Continuing the Conversation around the iPhone/Verizon Launch

When Verizon Wireless announced that it would finally offer the iPhone, everyone cheered. But there was also a flurry of commentary—including ours—raising questions about the quality of the customer experience that US iPhone customers will now have. Will it be better with Verizon Wireless? This is a customer issue that I have long felt that Apple should own. (What Can Damage Apple's Amazing Customer Experience and Brand?) Delivering a great Apple-branded customer experience includes my total iPhone experience. And, if I can't make phone calls or get reasonably speedy Web access, that reflects badly on the iPhone, not just on the carriers.

Tom Hagan, one of the smartest guys on the planet, (my husband), and a newly minted cynic when it comes to oligarchies (corporations+politicians+regulators) offered his "whack on the side of the head" analysis of why Verizon Wireless would risk clogging its network with consumer video downloads by offering an "all you can eat" data plan for the iPhone. Tom's post, which I titled iPhone Politics: Why U.S. Wireless Carriers May WANT to Encourage Network Congestion, engendered some commentary. The most interesting rebuttal comes from an anonymous contributor who appears to be equally cynical about Verizon Wireless' motivations for encouraging its customers to abuse the scarce bandwidth we all share. Here is the rebuttal/alternate theory:

The iPhone and LTE4G: The Perfect Storm for Verizon?
By Anonymous

Those who think that major corporations have a grand plan in place and follow it to success are usually wrong. However, what if Verizon Wireless just happened to stumble onto a plan that will help grow the number of users on both their 3G and 4G networks?

In December, Verizon launched their next-generation wireless broadband network, calling it LTE4G because it is based on LTE (Long Term Evolution). They have the system up and running in 38 metro areas in the U.S. covering over 100 million of our 300 million total population. They have spent billions of dollars on this network and have pledged to double the coverage in 2011 and to cover 96 percent of the U.S. population by 2012.

How do they attract customers to this network quickly? The devices which are available today are two USB modems which are capable of both 3G and 4G operation, and, at CES, Verizon showed off several Smart Phones, a couple of tablets, and a Wi-Fi to 4G wireless router all of which will be available in early 2011. The issue now is to fill this network with customers.

Next up was the announcement of the iPhone coming to Verizon. It will make use of the 3G network and not the 4G network, and there is a lot of speculation about the Verizon network being able to handle the increased data load since AT&T has been struggling with that issue for the past few years and has reported that only 4 percent of the iPhone users account for 40 percent of the iPhone data traffic on their network.

So, you are a Verizon 3G user and you notice that your network speeds start to degrade as more iPhones make their way onto the network. At some point you get upset because you are only getting about half of the data speed you were getting before, so you go into a Verizon store or call Verizon on your phone and explain your issue. Their answer? Well we can move you up to our LTE4G network and get you a device which works on both networks. On our LTE4G network you won’t have to contend with the iPhone traffic and the data speeds are a lot faster.

By design or my accident? We will never know for sure but this combination seems to be the perfect storm for Verizon Wireless.