A problem? AT&T's wireless network is the punchline

Mike Dano

AT&T Mobility (NYSE:T) appears to have a serious problem, and as far as I can tell the company is doing its absolute best to ignore it completely.

I'm not talking about AT&T's network performance. There has been plenty of ink spilled over whether AT&T has been able to keep pace with dramatic increases in data traffic, whether smartphone signaling is causing the problems, and exactly how much money the carrier is investing to improve network capacity. This is all very interesting and important, but it's not what I'm writing about.

What I'm writing about is Americans' perception of AT&T, and how the carrier is responding. Specifically, I'm writing about how late-night pundits including David Letterman, Jon Stewart of the "Daily Show" and "Saturday Night Live's" Weekend Update have made AT&T the butt of their jokes. If you haven't seen these bits, let me summarize: The Apple (NASDAQ:AAPL) iPhone would be a great device if not for AT&T's shoddy service.

I would think that having a company's wireless service ridiculed by virtually all of late night's top comedians would represent a major blow to that company's brand position, and I'm not alone.

"It's a huge problem for AT&T," said Kurt Scherf, vice president and principal analyst of technology market research and consulting firm Parks Associates. Scherf said concerns over the performance of AT&T's network have spilled out of the "technorati" and into mainstream America.

Further, it's not just Jon Stewart who appears to be having problems with AT&T's wireless service. According to a new survey from ChangeWave Research, which asked 4,040 smartphone users in March how many dropped calls they had experienced in the past three months, AT&T customers reported 4.5 percent of their calls were dropped--three times higher than Verizon Wireless (NYSE: VZ) customers. Those results come on the heels of similar findings by Consumer Reports. (To be fair, the results of such user surveys are notoriously erratic.)

Nonetheless, at least some AT&T customers are unhappy, and the big names of late night are having a field day. What is AT&T's response?

"When any customer tells us about a problem, we take it seriously and do our best to fix it," a spokeswoman from the company said in response to my questions. Then, she proceeded to trumpet AT&T's network performance. Among her claims: "AT&T's call retainability is within two-tenths of a percent of the market leader." She also questioned the results of the ChangeWave survey. Click here to read AT&T's full response to my query.

Now, I am no branding expert, but I'm pretty sure that AT&T touting its superiority is not a good response to David Letterman joking that the next-generation iPhone "didn't work anyway--it uses AT&T."

According to Parks Associates' Scherf, AT&T needs to respond to the jabs with regret and humility rather than defiance. AT&T should say: "We care about you and your experience ... and we're going to solve these problems," Scherf explained.

I agree AT&T seems to be a little tone deaf to the whole situation, though I'm not sure what the carrier's response should be. I do know, however, that this is one problem that "Seth the blogger guy" can't fix. --Mike