Tuesday, May 31, 2011

Which is better, Verizon or AT&T?

In the first quarter of 2011, AT&T's revenues were $30B with profits up a record 39% to almost $3.5B. With such bumper results, you would think that AT&T customers would be the happiest they've ever been. Think again. Customers are leaving AT&T in droves, mostly to Verizon now that they have the new iPhone4. But does that tell those whole story? Is Verizon truly better? Is it worth switching?

I've been with AT&T since I first moved to the US almost 12 years ago with Hewlett-Packard. Although I can't say that I liked them, I didn't really dislike them either. Their coverage with no roaming charges seemed okay and since I traveled a lot, it worked well for me. When the iPhone first came out, I was an early adopter. It was love at first sight. But it hasn't been a completely smooth romance. My first sign of trouble was the problem with my iPhone not ringing. I could have 5 bars and then receive a notification that I've got a voicemail. The phone never rung and didn't even indicate that someone had called; it just diverted directly to voicemail. After researching on the internet and talking to AT&T, it turns out that this is a 'glitch' with no known fix date. In addition, the percentage of dropped calls on AT&T's network had risen to 5.8 percent in 2010, compared with 2 percent for Verizon, according to a survey by Changewave Research. Infonetics Research.

More recently, I've been finding that my iPhone has gotten slower and slower, even in 3G areas. If I'm in a city, or at a convention such as CES earlier this year, it's almost impossible to use. This has been happening as far back as 2009 (see the NYT article "Customers Angered as iPhones Overload AT&T". So what has AT&T been doing to fix the problem? In March it announced that it would spend $39B for T-Mobile, a deal that PC Magazine calls "For phone owners, tech lovers, and American consumers, this is a total disaster." Once would have thought a better use of the money would be to speed the upgrading of their network to 4G as AT&T is already lagging Verizon in that regard.

But what about pricing, how much are you going to pay? Here's where it get's interesting. Rather than fix their network, AT&T has changed their pricing plan. Gone is the unlimited data plan, even though in the 2009 New York Times article they reported that they have "no intention of capping how much data iPhone owners use". Now a new iPhone 4 comes with either a 2Gb plan ($25/month) or 4Gb ($45/month). But what happens if you go over? One of the great things about the iPhone was never having to worry about how much data you use. Now on AT&T, overage is charged at $10/Gb for the 4Gb plan and a whopping $75/Gb for the 2Gb plan. Verizon on the other hand still offers a unlimited plan for $29.99 (for a limited time), PLUS for an additional $20 you get to tether up to 5 other devices (AT&T allows you to connect 1 device via the ultra-slow Bluetooth connection). So if you have an unlimited plan on AT&T, make sure that you keep it.

Finally, I have a real problem with a company that doesn't appear to have it's customers interests at heart. For example, in March of this year, AT&T only just admitted that it clipped the wings of its 4G network and that is the reason that two recently released phones, the Motorola Atrix 4G and the HTC Inspire 4G have dismal upload speeds. In another example, in Feb this year, a California man issued a class action lawsuit against AT&T claiming systematic over-charging. He engaged a consulting firm that found out that, over a two month span, AT&T bills overstated traffic up to 14 percent resulting in inflated data charges. Talking of inflated charges, AT&T round-up your data charges. For example, if you go 2.1Gb over your plan, they charge you for 3Gb. 

So what's the bottom line. For me, I've already moved my data card over to Verizon and it's been a great experience. I'm paying half what I used to, the coverage and speed is better, and the customer service is awesome (for example, I can suspend my service for up to 6 months a year, something AT&T used to offer but stopped several years back). As soon as my contracts come up I'll be moving over our 2x iPhones and the kid's Blackberries.

For you, if you have an iPhone and are thinking of the iPhone4, or are looking for a new plan, it may be time to look at switching to Verizon. That is of course until it all changes again!