Ma Bell Goes Blind

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It's decision time, Apple (Nasdaq: AAPL  ) . The chorus calling for an end to your exclusive iPhone partnership with AT&T (NYSE: T  ) has become a digital uproar.

You'll find most of the complaints on Twitter, as they were when AT&T announced a controversial (but not entirely unfair) upgrade pricing plan in June.

The latest row relates to the iPhone's innovative visual voice mail feature. Users had been reporting that AT&T was lagging in delivering visual voice mail -- the only way to be notified of voice mail on an iPhone. TechCrunch's MG Siegler later confirmed the issues.

"While I was coming home from the office yesterday, I all of a sudden got bombarded by visual voicemails," wrote Siegler late last week. "It was only then that I realized that I had not received one in a while. How long? Since sometime before July 3, apparently. Yes, 2 weeks without a single voicemail."

Old Ma Bell had apparently gone blind.

Whether the issue is now resolved isn't clear. Either way, AT&T is suffering its share of scorn and bad jokes. "Just got a visual voice mail from 1977 from my mom saying my sister was born," joked Michael Buckingham, a software development project manager.

Siegler, for his part, calls the delay and AT&T's lack of disclosure about the problem "inexcusable." I'm inclined to agree, but I'd also love to hear management's explanation. So far, it doesn't seem to have one. Spokesperson Mark Siegel could only tell me that AT&T is "looking into this matter now." He also said the company is adding 20 cities and 2,100 cell sites, and spending nearly $18 billion this year to "improve our wireless and wireline broadband networks."

That's good, but Apple should still be concerned -- if isn't already. Every issue, no matter how small, nicks the iPhone brand. Perception is reality, and the perception -- increasingly, it seems -- is that AT&T is a poor substitute for Verizon (NYSE: VZ  ) or Deutsche Telekom's (NYSE: DT  ) T-Mobile, and possibly worse than Sprint Nextel (NYSE: S  ) , whose subpar reputation once threatened to hold back sales of Palm's (Nasdaq: PALM  ) Pre.

No excuses, AT&T. Fix this problem. Fix the network. Make amends with customers. And do it all on your dime. Apple has choices when it comes to iPhone carriers -- it's time for you to prove that you should be among them.

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Fool contributor Tim Beyers had stock and options positions in Apple at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. The Motley Fool is also on Twitter as @TheMotleyFool. The Fool's disclosure policy had its glasses fixed yesterday.

Read/Post Comments (11) | Recommend This Article (9)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 21, 2009, at 3:25 PM, microwaver wrote:

    Why not unlock your iphone, and activate it on T-Mobile. You can save money and get a much better network experience at the same time.

  • Report this Comment On July 21, 2009, at 3:51 PM, conradsands wrote:

    The Palm Pre from Sprint is excellent! I'd highly recommend it. I've had nothing but good luck with Sprint in the past few years. It's gotten even better under the new CEO Hesse.

  • Report this Comment On July 21, 2009, at 4:29 PM, jmmorri wrote:

    I swear lately I only read on these sites and blogs how bad ATT network is. NOT ONE OF YOU have a clue about the current infrastructure of these networks. I know for as fact that Verizon or any other carrier can not even come close to the bandwidth ATT currently has. The DS1 capacity at the towers in 3 times greater for ATT than any carrier in the SE United States. That is a FACT> And maybe one of you retard analyst would like to explain how much money it is going to cost VZ to convert to LTE when there is no connection to there current network. YES they will have to pay to sustain 2 networks at once while they wait for customers to switch to new devices. ATT will not have problem with its network because it is just a upgrade.

    As for the IPhone on anyother network who has the capacity to handle it???? NO ONE. And you can take that to the bank.

  • Report this Comment On July 21, 2009, at 4:42 PM, dlmart wrote:

    I believe most complainers have no idea how the network works. Nor do they know why Apple chose to partner with AT&T over Verizon et al. Here is a comment I borrowed from the “Seeking Alpha” article “AT&T: The iPhone's Achilles' Heel” which says a lot. There are more comments which may enlighten you. Please give us educated advice instead of going with the crowd.

    From: Timeline Strategy Consulting » Comments

    There's a lot of bellyaching about AT&T, and clearly Apple is attempting to drag them into offering better and more data-intensive services (ie MMS and tethering), but there are parts the country where the AT&T network is great. If you live like I do in a medium-sized city where the population density is not too high, and where AT&T has access to real estate to place stations, 3G coverage is generally excellent.

    I am pretty convinced that complaints about the AT&T network are legitimate for places like New York or San Francisco, where population density and iPhone penetration exceed the network's current capacity. Ditto for temporary high demand situations like SXSW in Austin. I have had experiences at music festivals of not being able to even send a text because the network is so over-utilized.

    However, isn't this indicative of a technology that is advancing faster in some places than in others? I don't think that AT&T has some evil, nefarious plot to deprive users of their optimum iPhone experience. I think that they are just struggling to keep up and that it takes massive investment and long lead times to add capacity in the range of what is required. It's clear that Apple is pushing AT&T to take risks and invest where they otherwise would not.

    And I'm sorry, I just don't buy that Verizon or Sprint are so much better if compared fairly with AT&T. Keep in mind that AT&T has something like 8 million bandwidth-hogging iPhones (my unconfirmed estimate) on its U.S. network. These users are browsing like no mobile users have ever done, they are e-mailing pictures, they are downloading apps, they are constantly sending location and data from apps up to the network. There is no comparably data-intensive device on Verizon or Sprint. I don't care how many e-mails you send with a Blackberry or how much you use your HTC or Samsung Instinct, it simply does not compare. There is very simply no mass - 8 million or so - of devices on Verizon or Sprint or T-Mobile using the bandwidth that iPhone does.

    So, in summary, it's more complicated than the complainers would admit, and it's fair to call it growing pains. I'm pretty sure that any technology that's worth advancing has key periods where the user demand exceeds the industry capability, and this spurs innovation.

    All this kicking and screaming should have a very beneficial effect on the United States wireless network capabilities, and that's a good thing.

  • Report this Comment On July 21, 2009, at 5:23 PM, mcp24 wrote:

    What does network capacity have to do with AT&T's ability to manage a newly launched product/feature on a device? And not all 8 million devices are in the same area, so if that is an excuse it is a very lame one. AT&T is one of the largest companies in the world and should forecast and build their network based on the take rate for any device and the potential of its users. I don't ever hear of Sprint, Verizon having issues with capacity. The fact of the matter is that AT&T's 3G network is still spotty and slow in many areas and will be until the network has fully been launched.

    Also, downloading Apps does not take much bandwidth, unless these people are downloading or streaming music, streaming video or watching TV on their device you can have as many T1's as you want going to your cell sites, it is just a waste of money. And there is no proof that AT&T has more bandwidth than any other carrier, if that were the case their data speeds would be much faster....

  • Report this Comment On July 21, 2009, at 6:13 PM, imadogman wrote:

    sounds like at&t doesn;t know it's own infrastructure either. To you at&t lovers, do you forget their long, long history of major failures. They contniually lag their competitros in technology. A recent PC World review of 3G networks shows that at&t has the worst performing network among the major carriers. Meanwhile, Sprint, who is constantly bad mouthed, has the best performing networks in most major areas and currently rolling out 4G. Below is the PC World article.

  • Report this Comment On July 21, 2009, at 6:16 PM, imadogman wrote:

    what't the point of having speed, if it doesn't work?

  • Report this Comment On July 21, 2009, at 6:37 PM, jmmorri wrote:

    Sprint and 4G is laughable 1- city (Baltimore) is not rolling out. If your phones are not compatible around the world or even with your current network how do you call that good managing?? Does ATT have problems in some areas _yes_ but considering all that is traveling on it - it is far superior to others.

    As for apps not taking bandwith its what you do with them and lets not forget all the laptops traveling ove the air waves. If you are looking to expand your devices to customers worldwide and large business (PROFIT- for you techies) then you go with the carrier that will deliver. ATT is getting enough pressure and consider that they are investing 18 billion in infrastructure I say they are getting the message.

  • Report this Comment On July 21, 2009, at 8:24 PM, imadogman wrote:

    Stay up tp date. Sprint announced today 4G in Atlanta, Portland and Las Vegas are turning up in August, that's next month. Chicago, Seattle, Dallas, Philadelphia, Charlotte and Honolulu go live later this year.

  • Report this Comment On July 21, 2009, at 8:36 PM, imadogman wrote:

    @jmmorri, you can;t call yourself superior, when you're not realiable. Also...voicemail down for 3 WEEKS and you don't tell anyone??? The facts are the facts. and, you don't have any comments about the 3G comparison test done by PC World?

  • Report this Comment On July 23, 2009, at 5:19 PM, dlmart wrote:

    If you want to offer an informed opinion, then you should research and read from more than just a few sources. Its AT&T that has the lion’s share of Fortune 500 business including Verizon & Sprint, etc. who buy lots of capacity from AT&T to support their network.

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