AT&T Mobility is nipping at Verizon's heels
Verizon Wireless' subscriber rolls are growing, but not as fast as AT&T's
Source: Company reports
In the quarterly report that Verizon (VZ) issued Monday, the number that's getting the most attention is 1.2 million.
That's how many new wireless subscribers Verizon added over the past three months. And it's being compared unfavorably with the 2 million that AT&T Mobility (T) gained in the same period.
Verizon, with a new total of 88.8 million subscribers, still has the largest wireless network — something its ads never tire of reminding us. But AT&T, with 81.6 million, is catching up, and there's no mystery why. AT&T activated a record 3.2 million iPhones in the third quarter, nearly 40% of which belonged to customers new to AT&T.
Meanwhile, Verizon's total churn rate is going up (from 1.33% last year to 1.49% this year) while AT&T's is going down (from 1.69% to 1.43%).
But AT&T's momentum may be short lived.
Complaints about AT&T's spotty service and limited 3G coverage have not abated, and Verizon is starting to hit hard on those points in its TV ads. It's also started running ads that attack the iPhone directly.
Moreover, Verizon is heading into a quarter in which it hopes to dazzle customers with new high-speed services and a barrage of new phones.
It's scheduled to begin deploying a faster, so-called 4G network this fall; AT&T's 4G rollout won't begin until next year.
This quarter will also see the launch of Verizon's first devices based on Google's (GOOG) Android system, including a Motorola (MOT) "Droid" phone that is getting strong early reviews.
Verizon reported Monday that its revenue grew 10.2% in the third quarter to $27.27 billion while profits fell 9% to $2.89 billion — results that were better than expected.
AT&T reported last week that its quarterly earnings had dropped 1.2% to $3.2 billion on revenue that dipped 1.6% to $30.86 billion. Revenue from AT&T's wireless division, however, increased 8.2% and wireless profits grew 41%.
Asked in the earnings call about bringing the iPhone to Verizon, CEO Ivan Seidenberg deferred to Apple’s (AAPL). “This is a decision that is exclusively in Apple’s court,” he said. “Obviously we would be interested if they thought it would make sense for them to have us as a partner. And so we will leave it with them on that score."
See also:
- What the iPhone did for AT&T
- Verizon and Google go after Apple
- Verizon vs. AT&T: There's a map for that
- The Droid: Serious iPhone competition
[Follow Philip Elmer-DeWitt on Twitter @philiped]
I have said this before, after reading previous articles about the iPhone, AT&T, and VZ.
I would like to see an iPhone (reputedly a great instrument) on Verizon's network.
Now that would be interesting!
Unlike other, mostly sheepish players in the music and mobile industries, Verizon is not trembling nor kneeling to the media's darling iUnderdog. The media goes out of their way to ridicule Verizon – "resistance to Apple is futile" and all.
You are right, in hind sight I had four buttons at the bottom that froze(phone, mail safari, ipod). I was just trying to put the whole bad experience out of my memory I guess. It was definitely not counterfeit as I bought it the first day they came out from an Apple store. Thanks for the correction.
Ralph: apparently you are on of those customers who believes its always the carriers fault when YOU break your phone. I hate to break it to you but VZW has the best customer service in the industry, dont take my word for it, look it up for the past 8 yrs!
Hey CNN, fix the title of the article. You got it backwards….
Funny, its usually the story that's backwards.
Pre-release reviews are worthless.
The Palm Pre had great pre-release reviews; it even won "Best of Show" atthe 2009 Consumer Electronics Show.
It has been a dud on the market.
Let's wait and see what the great unwashed masses think of Droid after it becomes available.
Dave wrote: "my iPhone broke (bottom three buttons froze"
@Dave: Your iPhone had three buttons on the bottom?
They are talking about verizon over at&t, and forgot to mention customer service… Verizon's phones are a little crappy to. I don't know how i managed to go through almost 30 phones alone (all broken), but somehow they kept breaking… one lady told me i texted to much… which is fine except they say unlimited texting… so i would think i could expect to text as much as i want… theys no astrik saying as much as your phone can handle, just unlimited! but anyway, verizons customer service is worse than anything. You have to fight about everything… and then after you think you won, you talk to someone else who doesn't even know the problem…
Bottom line is verizon thinks that because it is the biggest it doesn't have to care about its customers… they say you have the biggest network… you also have the biggest headaches, and the sad part is, i am not the only one… most people i know that havn't switched, plan to, especially the ones that are moving to areas wityh better service… like the bigger cities… i know i am personally switching to At&t and would pay double for less if at&t has decent customer service, and doesn't add little and sometimes big (100 plus) fee for nothing, oh wait they say it was because i used the internet (which they claim their account thing is free, and the internet (web2.0 on phones) was suppose to be blocked…)
Thanks for the good article.
I noticed this "This quarter will also see the launch of Verizon's first devices based on Google's Google's (GOOG) Android system …"
Can you remove the 2nd "Google's"? 
ex ped: Yikes. Thanks. Done.
Use to have an iPhone with AT&T, service and reliability were awful. The last straw was when my iPhone broke (bottom three buttons froze, which I understand is a common problem). Apple would not fix/replace so I switched to a MyTouch with Google and T-Mobile service. Best move I have ever made. Great phone, lots of features and great reception, less expensive plans.
"Unless Apple can develop and manifest something unique for their next iteration, I am afraid their x year old iPhone will start looking a little dated."
That's what the naysayers said in Oct 2008 after 3G and App Store were released, as if Apple would stand still while everyone else moved forward, and yet this 3Q was Apple's best iPhone quarter ever. So if you like to be contrarian and think there's not much Apple can do to make a better iPhone, go ahead and short Apple.
But know these words: PA Semi.
AT&T wireless service is not reliable and customer service is not good. As soon as my contract is done, I will move either to T-mobile or verizon.
Philip,
Youre article is horrible! You compared AT&T's total churn rate to Verizon's postpaid churn.
AT&T's 3rd quarter postpaid churn was 1.17 which compares well with Verizon's 1.13 postpaid churn.
Your reporting is misleading and irresponsible.
"AT&T's churn rate, while much improved (down from 1.69% a year ago to 1.43% today), is still higher than Verizon's (1.13% for contract customers)."
ex ped: That's been fixed.
Your churn rate sentence is messed up as you used AT&T's total churn rate (which includes prepaid and/or wholesale) but then compared it to Verizon's retail postpaid churn rate. The trends are obvious.
Here are the numbers for postpaid churn for the 3Q over the last 3 years beginning with 2007:
AT&T: 1.31, 1.22, 1.17
Verizon: 0.96, 1.03, 1.13
The gap of .04 is the smallest ever.
Here are the numbers for total churn for the 3Q over the last 3 years beg with 2007:
AT&T: 1.70, 1.69, 1.43
Verizon: 1.27, 1.33, 1.49
Verizon is higher than AT&T for the first time.
Also, AT&T only added 1.385m postpaid customers (and the iPhone looks to be about 1.2m of them). Verizon only added 0.943m retail postpaid customers. That's about 47% more adds for AT&T.
ex ped: Thanks for the data.
ATT's wireless growth is purely based on their iPhone exclusivety, Verizon's is based on their Marketing, Sprint's loss HAS been been based on their lack of a decent line up of phones, which is about to change and T-Mobiles loss has been based on people realizing that they lack a 3G coverage that is worth even mentioning. This year we will see a plethora of Android phones, and a few iterations of the Palm WebOS phones at the ramparts of ATT & Apple, each loaded with a slue of weapons that to date are lacking in the iPhone. Unless Apple can develop and manifest something unique for their next iteration, I am afraid their 3 year old iPhone will start looking a little dated.
Except for early trials, I do not believe Verizon will be deploying LTE in 2009.