90 Percent of AT&T iPhone Subs Still Under Contract

A metric worth mulling as AT&T’s previously monogamous relationship with Apple shifts into polyamory: 90 percent of the carrier’s iPhone users are still under contract.

That’s according to Susquehanna analyst Jeffrey Fidacaro (and AT&T, which confirmed that percentage to me), who doesn’t see the launch of the iPhone on Verizon as a catastrophic event for AT&T at all. He thinks the carrier stands to lose two million iPhone users at most to Verizon–hardly a mass exodus.

AT&T’s decision last year to accelerate upgrade eligibility for iPhone customers, making it easier for them to get the iPhone 4 when Apple released it, is proving a wise move indeed. What better deterrent to switching networks than the carrier’s $325 early termination fee?

In all likelihood, iPhone subscriber churn will be no worse at AT&T than it has been at other carriers that have lost iPhone exclusivity. As Matthew Key, CEO of Telefónica Europe, said during a February 2010 earnings call, “Ever since Vodafone has started selling the iPhone in January, we see absolutely no evidence of people leaving us, churning on the iPhone going back to Orange or Vodafone, so [we are] very comfortable with our iPhone volumes. We continue to out-trade the market and no sign of churn whatsoever.”

Anonymous

Those European carriers were all running the exact same standard iPhone. If you leave AT&T for Verizon, you will need to get a whole new iPhone. It’s a much bigger hurdle for most users.

Every June there is a new iPhone model and sales more than double, so even if AT&T loses customers, their iPhone business could easily still grow.

Also, many people will still just show upnat Apple Store or Best Buy and buy a standard iPhone. Only Verizon has the nonstandard one, right?

Besides, AT&T has hundreds of Windows Phone 7 sales propping up their bottom line.
Anonymous

AT&T has allowed me to upgrade my phone each time a new iPhone was released. I had to agree to a new contract but that’s expected. I expect they will allow me to upgrade to iPhone 5 when it’s released. I agree that this expected mass exodus is a myth. I’m happy with AT&T.
Anonymous

If I were AT&T management, I would focus less on the difficulty subscribers will have in changing carriers, but on improving the experience so they have no reason to leave. I haven’t heard one AT&T executive expound upon improvements in customer service and connectivity as a way to decrease churn. They speak of subscribers like animals trapped in a cage, sometimes.
Anonymous

I’ve used all the state carriers at one time or another in the past 10 years and each has it’s disadvantages. Currently been with Verizon the last 3 years due to coverage and voice quality. The big negative is they are the most expensive and take FOREVER to release firmware updates.

I just don’t see a iPhone 5 coming to Verizon later this summer. Verizon is not about the eat the subsidy for the iPhone 4 which would barely be 5 months on contract. Like every other smartphone iPhone will likely be split between at&t and Verizon with hardware updates. But who knows maybe they will but I’d hate to be someone buying one next week. Do people have that kind of money to blow?

iPhone on Verizon has too many negative

- dated hardware with new version close
- lack to voice & data operation
- looming LTE expansion
- dismal internal coverage

I’m sure the pent up demand at Verizon will see a big rush but like at&t it quickly slides back.

90 Percent of AT&T iPhone Subs Still Under Contract

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