The Clock’s Ticking, AT&T. What Will You Do?

By James Mowery

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All of the talk has been on Apple’s iPhone heading to Verizon. That’s great. No, really, it is. But what about AT&T? You know, the one company that so many consumers have voiced their hatred over during the past few years while it has had the iPhone all to itself? What happens to those poor bastards at AT&T when February rolls around? It can’t be pretty.

Think about it. What else has AT&T had besides the iPhone in the past few years? What other phone has this company had that you can actually recall on any AT&T commercial? There is nothing else worth mentioning! Without the iPhone, AT&T has had nothing to differentiate it from the competition. Unless the company has an incredible magic trick planned within the next few days, this will probably remain the case as Verizon steps heavily towards AT&T’s spotlight.

But you would think that AT&T might have planned for such a thing, right? Well it appears that this, too, would be a false assumption. The only thing AT&T has managed to accomplish within the past few weeks is claiming that people won’t leave them and that Verizon getting the iPhone isn’t that big of a deal. Don’t make me laugh, AT&T! It is!

What’s Left?

Do you have Android, AT&T? Well, there isn’t anything particularly special as far as Android is concerned on AT&T. In fact, this company has been so incredibly anti-Android that it will probably come back to bite them. There was a golden opportunity for AT&T to better align itself with Android in the past year or two while they had known that Verizon could come away with a home run, but it didn’t happen. Shame on them for waiting.

Do you have Blackberry, AT&T? Unfortunately, no one would care, even if the phone does have a decent size market share. Research In Motion and Blackberry is down, not up. Furthermore, there isn’t — at least to my knowledge — any unique devices that AT&T maintains exclusivity to from Research In Motion to distinguish it from the competition. At least Verizon has the Blackberry Storm. However, we will give AT&T a pass for skipping out on the Blackberry platform, as there isn’t much potential here.

Do you have Windows Phone 7, AT&T? Actually, there might be some upside. Verizon isn’t pushing for Windows Phone 7 on their networks, and now that Verizon has the iPhone set in their future, they have no reason to bother. This leaves an opportunity for AT&T to align itself with Windows Phone 7 manufacturers. Maybe this will give the platform a push forward, too. But for AT&T, it could be worth it. They could play a new angle and milk it for all its worth until something else comes along. It also doesn’t hurt that Windows Phone 7 looks to be one of the most innovative looking platforms to come out since Android. Still, it is a risk.

But we also can’t forget that AT&T still has the backing of Apple, as noted in Apple’s recent “Two Is Better Than One” ad. They will still be able to offer the iPhone to AT&T subscribers, which is something that Sprint and T-Mobile don’t have the luxury of doing.

They Still Have the iPhone, Though!

So AT&T can still sell the iPhone, which is probably the only upside to all of these recent developments. And while it is likely that many iPhone users on AT&T’s network will jump ship to Verizon at the end of their contract, one could also assume that there are quite a few AT&T customers who will stick around because they are satisfied with AT&T’s service. The question: how many? The answer: service and value.

AT&T and Verizon are similarly priced mobile service providers right now. AT&T has a bad reputation for coverage, while Verizon has a very good reputation for coverage. So if they are competing in the quality of service department, Verizon clearly has the advantage.

But if these two decide to compete on price, AT&T might have have to make some cuts. AT&T has already taken a small step forward with the recent announcement that they plan on offering new text messaging plans. But that alone isn’t enough. The company will have to consider reducing the pricing for data, voice, or both to compete with Verizon. Competing on anything else but price would require a massive investment from AT&T to expand their offering in phones from Windows Phone 7, Android, Blackberry, or WebOS. It also doesn’t help (or maybe it does, depending on your usage) that Verizon is going to be offering unlimited data for $30, while AT&T only offers 2GB for $25.

But there is one other area that these two telecommunication behemoths could compete, and it is becoming a pretty big deal.

4G/LTE

The arrival of the new 4G/LTE technology offers AT&T yet another opportunity to differentiate itself from the competition. This is a time where mobile networks will become faster and more powerful than ever before. It is also interesting because the technology to maintain 4G/LTE is supposedly many times cheaper than 3G technology (but don’t expect the mobile networks to pass those savings on to you). This gives AT&T an opportunity to implement a 4G network while Verizon deals with handling all of the stress that the iPhone might put on its existing infrastructure (Verizon is already beefing up its 3G service in select cities in preparation for the iPhone launch).

Unfortunately, AT&T has been quick to dismiss the potential advantage of LTE/4G service. I, however, believe this to be a huge mistake, especially if AT&T isn’t taking this new wave of technology seriously.

It was only a few days ago when I noticed that while I was in the mobile department at Best Buy that at least four people were asking questions about 4G devices. This was very interesting. I knew that these people didn’t have a clue about 4G service, but Best Buy employees are quick to share their opinions about how “awesome” 4G will be. But even more impressive is that there is no 4G service planned for Virginia (which is where I live) anytime soon. So why would these people even care about 4G service?

The typical consumer might not understand what 4G service is or why they would want it, but they do want it. Maybe they want it because it sounds cool. Maybe they understand the advantages and want to be ready for when 4G is available. Or maybe they simply like the number four. Who cares? There will be 4G service eventually, and the demand will be there. Will AT&T deliver?

If it will not be AT&T, I’m sure consumers will happily move to other wireless providers who will. Because AT&T hasn’t announced any plans for launching 4G service in any markets, this seems like it could become a reality. AT&T has announced that they plan to launch 4G in some markets by mid 2011, but I am going to assume that it won’t be any more impressive than Verizon’s LTE offerings, which was recently revealed that they intend to reach a third of the U.S. population with LTE by the end of this year. AT&T’s isn’t planned to be completed until 2013.

Can AT&T keep up, especially with the potential hit to revenues they are going to take with the loss of exclusivity of the iPhone? That’s the billion dollar question.

So, Uh, What’s The Plan?

AT&T has to do something. They can’t just sit aside as their customers begin to realize that Verizon is the better deal. So I am confident that AT&T will double down on Android, Windows Phone 7, or both. They might come up with a fancy marketing name for the next “EVO,” “Droid,” or “G” series of Android phones. They could attract the likes of HTC, Motorola, Samsung, and LG to create the most innovative Windows Phone 7 devices. They might do all of these and more, but it would all only be a temporary solution until they beef up their networks or find a way to one-up Verizon.

Maybe Seth Godin can sum this up better than I can. He once said that in order to achieve success you must either “be better, be different, or be cheaper.” Which do you choose, AT&T?

About James Mowery
James Mowery is a passionate technology journalist, entrepreneur, and Apple enthusiast who has written for various top-tier publications like Mashable, Techi, and CMSWire. Follow him on Twitter: @JMowery.

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