AT&T Not Interested in Keeping iPhone Customers

Moneybox
A blog about business and economics.
Sept. 19 2012 10:08 AM

AT&T Doesn't Seem To Want To Hold On To iPhone Customers

152184647
Customers line up outside the Apple store on 5th Avenue awaiting the arrival of the new iphone 5 September 17, 2012 in New York.

Photo by DON EMMERT/AFP/GettyImages

I just got off the phone after a very strange interaction with AT&T's wireless customer service people. I'm a longtime AT&T customer dating back to the day after the first day of original iPhone sales. And even when the iPhone became available on Verizon I stuck with them out of a combination of intertia and preference for the international capabilities of a GSM phone. But now that the iPhone 5 is coming out, I was thinking of switching. Verizon has LTE coverage in more cities (though AT&T has DC covered, so it's not like this is a crucial factor) and with the iPhone 5, Verizon phones also work internationally. I'm not currently eligible for the $200 upgrade subsidy from AT&T, so my plan was to call up and ask what it would cost me in early termination fees to switch to Verizon.

If the switch fee was less than $200, I'd have no reason not to switch. But my assumption was that when I pointed that out, AT&T would swiftly offer me a better deal.

Advertisement

That's how cable companies work. There's the price they charge, and then there's the price they offer you to avoid canceling service. If they're not prepared to offer a discount to people who threaten to quit, that implies they're actually undercharging customers who aren't threatening to quit. You want to start with a nice healthy margin and then bargain down if necessary.

But AT&T gave me nothing. The guy didn't even dispute that Verizon has wider LTE coverage. He just asserted that I shouldn't care too much about that because AT&T has LTE in the city where I live. Which is true. It's not a huge deal. But still it's at least a little bit of a deal. I thought they'd maybe offer me an immediate upgrade with contract extension, figuring (rightly) that inertia would keep me with AT&T and then maybe by the fall of 2014 it'd no longer be true that Verizon's network was superior. But no. They don't really seem to want to keep me or any other iPhone user as a customer. I wonder if it's a blunder or a deliberate calculation that the sky-high subsidy payments to Apple mean it's not really worth scrapping over iPhone users.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

  Slate Plus
Slate Archives
Nov. 26 2014 12:36 PM Slate Voice: “If It Happened There,” Thanksgiving Edition Josh Keating reads his piece on America’s annual festival pilgrimage.