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What Does AT&T Have That Verizon Doesn't?

By Jeff Kagan E-Commerce Times ECT News Network
Dec 12, 2013 5:00 AM PT

Lately I have been reading several very interesting stories in the media about both Verizon and AT&T. It looks like things are starting to change. AT&T quality and reliability reportedly are getting better. At the same time, Verizon seems to be losing its grip in those same areas. So what's up?

What Does AT&T Have That Verizon Doesn't?

Over the last decade or two, Verizon and AT&T have been competing on both the wireline and wireless sides. Years ago, they were both considered high quality and reliable providers of service. Then the industry changed when Apple's iPhone and Google's Android OS entered the picture.

The iPhone Gamble

Verizon Wireless was afraid the unknown iPhone would upset its applecart, so it declined to carry the device, which, as we know, was destined to become iconic. However, AT&T jumped right in and took the opposite position. It sank its teeth into a huge opportunity and got exclusive rights to sell the iPhone for years.

AT&T had a great growth period because of the iPhone. However, its reputation for quality and reliability took some hits. What's interesting is that the problems were caused by the incredible demand for the iPhone. It was a good problem for AT&T to have -- but it was still a problem.

So while AT&T Mobility grew rapidly, it also had to wrestle with iPhone demand. Verizon Wireless did not have to deal with any demand problems -- but its growth was not as strong, either.

This illustrates the core difference between AT&T and Verizon. This is the tradeoff. AT&T is bolder and more willing to lead, for better or for worse. Verizon is taking a slower growth path -- as long as it can control everything.

There are differences on the wireline side as well. Both AT&T and Verizon charged into the television provider space. Now, however, Verizon has slowed its FiOS expansion, while AT&T keeps charging ahead with U-verse.

If I am reading the media coverage of the wireless industry correctly, it seems that when it comes to quality and reliability, Verizon is getting some chinks in its armor, while AT&T seems to be getting stronger.

Verizon's Problems

Verizon has been facing wireless network pressure in big cities, CFO Fran Shammo recently said.

The company has been strengthening its wireless network in New York and addressing coverage problems, according to Verizon CEO Lowell McAdam.

After hearing this conflicting information, it seems customers are confused. So the story is there is a problem in New York City, and other cities as well. This is a scuff mark on an otherwise high-quality company.

As for AT&T, it now seems to be doing a much better job maintaining quality and reliability. What a difference a few years make. AT&T ranked highest in the latest J.D. Power smartphone satisfaction study. It ranked highest in wireless purchase experience satisfaction in another J. D. Power study.

AT&T Mobility customers are more likely to be satisfied with their smartphone experience than competitors, according to Nielsen.

I have been following the ups and downs of both Verizon and AT&T -- and in fact, all the wireless industry players -- for many years. There have been many ups and downs. Different companies lead at different times.

Things are changing once again. This time, Verizon and Verizon Wireless are scrambling to strengthen their quality and reliability. They are also fighting a slowdown in services like FiOS. At the same, time it looks as though AT&T and AT&T Mobility are getting stronger in these same areas.

AT&T's Pluses

I just attended the AT&T industry analyst meeting, and it was very impressive. I can't discuss what I heard, but this is a company that has its eyes firmly trained on growth for many years to come -- not just in wireless, but in many areas, like wireline, automotive, retail, mHealth, digital life and much more.

So why is Verizon struggling lately? There are several reasons, but I would say one key reason is people and attitude. Verizon is not the same company it was a few short years ago. Let me explain.

There was a very significant management shakeup at both Verizon and Verizon Wireless. They both have new CEOs, and they both have new media and public relations executives. This has given Verizon a very different position in the marketplace. Now it seems Verizon is starting to see some problems.

I like Verizon. I like its executives. I want them to continue to do well. However, I have written about this several times over the last year or two out of concern. You see, I write every day about different companies, different technologies, and the changing industry. Some changes are good and strong, while others are not.

I write about them because I want all companies to be winners. That is healthier for the industry, and it rewards the companies, the customers, the workers, the investors, the partners -- everyone.

When a company seems to be getting back on track, like AT&T, I like to reward it with a pat on the back for a good job. In fact, both T-Mobile and even Sprint may be showing signs of life once again.

When a company seems to be going off track, like Verizon over the last couple years, I think it's important to slap it in the face -- lovingly, of course -- and tell it to wake up.

So Verizon and Verizon Wireless, it's your turn. Slap! Instead of self-inflicted wounds, take this slap in the face as a loving nudge to set you back in the right direction. Get your ability to talk with the marketplace working again. Trust me -- it's the right thing to do.

E-Commerce Times columnist Jeff Kagan is a technology industry analyst and consultant who enjoys sharing his colorful perspectives on the changing industry he's been watching for 25 years. Email him at

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