Will Verizon iPhone Make AT&T Look Even Worse?

AT&T has been treated like a telecommunications pinata over its inability to provide satisfactory service levels for iPhone subscribers, and the heat is going to get turned up if the Verizon iPhone rumors turn out to be true.

That's because a Verizon iPhone would put AT&T into a side-by-side comparison with the nation's most highly regarded carrier, and the contrast might not be a favorable one for AT&T.

The iPhone on Verizon's CDMA network would likely perform better than its counterpart on AT&T's GSM network by virtue of CDMA's better performance and efficiency, says Steve Beauregard, president of Santa Monica, Calif.-based mobility solution provider Regard Solutions.

"It's widely held that a single CDMA tower can cover roughly the area of two GSM towers," said Beauregard. "In addition to the spectrum advantage, there are technical efficiencies of IS-95 [a CMDA standard from Qualcomm] that give Verizon a slight leg up over GSM rivals."

However, Quy Nguyen, CEO of Allyance Communications Networks, a solution provider in Irvine, Calif., doesn't think CDMA or GSM will be the determining factors in the carriers' overall iPhone customer experience. In places where user density is high enough, and wireless network capacity can't handle bandwidth demands, all carriers will have problems, he said.

"Imagine going to the Super Bowl and making a phone call -- most calls would have issues going in or out," said Nguyen. "Both technologies would have trouble managing and handling the amount of traffic from a small extremely dense area."

In any event, AT&T believes its experience dealing with the iPhone traffic flood gives it an advantage over Verizon. AT&T is making the case that iPhone bandwidth usage has surpassed anything that it -- or any other carrier -- could have ever imagined or planned for.

AT&T "is managing volumes that no one else has experienced," AT&T CTO John Donovan told The Wall Street Journal.

Next: AT&T's Network Upgrade Plans

To deal with the situation, AT&T plans to spend $2 billion on upgrading its wireless network this year and will double its network capacity. The carrier has also been working with Apple to improve the functioning of iPhone hardware on its network, according to the Wall Street Journal report.

Despite these moves, many industry watchers believe that a mass exodus of subscribers from ATT&T would be a foregone conclusion if Verizon gets the iPhone. Ironically, this would probably help improve AT&T's service levels, notes Alan Gould, president and CEO of Westlake Software, a wireless solution provider in Calabasas, Calif.

"That same attrition, or churn, will actually start to improve quality on the AT&T network. For example, Sprint service right now is fantastic in many areas; they have lost 5-10 million users," said Gould.

AT&T is describing its bandwidth bottleneck as a problem that will require industry-wide effort to solve. Earlier this month at CTIA Wireless, Ralph de la Vega, president and CEO of AT&T's wireless and consumer markets said the industry is at a "critical point" and will need cooperation from handset makers, application developers and government agencies to deal with the problem.

Beauregard agrees from the standpoint of holding mobile application developers to a higher standard. In fact, that's been the biggest contributing factor to the mess that AT&T finds itself in today with the iPhone, he said.

"Even with the efficiencies of CDMA, the proliferation of poorly designed iPhone apps from inexperienced developers could cause the same issues on Verizon's network as those that have clogged up AT&T's network," he said.