Says Johnstone in a client note: "Over the past several years, AT&T indicated that 40 percent of its new iPhone customers came from other carriers. We estimate that AT&T has 15 million iPhone customers (as of Q-1 10) and believe that AT&T could lose as many as 6 million, or 40 percent, of its iPhone customers when Verizon begins selling the iPhone in 2011."
Because of these expectations, the analyst says: "We are reducing AT&T’s 2011 wireless subscriber additions from 6 million to 2 million (most of these new additions may be lower value connected devices such as eReaders instead of higher value long-term wireless customers), since we believe that Verizon could obtain Apple’s approval to sell and provide wireless service for the iPhone as early as mid-2011."
While the numbers seem sensationalist, they could be a possibility. AT&T does have some measures in place to prevent such an "exodus," however. The company just raised its ETF (early termination fees) to $350 for smartphones, meaning leaving for another carrier could be a pricey transaction. Additionally, family-talk and business-discounted plans are hard to switch to new carriers with, and AT&T says about 80 percent of its customers have those types of plans.
Finally, there are still plenty of consumers out there that prefer the ease of a SIM card to CDMA activations.
Written by: Andre Yoskowitz @ 26 May 2010 11:05
