Corporate Overlord Watch

12:33 pm EST December 17th, 2009 | Uncategorized | 12 Comments

Since they rolled out the iPhone and experienced a gigantic surge of customers, AT&T has spent less and less on infrastructure. According to free market true believers, this shouldn’t be. In their scenario companies like AT&T respond to consumer demand by creating a better service. In reality, unless they get prodding from outside, they’re more than happy to reap the benefit of being the only source of iPhones without doing anything serious about their network.

Topic: AT&T, Business

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12 Responses to “Corporate Overlord Watch”

Joe Anonymous says:

December 17, 2009 at 12:55 pm

Actually, it’s working just like it should. AT&T is getting their ass kicked by Verizon, which has a competing product and DID spend money on infrastructure.

The free market doesn’t insist that companies do the smart thing. It just rewards those that do and punishes those that don’t. AT&T did dumb things, and is paying the price.

Perhaps Apple will wake up and stop artificially limiting their market to just AT&T customers and trust the free market more. Or maybe they’ll ignore it and Google’s Droid will continue to kick their asses.

Put a little more thought into these things, will ya?

“The Phantom Dennis”
Oliver Willis says:

December 17, 2009 at 12:58 pm

Droid isn’t kicking anyone’s ass just yet. Don’t know what imaginary world you pulled that from.
Joe Anonymous says:

December 17, 2009 at 1:05 pm

I’m watching the Droid ads, O… and watching AT&T’s pissing their pants over them. That and the Verizon “there’s a map for that” touting their 3G coverage vs. AT&T’s.

I don’t follow it that closely, but I did read that AT&T sued over the ads, and got laughed out of court.

Patience, grasshopper.

“The Phantom Dennis”
Eric Sipple says:

December 17, 2009 at 1:23 pm

So you decided Verizon is winning based on Verizon’s advertisements?

Laughter.
Joe Anonymous says:

December 17, 2009 at 1:27 pm

Not just the ads, Eric, but AT&T’s response — to go to court, and to get laughed out of court.

Learn to read, you dolt.

“The Phantom Dennis”
Oliver Willis says:

December 17, 2009 at 1:29 pm

The dolt here is someone who says Droid is winning because of their ads, without any actual sales figures to back up such an assertion.
Joe Anonymous says:

December 17, 2009 at 1:43 pm

The reviews so far show Droid far preferred over IPhone, and Verizon’s coverage (thanks to their investment in infrastructure and openness with Droid, among other factors) being major points of preference for Verizon over AT&T.

Time is telling…

“The Phantom Dennis”
SaveFarris says:

December 17, 2009 at 2:44 pm

When in doubt, assume Oliver is cherrypicking. And as always, you’d be correct.

Gizmodo & Oliver Conveeeeniently select the highest amount AT&T has spent on Infastructure in a single Quarter (Q4 2007) and claimed that as a baseline. When all you have to do is look at this year’s Q1 PDF (located here) to see that prior to Q4 2007, infastructure expenses spiked in that quarter.

Go ahead, check out the bottom of page 5:

Construction & Capital Expenses:
Q2 2007: $4.122 B
Q3 2007: $4.664 B
Q4 2007: $5.593 B <— "baseline"?!?
Q1 2008: $4.178 B
Q2 2008: $5.142 B
Q3 2008: $5.068 B
Q4 2008: $5.288 B
Q1 2009: $3.173 B

With this post, Oliver could qualify for tenure at the University of East Anglia.
SFC B says:

December 17, 2009 at 8:53 pm

Gotta admit, claiming that AT&T is slacking off because of the profits being made from the over-priced iPhone is a signal that markets don’t work, is kind of dumb if you’re going to ignore that AT&T isn’t a monopoly and is in stiff competition with several other providers, competition it is losing on some metrics because they haven’t been able to keep up with their competitors.
texan says:

December 17, 2009 at 11:00 pm

I worked for them for years, and I can tell you that they tried to spend less and less from about 2002 forward (at least in IT). They switched from great benefits to benefits which placed more emphasis on me getting a HSA and spending more than before, they cut travel, stopped hiring, minimized raises, stopped almost all promotions and lateral moves, cut training way back, did away with docking stations, even stopped all office moves and removed half the fluorescent lights around the offices. We still got good bonuses by meeting financial goals, but you’d think the company was on the verge of bankruptcy by the way it was. Oh yeah, let’s not forget that they laid off a few thousand workers, and that they prefer to give repair workers neverending overtime rather than hiring an appropriate number of repair workers.
IMUnaware says:

December 18, 2009 at 12:04 pm

Unless I’m reading this wrong, AT&T was consistently spending like, a Billion dollars per quarter more on infrastructure than they were getting in revenue from data services. Now granted AT&T has LOTS of capital expenditures that have nothing to do with G3 or wireless data, but this is a very weak cause and effect. Also just picking the iPhone launch as the appropriate baseline is questionable.

Joe Anonymous is right in so far as there is now a strong competitor, we’ll see now if AT&T really underspent on wireless data infrastructure. I can say for myself that I am in the market for a smartphone and I am getting a Droid not an iPhone exclusively because of AT&T’s bad reputation for coverage (which, they’ve had for years btw).
gus says:

December 18, 2009 at 12:26 pm

“Or maybe they’ll ignore it and Google’s [sic] Droid will continue to kick their asses. ”

Motorola Droids sold on its first weekend, during the holiday season: 100,000

Apple iPhone 3Gs’s sold on it first weekend during the summer: 1,000,000

http://www.pcworld.com/article/181865/droid_sales_are_fine_but_seem_familiar.html

Incidentally, tests run by Global Wireless Solutions “place AT&T’s data network not just on top, but well ahead of everyone else.”

http://www.nytimes.com/2009/12/13/business/13digi.html?_r=1&em

I think there’s a reason Verizon and Motorola are investing a lot of money into advertising.