AT&T CEO Admits Ongoing Network Issues

AT&T CEO Admits Ongoing Network Issues

AT&T chief executive Ralph de la Vega admitted that call quality is still an issue for its customers, but the carrier is still signing up new iPhone users in droves despite competition from Verizon.

“I think that customers are seeing improvement, but we are not happy where we are,” he said at the AllThingsD conference.

AT&T has been plagued with perceptions of problems with its network, including poor coverage and dropped calls, especially with iPhones. With Verizon now selling iPhones, network quality is more important than ever: the top two carriers offer the same stable of Apple products, so network quality and plan pricing are the main differentiators for many customers.

De la Vega noted that AT&T has made strides, pointing to heavy investment in spectrum in New York City that amounts to more than any carrier has ever put into a single city. He has also argued that the proposed $39 billion acquisition of T-Mobile will help alleviate the strain that users see on AT&T’s network with additional spectrum and towers.

Still, Verizon has a substantial lead with its 4G LTE deployment: AT&T will light up its first five cities soon, while Verizon has launched in 38 cities. IPhone users won’t see the difference, but the next iteration of Apple’s phone will almost certainly support 4G and AT&T won’t be providing much of it if the iPhone 5 arrives later this year as expected.

When Verizon announced it would also sell the iPhone, breaking AT&T exclusivity, some analysts predicted massive defections from AT&T to the more highly-regarded Verizon network, but that has not apparently happened. In fact, AT&T activated another 3.6 million iPhones in the first quarter. Verizon activated 2.2 million iPhones over the same period, though it didn’t start selling them until mid-February.

However, the iPhone 5 could inspire AT&T customers to switch as their iPhone 4 contracts expire if the carrier hasn’t addressed network quality issues by then.

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