5G Technology World

  • 5G Technology and Engineering
  • FAQs
  • Apps
  • Devices
  • IoT
  • RF
  • Radar
  • Wireless Design
  • Learn
    • 5G Videos
    • Ebooks
    • EE Training Days
    • FAQs
    • Learning Center
    • Tech Toolboxes
    • Webinars/Digital Events
  • Handbooks
    • 2024
    • 2023
    • 2022
    • 2021
  • Resources
    • Design Guide Library
    • EE World Digital Issues
    • Engineering Diversity & Inclusion
    • Engineering Training Days
    • LEAP Awards
  • Advertise
  • Subscribe

ATT’s Cognitive Dissonance

By Staff Author | August 10, 2010

For those unfamiliar with the term, cognitive dissonance is that funny feeling you get when trying to believe two contradictory ideas at the same time. It could result from finding that you’ve overdrawn your bank account despite following a budget, gained 10 pounds despite being on a diet, and reading AT&T’s most recent quarterly report, in which it stated losing its iPhone exclusivity agreement wouldn’t hurt business.

AT&T simultaneously claims that while the loss of important exclusivity agreements could “increase churn and reduce postpaid customer additions” – operator jargon for losing customers to other carriers and adding fewer new subscribers – there will be no “material negative impact” on its income.

This begs the question: How can higher churn and fewer net adds not affect profits? Higher churn affects expenses and fewer new customers affects income. It’s practically a formula to reduce a bottom line.

I called up Ken Hyers over at Technology Business Research about this and he suggested there’s an argument to be made that the impact of an iPhone being carried on a rival network – Verizon Wireless’, for example – would be relatively minimal for the first quarter or two since many subscribers will still be on a two-year contract.

However, Hyers thinks the loss of iPhone exclusivity will hurt AT&T in the long run, and I’m inclined to agree. The high-profile complaints about AT&T’s network performance, combined with its three-year grip on the device, already have consumers praying that Apple will release an iPhone version to other carriers. There’s little doubt in my mind that AT&T will see a number of iPhone customers leave for another company if given the chance.

AT&T has repeatedly emphasized the importance of the iPhone in the past. The carrier has highlighted new iPhone activations in every quarter since October 2008. The iPhone has been responsible for the addition of millions of new customers, and AT&T’s financial results seem to show a growing reliance on the device.

The number of iPhone subscribers new to AT&T have outpaced the carrier’s postpaid net adds for the past three quarters, according to numbers extrapolated from AT&T’s earnings data. Last quarter, the number of iPhone subscribers new to the carrier was about 175 percent higher than its new postpaid subscribers as net adds slumped.

AT&T Cognitive Dissonance - Click to Enlarge

 

These numbers don’t jibe with AT&T’s attempt to downplay the potential impact of losing its exclusive hold on the iPhone. If the iPhone effect hadn’t been in play, would AT&T have lost postpaid subscribers for the past three quarters? Maybe not, but it’s hard to believe that losing its exclusive hold on the device won’t have a “material negative impact” on AT&T’s bottom line, as AT&T claims.

The iPhone has buoyed AT&T’s wireless segment for years in large part because it hasn’t been available through other carriers, and I’m not about to dismiss its influence because of a few paragraphs in AT&T’s quarterly report.


Filed Under: Devices

 

Next Article

← Previous Article
Next Article →

Related Articles Read More >

High-directivity couplers optimized for 225 – 750 MHz applications
Integrated into IoT devices, iSIM poised to make inroads
Triple-radio and multiprotocol MCUs add application processors
5G vectors
How RedCap fits into 5G and IoT

Featured Contributions

  • Overcome Open RAN test and certification challenges
  • Wireless engineers need AI to build networks
  • Why AI chips need PCIe 7.0 IP interconnects
  • circuit board timing How timing and synchronization improve 5G spectrum efficiency
  • Wi-Fi 7 and 5G for FWA need testing
More Featured Contributions

EE TECH TOOLBOX

“ee
Tech Toolbox: 5G Technology
This Tech Toolbox covers the basics of 5G technology plus a story about how engineers designed and built a prototype DSL router mostly from old cellphone parts. Download this first 5G/wired/wireless communications Tech Toolbox to learn more!

EE LEARNING CENTER

EE Learning Center
“5g
EXPAND YOUR KNOWLEDGE AND STAY CONNECTED
Get the latest info on technologies, tools and strategies for EE professionals.

Engineering Training Days

engineering
“bills
5G Technology World
  • Enews Signup
  • EE World Online
  • DesignFast
  • EDABoard Forums
  • Electro-Tech-Online Forums
  • Microcontroller Tips
  • Analogic Tips
  • Connector Tips
  • Engineer’s Garage
  • EV Engineering
  • Power Electronic Tips
  • Sensor Tips
  • Test and Measurement Tips
  • About Us
  • Contact Us
  • Advertise

Copyright © 2025 WTWH Media LLC. All Rights Reserved. The material on this site may not be reproduced, distributed, transmitted, cached or otherwise used, except with the prior written permission of WTWH Media
Privacy Policy

Search 5G Technology World