AT&T: Chokehold is “irresponsible and pointless”

Screen shot 2009-12-15 at 11.27.29 PMThat’s what they told Cult of Mac in a statement tonight, and all I can say in response is, Um, have you read this blog before? Irresponsible and pointless are pretty much all we do around here.

But yes, we feel chastened. Frankly, we should be ashamed of ourselves.

Then again, at least we didn’t rake in $40 billion in revenues and $10 billion in profit over the past nine months by selling a wireless network that doesn’t work right.

And at least we’re not saying one thing in our advertising (unlimited!) and another thing when we talk to investors at Wall Street conferences.

As for Chokehold, people keep asking me if I think it will succeed. My answer is that it already has. Have you seen the coverage of this thing? It’s all over Twitter. Tonight it hit the Wall Street Journal. Who knew there was so much anger out there? As far as I’m concerned, it’s mission accomplished.

I think the reason people are so angry goes beyond AT&T and the iPhone. I think the anger stems from the fact that we’re living in the United States, which used to be considered a First World country, and yet we’re dealing with a wireless system that feels like something you’d find in Port-au-Prince during hurricane season. In fact the developing world is racing past us, building out new wireless networks while we’re stuck with this POS legacy infrastructure run by POS legacy behemoths that either can’t or won’t bring it up to snuff.

I mean, consider this fact:

AT&T, a huge wireless provider in the United States, cannot reliably connect calls in New York City.

How can this be?

But AT&T has a much bigger problem on its hands. The problem is that the wireless data explosion is just beginning. This 3% of AT&T users who are supposedly accounting for 40% of bandwidth use? Pretty soon that 3% is going to become 30%.

The whole point of having these mobile devices is to consume data. This is not just about the iPhone. There’s the Droid, and the Pre, and soon there will be the Nexus One and a zillion other Android phones. Plus all the tablets. This is the future. We are going to carry these devices and use them as our televisions, our radios, our newspapers.

The appetite for bandwidth will be insatiable. The network operators that will prosper will be the ones that can keep up with the demand. The ones who don’t will get left behind. Sure, for now companies like AT&T can hang on to customers with exploitative contracts and exclusivity deals. But at some point, and I think it will be soon, the network operators will have to compete, for real, based on quality of service.

The fact that AT&T is already bonking, here in the first five minutes of a 60-minute game, is terrifying. It’s their own fault, of course. Go look at their financial statements and open up the Financial Operations and Statistics Summary and look at capital expenditures over the past eight quarters. I’m no math whiz, but it looks like capex has gone down by about 30% over the time period. Scroll down a bit to the Wireless section and check out data revenues — they’re up 80% over the same period.

Irresponsible? Pointless? Yes, that sounds familiar.


Posted by Steve at 12:35 am | View Comments | Links to this post
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