AT&T (T) has spent months building up its crippled wireless network which has been overloaded by data sent to and from Apple (AAPL) iPhones. The telco says it has finally cured most of the problems through large investments in its 3G cellular infrastructure, particularly in big cities.
The new Apple iPad is not supposed to put as much pressure on AT&T’s network because it has the dual capacity to work on WiFi and 3G. Those people who choose to use the WiFi option will put little load on the network. But, iPad users may not be so accommodating.
Data collected by BusinessWeek shows that iPad owners may not opt for WiFi as their preferred method for tethering themselves to the internet. ‘The iPad “is extremely bandwidth-intensive,” says Craig Moffett, an analyst at Sanford C. Bernstein, who has a market perform rating on AT&T’s stock, told the magazine. “It could set up users for a disappointment,”
AT&T has said, as might be expected, that the iPad will not put an added strain on its network. Of course, the company has largely denied that it has terrible problems with iPhone service. But, that is not true, and the trouble has allowed arch-rival Verizon Wireless to promote the strengths of its 3G network compared to AT&T’s
AT&T needs the iPad to help it continue to gain market share in a cellular industry where most Americans who will have handsets have them. It will have to handle the wrath of its customers again though. Another debacle with its 3G network will make it more likely that subscribers will look to Verizon and Sprint (S) for service, just as Verizon becomes Apple’s new partner in selling the iPhone.
Douglas A. McIntyre
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