Customer Defections Beset AT&T Wireless

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Martin O’Donnell pointed out an article from Bloomberg that suggests that AT&T Wireless is losing large numbers of customers to both Verizon Wireless and T-Mobile. Michael Rollins, a market analyst, suggests that AT&T Wireless may be losing as many as 10 customers for every 1 that it gains from Verizon. In some markets, like the New York Metropolitan area, the losses may be as great as 20 to 1.

The article further suggests that AT&T Wireless’ losses may be skewed toward the high-spending end of their customer base. Who can doubt this when they adopt policies that hurt the most advanced users of their services? By this I mean their “just say no” handset unlocking policy and the handset downgrade masquerading as an upgrade that is taking place in the conversion from standard GSM to so-called GSM 850.

Are you an AT&T Wireless customer looking to switch? Here are some guidelines:

  • T-Mobile is the clear choice if you need:
    • widest possible choice of handsets (because they support the original GSM standard),
    • greatest number of countries where your handset can be used (again GSM),
    • most customer-friendly policy toward handset unlocking, and
    • least expensive billing plans, particularly for wireless data.

    T-Mobile’s network is not as strong as Verizon’s. But their service is priced less expensively, and in most metropolitan areas, T-Mobile’s service is quite good. I use T-Mobile and prefer it to any other wireless service at the moment.

  • Verizon is better if you want:
    • most extensive coverage area,
    • highest quality network (in terms of least number of dropped calls and related problems), and
    • fastest wireless data network.

    Verizon tends to be more expensive than T-Mobile, particularly on wireless data services. Verizon’s handsets are also often unusable outside of North America, due to the fact that they support CDMA rather than GSM.

What about Cingular? I live in the Northeast, and in some major markets in this part of the country (like New York Metro), Cingular did not have non-roaming coverage until relatively recently. So, I can’t speak definitively about its benefits and drawbacks.

Three things I am certain of, with respect to Cingular, are that they:

  • are moving away from TDMA to GSM, as is AT&T Wireless is,
  • will probably end up with a lot of GSM 850, rather than standard GSM service, and
  • are in the process of merging with AT&T Wireless, subject to regulatory approval.

As for Sprint PCS, they occupy a middle ground between T-Mobile and Verizon, from my perspective. They use technology similar to Verizon’s, meaning good wireless data service but international compatibility issues. Their network is not as robust as Verizon’s. They are not known to be as inexpensive as T-Mobile, but they are less expensive then Verizon in many cases.

You should do your own price comparison, because there are probably some relatively good deals on contracts at every carrier. My suggestions about relative costs are generalizations comparing the carriers’ general pricing strategies against each other.


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