPhone to Verizon Wireless. He said that in his experience in the industry, most consumers are loath to switch from one carrier to another because of how difficult it is to do so.
Furthermore, he said that because 70 percent of subscribers are on family plans, he doubts that his company would witness a mass exodus to Verizon Wireless for the same phone they can have on AT&T's network.
To some extent, his comments make sense. After all, if Apple releases the iPhone 4G on Verizon's network, chances are it will also be available on AT&T's network at the same time. And in other countries where the iPhone is available on multiple carriers, they both are seemingly doing well enough to continue selling the device on their networks.
But that doesn't mean there aren't risks involved. AT&T isn't the most beloved company in the world, and it's competing in a market where consumers are naturally suspect of providers. If Apple decides to give those consumers a choice, it could spell trouble for AT&T. And it's time that de la Vega realizes that. Here's why:
1. Verizon is the other big player
AT&T is undoubtedly a major player in the mobile phone market. But Verizon Wireless is the company's biggest and most successful competitor. And the phone they're fighting over is the most coveted device in the space. By offering the iPhone to the millions of Verizon Wireless subscribers, Apple will expand its market dramatically. For AT&T, the upside just isn't there. Now, it will be forced to compete with a much stronger competitor that is already doing a fine job competing. That's troublesome.
2. The iPhone can get people to switch
AT&T has been quick to point out that consumers are typically unwilling to switch from one carrier or another. And in most cases, that's true. But when it comes to the iPhone, all bets are off. Apple's smartphone has shattered all preconceived notions about the way the mobile industry works. Millions of folks from around the world switched to other carriers just to get their hands on Apple's smartphone. And although the allure of the iPhone has worn off somewhat, having the ability to go to another carrier with the device might reignite that excitement. Watch out, AT&T. More folks might switch than you think.
3. AT&T isn't the most beloved company
Although AT&T has done better in the last few years appealing to customer desire, the company still has an uphill battle ahead of it when it comes to customer satisfaction. Of course, that's the same with any wireless provider in the market. It seems that when it comes to mobile phones or the cable industry, consumers just aren't as satisfied as they could be. But that could come back to haunt AT&T. Disgruntled customers who are tired of its policies might choose to go to Verizon Wireless and use the iPhone. Right now, they have nowhere to go. But if they are given an option, more customers might leave than AT&T thinks.
4. Apple's preference will matter
By making the iPhone available on multiple carriers, Apple will have the ability to decide if it wants to give one company a head start over the competition. Maybe Apple will like to work with Verizon Wireless more and offer the company an earlier release. Maybe it will offer a few extra features in a Verizon phone that it won't include in an AT&T device. At this point, there's no telling what Apple would do with its two carriers, but AT&T should be concerned.