AT&T has only reduced spending on its network since the 2007 iPhone launch
AT&T has received a great deal of criticism for the abysmal quality of its network in major cities. They've always countered that they were going to, at some point in the future, upgrade the quality of service in those areas where it is poor. But according to their own SEC filings, they've actually been pulling back on spending on their network.
All this time they've been taking more and more iPhone owners on unlimited plans, they've actually cut their spending on the network that is supposed to carry their data. Is it any wonder that people are so mad?
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Comments (24)
This is the fact, no dispute!
You can only do so much construction in an area. Maybe the numbers they were doing before were because they were spending on new towers, and the new stuff is just upgrading those lines. Not everything increases in cost when you're covering 97% of Americans.
At any rate the AT&T bashing is getting very wearing. I got news, Verizon is exactly the same. They're cell phone companies.
There is no way that Steve Jobs is going to allow the exclusivity deal with AT&T to continue in 2010 unless AT&T allows so many concessions in negotiations that Apple would end up owning AT&T.
Since that is not going to happen then the iPhone will definitely be on more than one US carrier in 2010.
Maybe, just maybe, AT&T is not spending the money because they know that:
1. Apple will not continue to give them excusivity.
2. They will loose customers when #1 happens, putting much less demand on their network.
The company I work for has AT&T as single-vendor provider of Voice and Data services (except mobile). During initial contract negotiations, they did just that. They promised anything and everything we could have ever wanted...then never delivered the product and over billed us by 150%. Needless to say, we are terminating the contract and moving on.
This is their business model, though...over sell, under deliver, over bill, and see what sticks.
So, they very well may have given Apple a share of the company, just to keep business they never intend on satisfying.
That theory is actually kind of disturbing.
Those greedy jerks, LOL!!!!
I'm usually a defender of AT&T because I have no service problems with my iPhone, but this is horribly damaging news. There's no defense for these numbers. I could understand keeping network investments the same, but decreasing them while revenues skyrocket is just not smart.
And it shows. ATT has hampered its services, reneged on its promise,and has crapped on its customers. The sooner Apple rids itself of this albatross the better.
There's a graph for that?
How does this prove anything? Gizmodo? That site is a joke. If a company makes a large investment up front on a product & then ads more functionality to that product as time goes by & it doesn't cost as much as the initial investment, does that mean they are neglecting their product? Or does it mean that the updating of that product just doesn't cost as much as the initial technology investments made? I'm not sure this proves anything. To build a network from the ground up would cost more than maintaining & growing that network wouldn't it?
Of course setting up the network in the first place is more costly. But they can still spend more than they are on upgrades, which they clearly need in many areas. It has to be done eventually... why not sooner rather than later?
Then according to your very logic, ATTs network growth should have been growing exponentially, due to decreasing costs. Their total expansion in 2009 should be a lot more than their total expansion in 2007, due to those descreasing costs.
Just because costs are decreasing does not mean the investment amounts should decrease along with it, should just mean that they can now accomplish more growth with the same amount of money as before.
Not to defend AT&T...
Who ever said lack of investment money was the problem?
I don't have a great deal of knowledge of how these things work, but it took months just to get a permit to put a shed in my backyard. Not sure how long it takes to get approval for a 200+ foot cell tower, plus power, data and other things.
I'm not sure the network is a candy machine that you can just stick dollar bills in and get a candy bar from. Seems like these things take time.
A little but of transparency would be nice though... maybe an AT&T network blog where they can update us on their plans. I don't think that is too much to ask.
ATT makes more money this way. Why spend more money on their network, when they can just scrape by with a subpar consumer experience? Their data revenue can increase exponentially just because of the iPhone, and their expansion costs can remain fixed because they know they can still get by without upgrading the network and people will just put up with it, which in the end means much more profit for ATT.
Shady business at its finest. However my coverage in my area is perfect so it doesn't affect me, but its still going to do some damage to their already horrible image, and as a result will do further damage to Apples iPhone image.
On Verizon is going to have fun with this one.
Here's why this doesn't hold water--
We're in a recession. Nobody is increasing spending on anything. Everyone's been cutting back for most of this year. It will change as the economy improves.
AT&T is anything but perfect. But I don't see people racing to Verizon because it's the promised land either. I live in Los Angeles, and there isn't a network in existence that doesn't drop calls somewhere around the city. AT&T isn't all that bad.
Hypothetically, ATT's problem is lack of capital investment in its network wheres company X (aka Verizon) poor performance is due to idiocy, mismanagement, and simple neglect of customers. Unfortunately, the end result is the same. Regardless of the cause(s) folks are angry, frustrated, and disillusioned.
Sprint, however, is advertising its 4G network. So what is everyone else's excuse for not being like Sprint?
I personally work for ATT (AKA Evil Empire) and this is all true actually, granted I don't work in the wireless side, but all they ever talk about is cutting cost this, and pushing back on that...
It's really pretty sad, and when you keep crapping on your customers and employee's all the time, you're going to get crap service... "You have to spend money to make money" & "You will only be rich for a short amount of time when you start caring more about filling your pockets with gold than putting the money into the labor and maintenance where it's needed..."
Simple solution for me. I bought the 3Gs in July and terminated my service in November with no charge.
AT&T sales and customer service continually told me I should be receiving excellent service - as they told me the calls kept dropping.
Enough was enough
It was a sad day 'cos I loved my iphone
Now I'm with verizon and i have a crap phone, but at least I have a phone.
Shame on you Apple.
Rob
Hi,
Really that is fact.I heard that this year AT&T said it will have invested between $17 billion and $18 billion in its wired and wireless networks. Among those upgrades are new cell towers intended to boost reception. Further down the road, the carrier expects to have its high-speed HSPA 7.2 upgrade completed in 2011.
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You know I really don't have a problem with ATT service where I live so all this griping is news from a distant land as far as I'm concerned. As for infrastructure investment, ATT seems to be spending far more than Verizon. Verizon recently boasted that they spend $6 billion/year on infrastructure; ATT appears to spending about twice that. And what was ATT's infrastructure investment before the iPhone? If it was half what it is today I think ATT should be applauded for continuing to invest heavily, even through an economic downturn. Just my two cents.
The issue isn't the network, or the lack of upgrades/new towers.
At the end of the day, it's about customer service. To me, that is what's really lacking here. The minute Apple goes with either Verizon or T-Mobile, will there be a huge exodus of people? Possibly.
Dropped calls are annoying. That alone will cause a good number of people to switch networks, iPhone or no. Particularly the business/enterprise people, who depend on their stuff way too much.
Will it spell the end of ATT as we know it? Probably not. For once a number of people drop off their network, suddenly, dropped calls won't be as big an issue. Why? Less people, which means less traffic, which improves...well you get the picture.
Until there is complete, total, and almost to the point of overkill coverage all over the country, there's a real issue with the amount of data we send over 3G/4G networks with smartphones in general.
Best idea: Build more towers, sure. Upgrade the equipment, for sure. It's the infrastructure, and frankly, no one or two carriers are going to be able to handle it all without some severe investing.
But there should be no talk of this being the customer's fault. That's poor customer service, and I think that's pretty obvious. So does the Fake Steve Jobs, by the way. (You can read that here: http://www.macworld.com/article/145138/2009/12/fakesteve_att.html.)
Doc
great graphic...maybe
what if it was shown as the percentage of AT&T's budget total. Is it the same portion of spending or increasing? You know that we are in a small cash crisis these days for investing...