AT&T released their first quarter results this morning http://www.att.com/gen/landing-pages?pid=6080 and to no one but cranky bloggers (not me) and doomsday rumorists (business talk show commentators) surprise, the company has reported no change in their churn rate year over year, clocking in at 1.36% for the quarter, and actually signed a record number of 1Q net subscriber adds. In addition, the company sold 3.6 million iPhones and revenues up $700 million compared to 1Q 2010.
So where are all of the whiners that have carped incessantly about the AT&T network issues? They must have all left as part of the 1.3 million subscribers who churned off AT&T in Q1. In my opinion, unless you are an AT&T subscriber with first-hand experience or you can point to hard evidence (independent consumer survey, real churn, etc.), you shouldn’t be commenting on a presumed network issue.
What is the bigger story here?
1. Time to consider debunking the AT&T network flaw. Unless AT&T churn steadily increases over the next two quarters, a sufficient enough time for a large percentage of those AT&T subscribers that are the most unhappy to get out of their contracts, the network issue a) must not be big enough to matter to a significant number of subscribers, or b) is basically a lot of hooie.
2. Apple is happy. Congratulations Steve – you have just proven that the market for iPhone won’t cannibalize itself.
3. Verizon is not necessarily unhappy. From all indications, Verizon doesn’t appear to have expected a significant number of AT&T defectors, at least in the short term. While we wait for Verizon to report their earnings officially, the early indicators are that their iPhones were largely sold to existing Verizon subscribers, which will make those subscribers pretty happy.
