Why AT&T Customers Can't Switch Carriers

AT&T's CEO (Randall Stephenson) implied in a CNBC interview that "80% of iPhone can't leave even if they wanted to".   What stephenson should have said in the interview as, "AT&T is doing everything it can to improve its network and its customer service to ensure our customers stay.  Here are some areas we have shown improvement and we are confident that our customers will stay."   Over the last 10 years most of the AT&T executives I have met have this same mentalltiy aside from a few internal management supporters of DeadCellZones.com.

Why can't more than 60 million customers switch carriers?  Because most of AT&T's customers are either in family plans or have business relationships with the carrier.  Business customers tend to be trapped as long as they stay with the same employer who is paying for their service plan.  Switching family plans get get very expensive if you have to buy additional phones. High switching costs due to early termination penalties is an additional reason why most people don't leave.  Phone contracts typically last 2 years and the the average person keeps their phone for only about 18 months.  

As soon as the phone unlocking / jailbreaking trend continues to get mainstream we are going to see lots of disruption in the service switching space.  Carriers are losing control of their customers and as more customers unlock their phones and discover that WiFi is free and VoIP works on it.  Defections are only going to get worse.  Google and Android Phones are likely going to be the drivers of this trend.

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