Is the iPhone Slowing AT&T's Network?

Includes: AAPL, T
by: Eric Savitz

I see a trend.

Back in July, I wrote a post based on a Bernstein Research report which considered the question of whether the Apple (NASDAQ:AAPL) iPhone has been a blessing or a curse for AT&T (NYSE:T), citing among other factors the strain the data-happy iPhone users are placing on the company’s 3G network. The theme cropped up again earlier this week, in a Heard on the Street column in the Wall Street Journal, which asserted that AT&T is not getting much out of its position as the exclusive U.S. iPhone carrier.

Thursday morning, the New York Times picked up on the meme, with a story asserting that - surprise! - service on the AT&T network has been badly degraded by the heavy burden placed on the system by those data-hungry iPhones. “The result is dropped calls, spotty service, delayed text and voice messages and glacial download speeds as AT&T’s cellular network strains to meet the demand,” the Times wrote. “Another result is outraged customers.”

Of course, there is a potential solution: add more carriers. And there is growing suspicion on the Street that Apple next year may do just that, most likely Verizon (NYSE:VZ).

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