Summary
Customer satisfaction with ATT is at an all time low, the lowest of the top four carriers in the US. But, the same fate awaits all the other carriers as well. LTE will not eliminate the causes.
Analysis
There is a lot of press right now about ATT's low customer satisfaction rating. Almost everyone agrees that the cause is the increased bandwidth utilization of new services delivered by the Apple iPhone.
ATT has tried to reduce the negative impacts of increased bandwidth demand from SmartPhones through increased backhaul capacity from cell sites and deploying thousands of new cell sites.
The first thing to understand is that this increased bandwidth demand is not an abberation. It is an accelerating trend brought on by new devices and new services. A Smartphone, due to increased service usage, utilizes about 15 times more bandwidth than a cell phone. A notebook, again due to increased service utilization, uses about 450 times more bandwidth than a cell phone.
How much will Netbook users utilize? With increased media storage and delivery in the cloud, Software as a Service (SaaS), Cloud computing, device mobility and unified communications is it unreasonable to expect Netbooks to utilize 1000 times as much as a cell phone? 2000 times as much?
The carriers are creating the explosion in traffic themselves. Huge application libraries create amazing blended services that suck up network capacity. And the carriers are selling Netbooks just like cell phones with two year packages and low device prices. Check out ATT's Lenovo S10 offerings for $199.
The second thing to understand is that adding more bandwidth through LTE/4G will not solve the problem. Current networks do not allow the operators to define and control Quality of Service (QOS) to meet specific Service Level Agreements (SLA) that allow the carriers to sell tiered services and maintain customer satisfaction.
Once a cell tower becomes overloaded, all customer sessions suffer equally as data is dumped on the floor. Good customer, bad customer, critical customer. They all suffer the same.
Without a clear way of managing bandwidth to maintain a fair access level for all customers, this problem will not go away. Deep Packet Inpsection (DPI) is not the answer. Flow management is not the answer. Only by managing traffic the way the consumer perceives it, by sessions and services, can the carriers deliver on the promises they are making.
The third thing to understand is that this is not an ATT issue. All of the carriers are pushing the same types of devices, the same types of services and will suffer from the same issues of bandwidth management. ATT is the first to suffer because they were the first to deploy SmartPhones through the Apple iPhone.
Who is next? The increased network demands of existing technologies and services and those that are still to come will impact all carriers.
David Croslin consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
