AT&amp;T: The Communications Company That Failed to Communicate in 2009

2009 was a hell of a year for AT&T.

The network’s notoriety incited widespread complaints, an ad war with its biggest rival and a consumer protest. Even Saturday Night Live mocked the big A.

Every cellular network has its problems with voice quality, occasional dropped calls and imperfect data coverage. And AT&T has some things other networks don’t: It has even been ranked the fastest 3G network in some wireless surveys, such as the 12-city bandwidth test recently performed by Gizmodo. The company is also clearly responding to the problems, rigorously pumping out upgrades for networks in major cities all over the nation, according to its 2009 press archive.

Yet AT&T has taken some serious heat. A Consumer Reports survey, which polled 50,000 readers spanning 26 cities, ranked AT&T as the worst cellphone service in the United States. Meanwhile, YouGov’s BrandIndex survey showed a steady decline in AT&T’s brand perception.

AT&T has a perception problem, to say the least, and most of that can be tied to its performance as the sole carrier of the most popular phone in the nation, Apple’s iPhone.

“They had some interesting parts this past year,” said Michael Gartenberg, an Interpret analyst. “You’re Apple’s partner with sharing the iPhone, and you’re getting booed louder than Microsoft. That means you’re not hitting it the way you should.”

Surely, AT&T made a number of mistakes this year, and many of them were indeed related to the iPhone. From mixed messages to broken promises, here we document the communications company’s communication failures of 2009.

Mixed Messages

Boos echoed throughout the audience at Apple’s Worldwide Developers Conference in mid-2009, when Apple vice president of marketing Phil Schiller delivered the bad news: Tethering for the iPhone would be provided by 22 carriers around the world, but not AT&T.

The second piece of disappointing news: Multimedia messaging, the ability to send images and videos through a text message, would be immediately available for 29 carriers around the world, but not for AT&T customers until “late summer.” More boos greeted the announcement.

In statements sent to the press, AT&T was quick to defend its network when customers complained about the lack of immediate MMS and tethering support for the iPhone.

“We absolutely will offer MMS on iPhone 3GS and iPhone 3G with 3.0 upgrades in late summer once we complete some system upgrades that will ensure our customers have the best experience with MMS,” AT&T said in a press statement. “These upgrades are unrelated to our 3G network.?

Three months later, the company posted a video (above) explaining the challenges of supporting the enormous growth of data usage thanks to the rise of smartphones. When speaking about MMS for the iPhone, a company spokesman said, “We’ve been working for months to prepare the radio access controllers in our network to support this launch. That means calibrating base stations all over the country; frankly, that’s a very time consuming process.”

Unrelated to the network, huh?

Also in September 2009, AT&T acknowledged in an interview with The New York Times that it faced challenges because of the data-guzzling smartphones.

“It’s been a challenging year,” said John Donovan, AT&T’s chief technology officer. “Overnight we?re seeing a radical shift in how people are using their phones…. There?s just no parallel for the demand.?

Then, a few weeks ago, AT&T’s CEO of mobility, Ralph de la Vega, said 3 percent of its data users are taking up 40 percent of AT&T’s wireless capacity, and that the company was working on ways to cut down their usage. That would imply plans to impose some sort of limitation on data use. Currently AT&T offers all of its iPhone subscribers unlimited data plans.

Over the course of a year, AT&T went from denying network issues to acknowledging there were challenges in supporting data. And then de la Vega pointed fingers at heavy data users. That didn’t go over so well: De la Vega’s statement inspired the satiric blog The Secret Diary of Steve Jobs to launch Operation Chokehold ? a protest with the intention of bringing down AT&T’s network.

Dan Lyons, the author of that blog, was joking, but angry customers took him seriously and actually tried to assault the network with heavy data usage. Though the protest did not come anywhere near to overloading the network,�Operation Chokehold made headlines all over the web.

Empty Statements

Earlier this week, AT&T’s website briefly stopped selling iPhones to New York customers ? for reasons unknown. Bloggers quoted customer service representatives who said New York was not ready for the iPhone, because there weren’t enough towers to support it.

That explanation made no sense: If the network were already overloaded, how would slowing down online sales address the problem? iPhones were, after all, still being sold in brick-and-mortar stores in New York, so suspending sales online would be ineffective.

A few hours later, a different customer service representative said the sales were suspended due to fraud issues ? a plausible explanation. But customer service employees are not considered official representatives of the company.

AT&T’s official response? A statement that explained nothing: ?We periodically modify our promotions and distribution channels.?

After the story had already been reported by countless media outlets, AT&T resumed online iPhone sales in New York, turning it into a non-story in just a day. But it was too late: Bloggers had already drawn conspiracy theories about AT&T being unable to serve New York.

Something worth noting is AT&T has a responsive, stellar public relations team that uses a Twitter account, a YouTube channel and a Facebook page to interact with the media and consumers. The story could’ve been defused in a matter of minutes with a clear, believable explanation. Instead, AT&T used its PR to respond with an empty statement, leaving the world guessing the reasons for the suspension of iPhone sales in New York.

Broken Promises

AT&T broke a few promises. The company missed by a few days its “late summer” deadline of delivering MMS, which was minor. More notably, the company did not deliver an official tethering plan to AT&T iPhone customers this year, even though de la Vega said during the 2008 Web 2.0 Summit conference that tethering would arrive for the iPhone in 2009. With 2010 just two days away, there is still no tethering plan for the iPhone.

AT&T has also effectively broken its promise of “unlimited” data, by restricting the ability of certain apps to access its 3G network. In mid-2009, Apple rejected a TV-streaming iPhone app called SlingPlayer.

SlingMedia told Wired.com it had to modify the SlingPlayer application to work only with Wi-Fi ? not on AT&T’s 3G network ? in order to gain Apple?s approval. Apple made that request on behalf of AT&T, whose terms of service state television signals may not be viewed on a device over an AT&T internet connection.

“Slingbox, which would use large amounts of wireless network capacity, could create congestion and potentially prevent other customers from using the network,? an AT&T spokesman said. ?The application does not run on our 3G wireless network.”

The effective crippling of the SlingPlayer app raised concerns among many that Apple and AT&T were closing the mobile web by regulating the type of content that could be accessed over the 3G network.

Will 2010 Be Better?

Despite damage to its brand in 2009, AT&T is still seeing massive subscriber growth, so the company is still doing great from a shareholder perspective, said Tero Kuittinen, an MKM telecom analyst. According to the company’s financial results, AT&T generated $40 billion in revenue and $10 billion in profit in the third quarter of 2009.

Kuittinen cited clever marketing and a good selection of phones from Apple, LG and Samsung as reasons for AT&T’s success.

“That’s the dream of any company,” Kuittinen said. “To provide bad service at high prices and still have great benefits.”

Perhaps the story will change if Apple shares the iPhone with Verizon, which rumors suggest is a possibility in 2010.

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