Verizon Fortifies Data Networks. iPhone on Tap?

It’s no secret that iPhone users are seriously unhappy with AT&T’s network performance. Even Apple itself ridiculed AT&T publicly at the launch of the iPhone 3GS last summer. Well, they may not have too long to wait for another option if recent reports are true. There’s been growing speculation in analyst research notes and news articles discussing Apple taking the iPhone to Verizon Wireless.

The latest comes from Bloomberg BusinessWeek, which ran an article under the headline “Verizon Wireless Prepares for the iPhone” although it should be noted Verizon never once said it had any deal in place in the article.

Verizon Wireless Chief Technology Officer Anthony Melone told the BW reporter the company has made upgrades that would make its network more capable of handling extra traffic that would be generated by the iPhone, but at the same time did not address the iPhone by name.

“We have put things in place already,” Melone tells Bloomberg BusinessWeek. “We are prepared to support that traffic.”

When asked if his company’s equipment would do a better job catering to the heavy data demands of iPhone customers, which has been the main beef iPhone users have with AT&T, Melone said “Absolutely, I think we could handle it.”

Apple’s exclusive agreement with AT&T comes up for renewal in mid-2010 and iPhone users’ loyalty is to the phone, not the network. They have been very loud in their complaints about the quality of AT&T’s network, in particular the data network and 3G coverage.

Battle of the carrier ads

Verizon has been listening and running a series of ads ridiculing AT&T’s coverage. AT&T took the case to court and was essentially told to get over it by the judge. A short while later both companies dropped their respective lawsuits related to the case.

Meanwhile, the ads have continued unabated and Ralph de la Vega, CEO of AT&T Mobility, admitted at an investor conference earlier this month that the New York and San Francisco markets “are performing at levels below our standards,” and “This is going to get fixed.”

At the same time, he also said AT&T was considering “incentives” for some subscribers to “reduce or modify their usage” of bandwidth. He said that just three percent of the iPhone population consumes 40 percent of its bandwidth and AT&T would address them and not the 97 percent with more regular consumption rates.

Apple is rumored to be in the testing stages for the next generation of iPhones around the San Francisco area. The company has remained silent on the issue of Verizon or future phone plans.

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