How to Make Your AT&T Phone Bill Disappear

This can't be good news for AT&T. A device that let's you get around playing high cell phone charges:

Magic Jack Cell Phone Provider Destroyer

Actually… while this is a cute little toy, and might be embraced by some people who really can't afford much else, it isn't a real challenge to AT&T or other cell phone providers.

But this brings up a very important issue: the real cost of making phone calls is almost nothing. Yes, it does take considerable money to put all the infrastructure in place, but after that, it's just moving bits around for almost free.

So while this particular device isn't a big threat to big telecom, the threat is out there. Someone is really going to come up with a device that is a game changer, or build a satellite or figure out a new kind of cell tower, or something. You can't keep over charging for something that doesn't cost much.

But you can charge a lot for good service. So do the math AT&T. Stop floating plans to charge tiered pricing for data, 30 cents for texting and midnight minutes and other crap on top of your already outrageously high bills. Get your act together on the service front, provide real value for your customers, or wake up one day and find out that a company that only charges $20 a year for phone service has taken over your business.

Another Great PR Victory for AT&T

The press just can't get any better for AT&T as everyone in tech media world assembles in one location so they can all find out their iPhone's don't work:

AT&T Problems at CES

How much longer will AT&T have an exclusive contract with Apple?

AT&T Wants to Get Into the App Business

AT&T announced that it's going to try to broaden it's smartphone business by adding Android phones and Palm devices. Seems like it's preparing for a future where it can't count on gouging iPhone users to keep it's profits high. Even if Apple hadn't been planning to break it's exclusive deal with AT&T next year, all the bad press in this one must have forced it's hand.

AT&T also showed its "leadership" by chasing after the latest business strategy flavor of the month, selling apps. Here's the press release:

AT&T Wants That App Money

Yeah, it takes a lot of leadership to rush in and say, "Me too." Apple proved there is huge money in selling iPhone apps, a business no one had a clue could be so profitable until Apple got into it. We can't blame AT&T for wanting a piece of that action, and sure, on some of the lower end phones, perhaps there's some low hanging money to be made by copying Apple's lead. Nothing wrong with providing some options to people who can't afford (thanks to AT&T's over pricing of monthly service) iPhones.

But how about a little humility? How can you mention with a straight face that AT&T customers have access to over 100,000 apps as if that is something AT&T had anything to do with? But only if they have the right handset? You mean, the iPhone, right? The iPhone sells more than 99% of all smart phone apps. Come on, stop it already. AT&T already did this "customers have 100,000 apps" bit in the Luke Wilson commercial. It's time to give it a rest or state the obvious: AT&T has exclusive rights to the iPhone and the iPhone has lots of apps.

While it's hard to blame AT&T for wanting to get into the apps business, it's going to fail miserably. According to this announcement, it looks like it's going to focus on selling apps to phones that really don't have the power to run them, and to customers who choose cheap phones because they don't have money to spend on apps. So it's really a marginal market even if some genius were to try to tackle it, and lately AT&T hasn't been showing it has a lot of genius people in positions of power.

What's amazing is that as much as AT&T would like to model Apple's success with the App Store, it appears to be so jealous and hating of the iPhone that it can't see the the real business model that it could succeed at. AT&T makes tons of profits on the iPhone, yet provides such lousy service iPhone customers are literally begging Apple to bring in other carriers. AT&T knows the iPhone is the best mobile platform out there, and yet can't bring itself to mention it's name in advertisements touting it's features.

That press release above is almost two thousand words. Guess what word isn't mentioned? iPhone. How can a company that makes huge profits thanks to the iPhone not mention the iPhone in a press release about apps? It's crazy.

The real business model for AT&T would be to develop or encourage good apps for the iPhone, at least initially. That's where the real market is, and there's tons of money being made in it. Why not make great apps (or buy them from developers) and offer them first on the iPhone, then port them to lower end phones?

AT&T currently offers only a few iPhone apps, and none of them are must haves, or even nice to haves. One, AT&T Navigator, outrageously wants you to pay a additional $10 monthly fee for some simple mapping features. Out of two thousand reviews on the Apple Apps Store page, over one thousand are 1 star and very negative. Customers, justifiably, are really pissed off AT&T has the nerve to try to add to it's already too high monthly bill for such a lame app. Whatever little money AT&T has gotten from this app, and I'm sure it isn't much, isn't worth the negative PR it's created for itself by looking greedy, once again. No wonder AT&T doesn't even mention it's own iPhone apps in a press release about… apps.

Let's imagine a different approach at a different kind of AT&T. Imagine it offered that same app, for free, with no monthly charges. But the catch is, you have to be an AT&T customer. So if Apple does allow the iPhone on other carriers next year, you'd loose that app. If it was a good app, that just might be enough to keep you at AT&T, even if other carriers offered lower rates. Now, if AT&T was smart, it would have taken advantage of it's lead time with the iPhone to develop a lot of free apps that are only available to AT&T customers.

Those same apps could then be ported to other AT&T phones that weren't iPhones. The development costs and ongoing support could be shared. And yes, it doesn't all have to be free. AT&T could offer premium versions of apps that cost a little bit more. And perhaps even monthly fees for some premium features.

But AT&T just doesn't get it. It is so addicted to the idea of gouging customers each month that it can't really even think about other ways to make money. Like building a loyal fan base first and then making money from them. Like offering things for free before you try to charge for extra services.

Meanwhile, as AT&T is trying to play follow the leader by chasing after Apple's App Store, it's missing out on chances to break into the next business model that hasn't been exploited yet. One of which Apple will probably create with it's upcoming touch pad coming out soon.

AT&T Works to Improve 3G Network

I want to focus on a rare bit of good news coming out of AT&T. Not because I don't like focusing on good news, but simply because it's rare. AT&T announced that it was implementing software upgrades that will improve it's 3G network. I'm going to take the press release at face value and not try to assign it evil ulterior motives:

AT&T Press Release on MacDaily

I'm sure deep in corporate headquarters, the big bosses get annoyed when people complain about AT&T's network because they know they have highly paid tech people working on it and they will be able to make announcements like this if we just give them time.

But that's not the point, big bosses. I know, everyone knows, you will fix your network eventually. The question is, what do you do about it now? The first thing is, don't lie. If you have problems, admit to them and say your fixing them. Don't spend millions in advertising trying to cover them up. And when people complain, give them so credit for having a point, be humble, and keep working on fixing the problem.

Is that too much to ask while we hand over a $100 a month of our hard earned money to you?

But in the meantime, thanks for this announcement, I'm sure these upgrades will improve the network. Then can we have free tethering?

We're All Still Stuck with AT&T

Looks like the hoped for alternative to the iPhone and AT&T contract hasn't happened yet:

Google Phone is a Bust

AT&T Lies About Tethering in 2009

So we now know that all of AT&T's promises about delivering tethering in 2009 were bullshit. This includes a lot of puff pieces that it was coming soon planted by AT&T PR flacks on various blogs. Here's a quick piece on the subject:

iPhone Tethering Didn't Happen as Promised

Oddly, it blames Apple for making a deal with AT&T to begin with. More to come on this subject…

AT&T Year in Review

Here's a brief piece on AT&T's year in review. Guess what, it's not a positive review:

AT&T's Bad Year Compared to Apple's Great

The review points out continued troubles with AT&T service, but it's also interesting to note that most of the problems listed are basically PR problems. AT&T has to fix it's service issues, which it probably eventually will, but the question is, what kind of perception will people have of the company when it finally gets around to providing decent service? Right now, the company is losing a perception war very quickly. It's become a poster child for a bad corporation.

I'm sure AT&T execs look over long term plans and know that at the rate they are upgrading, eventually they'll handle traffic. But what if by the time that happens, they have serious competition, for example on the iPhone? How are they going to hold on to customer's that have had problems for years, and get new customers who have listened for years as AT&T's bad service become a one-liner joke?

AT&T has been playing based on an old corporate model that simply won't work in a new age. Buy up as much market share as you can, provide basic service at a premium rate, and brand yourself into a monopoly. AT&T either has to prepare for being the lowest cost provider, or offer premium service. Right now, it offers neither. It spends tons on advertising, but thanks to the internet, a small blog like Fake Steve Jobs can take over the media with something like Operation Chokehold, IF he points out something that is obvious to everyone. Like AT&T service in New York sucks and costs too much. You can't ad buy your way out of the truth anymore.

AT&T could have responded by apologizing for service, offering some rebates, promising (and delivering) to improve and won the PR battle. Instead, it responded by more huge ad buys of Luke Wilson saying vague things, planting fake stories, and burying it's head in the sand. It's not going to work and if AT&T doesn't change soon, it's going to have another bad year.