How long can AT&T (NYSE:T) survive as the iPhone's sole carrier? Already unhappy with Ma Bell's network performance, users are now protesting her pricing policy for Apple's (NASDAQ:AAPL) new 3G S handset. And they're doing it via Twitter.
As of this writing, more than 7,000 have signed a "twitition," as it's called, asking Ma Bell to offer early upgraders the same pricing as new buyers -- $199 for the 16-gigabyte model and $299 for the 32-gigabyte edition. AT&T has thus far refused, instead asking $399 and $499, respectively.
The few who are being offered new handset pricing are already near the end of their original two-year commitments. "The main factor is [how] far you are into your contract. You will likely be eligible in the latter part of it," wrote spokesperson Seth Bloom in an email to me last night. He continued:
We also look [at] such things as how promptly you pay your bill, the date of your last subsidized handset, etc. Please note, though that all of these factors simply add up to how early (i.e. prior to the end of the contract) AT&T can give another subsidized device to the customer.
This policy explanation strikes me as fair. But as the twitition shows, many users disagree.
There are good reasons to not like AT&T as the iPhone's carrier. Dropped calls have been a problem, and sporadic service persists to this day in my area. Ma Bell's mediocre network reputation could help to explain why Apple and Microsoft (NASDAQ:MSFT) have each reportedly sought carrier deals with Verizon (NYSE:VZ).
And what of tethering? AT&T has been promising this service -- wherein the iPhone's cellular signal would be used to connect a computer to the Web -- for months. All a spokesperson could tell me is that it's still planned. Sorry, but that's unacceptable, especially when AT&T allows customers using Nokia (NYSE:NOK) and Motorola (NYSE:MOT) handsets to tether.
Nevertheless, I have some sympathy for AT&T on the issue of pricing. A two-year contract is a two-year contract, and Ma Bell is eating a huge sum to offer the iPhone cheaply. With 3G S upgrade pricing, she's taking steps to balance profitability with customer satisfaction.
Perhaps the problem is that the iPhone sits in rarefied air, blessed with sales numbers so massive that they argue for special treatment of users. A breed apart, if you will. As an iPhone user myself, I can appreciate this feeling.
But every one of us signed contracts to get that feeling. Now, AT&T is asking us to honor our agreements. Isn't that fair?
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