How AT&T Screwed up and Left an Opening for Verizon

| Editorial

I have little sympathy for AT&T's attempt to stop Verizon, in court, from running its "There's a Map For That" TV ads. Verizon got out front, out thought, out marketed, and outmaneuvered AT&T -- who was asleep at the wheel.

I've formed a theory lately that all successful advertising depends on the ignorance of the consumer. That is, if you look at TV ads today, you'll find that the vendor tries to manipulate the buyer into interest in the product by leaving out critical information, using half truths, or presenting the information in favorable ways that appear to be complete -- but don't tell the whole story.

• Actors posing as physicians give sage advice that a product will cure your ills. If a physician says it, it must be true, right?

• New car ads proclaim: "$99 down or $99 a month!" It's up to the customer to realize that "or" does not equal "and" and that $99 down means an $850/month payment and that a $99/month payment means either $15,000 down or a hidden $15,000 balloon payment.

• Ads that advertise a "Low fat" product lead you to believe you won't get fat eating it, but omit that the product is loaded with sugar to make it taste better.

I could go on.

In the case of the Verizon TV ads, Verizon is exploiting the fact that AT&T's wireless customers are, in general, fairly ignorant of technical specifics. The 3G term has been around so long, it's easy to lose sight of what legacy systems are still operating and which are not. For example, AT&T operates a 2.5G/Edge network that fills in much of that white space on the map that AT&T is so distressed about.

No matter.

Verizon has been shrewd. They've looked at geographical coverage for 3G and realized they have an advantage there. They've cashed in on their brand -- better coverage in more places. Most of all, they got out front on the 3G geographical coverage issue and cleverly ignored the percentage of the population covered.

So far, the judge in Atlanta presiding over AT&T's lawsuit has not seen fit to issue an injunction against Verizon's ads. Good for him.

I have little sympathy for AT&T here -- whose first reaction was to try to use the courts to cover up the difference in geographical 3G coverage vs. Verizon. A smarter approach would have been to spend advertising dollars informing its customers about the benefits of its network compared to Verizon's. An ignorant customer is never a good thing. Instead AT&T seems to have squandered all its ad money advertising cool looking phones.

To its credit, AT&T has quickly rolled out a new TV ad that finally does point out their advantages. What took so long?

 

That's just what AT&T should have been doing over the past year. That way, when Verizon perceived an opening, they wouldn't have been able exploit the ignorance of potential wireless customers. Basically, that's what got AT&T so angry: ignorance that led to misunderstanding.

In my opinion, AT&T fell victim to traditional advertising practices, failed to solidify its brand, failed to inform current and potential customers about its own network advantages and failed to educate everyone. If they had, then the new Verizon ads would have been met with amusement, a feeling that Verizon was throwing a Hail Mary pass.

AT&T was asleep at the wheel.

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Comments

John Martellaro

There are those who say that the new Verizon ads are retribution against Apple for not coming to terms with them in recent talks.  I don’t believe that, and I think Apple and Verizon will come to terms.

Instead, I think the Verizon ads are Verizon’s proof to Apple that they, unlike AT&T, are *not* asleep at the wheel and know how to exploit their network advantages, not just hawk smartphones.

Lee Dronick

is it true that on the Verizon network that you can not make a call and use the network at the same time?

jon

The opening they left is by having such shoddy coverage even in places on the blue map. I was driving down 280 about five miles as the crow flies from the Apple campus and my call dropped three times in a row.

Verizon has its own problems. They lock down phones and force crapware on you. Their phones don’t work outside the US, and, yes, you can’t use the net and talk at the same time. But competition never hurt anyone.

Bosco (Brad Hutchings)

John, I suggest Robert Cialdini’s Influence: Science and Practice to anyone wondering about all the lies we tell each other grin.

Verizon’s ads don’t work if there isn’t an underlying truth to the high level message. The ads are cute, but they gain momentum not because of technical distinctions between 3G systems, but because enough people who’ve bought iPhones are visibly disappointed with AT&T. I really didn’t even believe how awful that company was until I moved the family over from Sprint and got two iPhones. Or maybe I just didn’t appreciate how good Sprint was with service and options.

Similarly, Verizon’s “iDont” commercial works because it pokes fun at everything that is wrong with the iPhone. I’m not saying that the iPhone is a crappy device or that isn’t innovative or popular. I am saying it has glaring holes which that commercial identified and positioned the Motorola Droid phone to exploit. And if 500,000 units qualifies as a “spark”, I know we can expect more innovation in the next year bred by competition than Apple has given us in iPhone space in 2.5 years. I also think if Apple doesn’t get something done quickly with Verizon, Verizon will be more than happy to use Apple as its whipping boy for a year or so, because the iPhone lends itself to all sorts of comic fodder. That’s not saying it’s a bad phone, but you have to admit, “the island of misfit toys” with an iPhone KIRF is comedy gold.

John Martellaro

Bosco: That looks like a *great* book.  I’m going to order the companion, non-textbook version right away.  Thanks.

Bosco (Brad Hutchings)

I think I read the 4th edition 20 years ago in college, and have reread it numerous times since. I didn’t see where they called it a textbook. If it actually is a textbook, it is the ultimate anti-textbook, as easy and fun a read as any of Guy Kawasaki’s books. I’m surprised every time I search iTunes for it that it’s not available there as an audiobook. If you’d like a 22 minute $1 taste of Cialdini, try the audio recording of a Scientific American Mind article.

John Martellaro

Bosco: a check at Amazon showed two versions: a textbook version with chapter summaries & questions for homework—and a less expensive version for non classroom use.

Bosco (Brad Hutchings)

Hmmm, maybe I butchered the link. It should be $16.32 and eligible for Amazon Prime. But anything Cialdini writes will improve your life!  Enjoy!

chicochaz

As an ATT wireless customer, I give Verizon high-fives for telling the truth. I put up with dropped calls, calls where I can hear the person I called but they can’t hear me, and incredibly slow 3G on my iPhone. And some days this happens at my office which is literally right next door to an ATT tech facility! To add insult to injury, my office has marginal DSL from them because of crappy lines in the neighborhood. And the baby Bells were broken up so we could have better services at more competitive prices?

Lee Dronick

As an ATT wireless customer, I give Verizon high-fives for telling the truth. I put up with dropped calls, calls where I can hear the person I called but they can?t hear me, and incredibly slow 3G on my iPhone.

I have the opposite experience, my AT&T/iPhone combination has mostly been positive with few dropped calls. Now to qualify my experience I live and spend most of my time in San Diego California. I understand that AT&T customers in other cities such as New York and San Francisco are experiencing dropped call problems.

I have taken several road trips to northern California including the Bay Area, Wine Country, Yosemite, and the Eastern Sierra. I did not spend much time in San Francisco which is one of the problem areas so I will not comment on that. Everywhere else I had coverage.

In the Eastern Sierra along Hwy 395 I only had Edge except when near Carson NV and big towns like that. Snaking through a deep canyon I may lose the signal for a bit, but that is to be expected as far I am concerned in such a remote area.

Peter

I’m actually with Sir Harry, above.  I’m in LA/OC and I have never had a dropped call.  That said, I don’t travel much—since I’ve had my iPhone, I’ve travelled to Vermont twice.  AT&T doesn’t have good service in Vermont, but I knew that before I bought it so I wasn’t surprised.

That said, I have no doubts that AT&T service sucks in some places.  I have no doubts that Verizon’s service sucks in some places.  I have no doubts that Sprint’s, T-Mobile’s, etc. service sucks in some places.

This is one reason you get a 30 day “trial.”  When I got my iPhone, I was told that I had 30 days to try it out.  If it wasn’t good, I could return it.  I didn’t return it because I had no problems—or at least, none that were unexpected (ie, Vermont).

I’m a little sick of the whiners complaining about AT&T’s service.  You had 30 days to try it out.  Are you telling me that everything worked great for 30 days and, on day 31, it sucked?  Or did you just have to have an iPhone and were willing to put up with the problems?  In that case, stop your whining—you made your choice.  Quitcher bitchin’.

chicochaz

Actually Peter, I’ve had ATT for several years. I had T-Mobile before that. They had problems, too. They all have problems, it’s just an inherent part of wireless technology. I’m just stating facts and responding to the original article above about ATT taking exception to Verizon’s ads. Certainly some markets areas perform better than other. Chico, not being a major metro market, maybe doesn’t get the most towers for the best coverage. I was just talking to a client 15 minutes ago and in the middle of the conversation the call failed. Oh well, that’s the way it is around here.

Bosco (Brad Hutchings)

Peter, don’t be an ass. Yeah, I got 30 days. And trying to port two 775 numbers from Sprint onto a 949 based account literally took close to 30 days for AT&T’s best of breed customer service to even figure out definitively that it couldn’t be done. In the meantime, am I supposed to continue paying a $200+/month Sprint contract so I can cleanly back out of the switch?

It boils down to this. If you are a company I deal with and you jerk me around, I’ll badmouth you if I feel like it. When another company kicks you in the crotch, I’ll point and laugh.

And Peter, if you’d like to meet for lunch in Mission Viejo or Lake Forest, I can show you at least 10 places where your iPhone or other AT&T phone will not work indoors. I’m sure we can come up with anecdotes and counter-anecdotes for any of the companies. But I can tell you that in my experience, AT&T coverage just stinks compared to Sprint and Verizon in South County.

Lee Dronick

I?m actually with Sir Harry, above.? I?m in LA/OC and I have never had a dropped call.?

We may have the advantage with terrain and the way our cities our built. Both the Los Angles Basin and the San Diego area are mostly flat mesas. The cities are spread out with few skyscrapers. What tall buildings we have are ringed with cell antennas, so we have a lot of line-of-sight connections. By comparison New York City/Manhattan is lot of tall mountains with narrow valleys making it harder to get and keep a signal.

Just yesterday in the mail I received a “Notice of Application” notice for a cell tower on the church on the next block, well it will be disguised as a cupola on the church. I don’t think that it will be an AT&T tower because their central office with cell antennas is right across the street from the church. There will be a community meeting on the proposed cell tower and I called my Town Council to RSVP. The woman I spoke to said that there are a lot applications for cell towers in Mira Mesa, my neighborhood.

UrbanBard

I must respectfully disagree.

The entire Mobile Phone industry in the US has been a mess for a long time. Verizon was ahead of Cingular’s mobile phone service (before it became AT&T mobile.) Verizon provides quite good 3G phone service, but it’s CDMA data access is quite inadequate. Verizon’s use of wi-fi is pathetic.

Four years ago, the mobile phone industry was balkanized with incompatible technologies and frequencies. Verizon and Sprint use CDMA when most of the world uses GSM technologies. The intent of this balkanization was to lock you into a ISP contract. The Smart Phone market was barely growing. AT&T started off far behind the curve and has had to work very hard to upgrade its service. Too often, it has failed.

AT&T had to spend $2 billion to upgrade its service to 2.5G EDGE technology for the initial iPhone launch. AT&T has had to spend many billions more to provide 3G service for the iPhone 3G and 3Gs. The iPhone consists of only 3% of AT&T’s mobile phones, but it’s data use is tending to bog down AT&T’s networks.

The point is that the mobile phone system in the US is evolving and Apple’s iPhone has tended to break up the existing cartels.

AT&T still has a long way to go to satisfy everyone and 4G is on the horizon. Many billions will need to be spent for further upgrades.

Verizon is no solution for Apple, because Apple customers have gotten used to being able to talk on the iPhone and use internet services simultaneously. Verizon’s CDMA cannot do that.

The entire mobile industry is moving toward 4G (LET or HSDPA) service which would allow Apple to sign on with Verizon because 4G could use all technologies and frequencies. But 4G is between two to four years away and the networks need to be expanded to service it. Hence, there is no magic bullet. Verizon is no solution. Ranting and raving will not solve this problem.

Apple must tough this out, because there are no easy fixes. We have, at least, three years of complaints ahead of us.

Snrub

I’ve used every single major carrier over the last 30 years. And quite frankly, I couldn’t in good conscience recommended any of them to anyone. I’ve had service and customer support problems with ALL of them. And some of the problems I’ve seen were pretty damn ridiculous (18 months to collect a refund, 13 months to cancel an account, etc., etc., etc.).

I deal with hundreds of clients every year regarding their electronic technical issues and the bulk of them have asked me to recommend cell/phone service at some point as they are fed up with their current providers, but I can’t.

It’s all been trade offs for some time now. So whenever someone touts that they or someone else’s service is better than yours…. I say only if you choose to ignore specific issues.

And that’s just plain sad.

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