Disconnecting AT&T Wireless

On Monday, I joined the millions who have ditched AT&T Wireless (NYSE: AWE  ) for another wireless service provider.

A report Wednesday from the Associated Press says that service complaints and the new number portability provisions are responsible for as many as 150,000 customers leaving AT&T Wireless each month. For me, number portability was an issue; I wouldn't have even considered switching without our numbers in tow. But I have no service complaints. Nah, I switched because I tend to work all over, and T-Mobile was willing to bundle its wireless Internet service at a discount. AT&T wasn't. So, the next time I step into a Starbucks (Nasdaq: SBUX  ) -- my office away from my home office -- I'll be making calls on my T-Mobile phone and playing on T-Mobile's Wi-Fi HotSpot.

Whatever the reasons, the rising defections can't be good for business, or for Cingular. A joint venture of BellSouth (NYSE: BLS  ) and SBC Communications (NYSE: SBC  ) , Cingular outbid Vodafone (NYSE: VOD  ) to acquire AT&T Wireless for $41 billion in February. Cingular is showing no signs that it regrets the decision, but AP reports that rival Verizon Communications (NYSE: VZ  ) says it has won 10 new subscribers from AT&T Wireless for every customer Verizon lost in the four months since wireless users were first allowed to take their numbers elsewhere. Verizon's claims aren't confirmed, but published reports say that AT&T Wireless will show a net loss of 200,000 customers for the quarter. Ouch.

Is it a coincidence that Verizon yesterday replacedAT&T (NYSE: T  ) on Dow Jones' (NYSE: DJ  ) benchmark industrial index of 30 leading stocks? Maybe. But if Verizon is right, investors who were hoping to see substantial upside from the Cingular-AT&T Wireless combination have a lot to worry about.

In the April edition ofMotley Fool Income Investor, Mathew Emmert discusses the challenges facing telecom companies in the newsletter's Cash Flow Corner feature. You can try Income Investor free for 30 days.

Fool contributor Tim Beyers was an AT&T Wireless customer for six years. He likes AT&T Wireless, but, hey, he likes his Wi-Fi, too. Tim doesn't own shares in any companies mentioned. You can view his Fool profile here.


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