AT&T Threatens To Fire iPhone Users For Costing Company Too Much Money
11:59 pm, December 15th, 2009, Leander Kahney
Penny and John Alexander claim AT&T is firing them as iPhone users because they are costing the company too much money in roaming charges. The Alexander's home in Alabama isn't directly serviced by an AT&T cell tower.
AT&T is threatening to terminate the accounts of a pair of iPhone users because they’re costing the company too much money.
“AT&T is firing us as iPhone users,” says Penny Alexander, who lives in Dadeville, Alabama, with her husband John.
In late November the Alexanders received a letter from AT&T saying that because they didn’t live in an area directly serviced by AT&T’s network, more than half their calls were being routed through another company’s network. Thanks to roaming charges, the pair are costing AT&T too much money.
“This situation is rare,” the letter said, “but when it happens, our operating costs increase significantly which makes it difficult for us to keep our rates affordable for all other customers.”
The letter offered to help the Alexanders transfer to another carrier or cancel their account without charging them early termination fees. If they don’t take either of these options, AT&T says it will cut off roaming after January 4. “This means in areas not directly served by an AT&T-owned wireless network you will not be able to make or receive calls,” the letter said.
Penny Alexander says she and her husband are effectively being terminated. They will be unable to use their iPhones at home, but will still be expected to pay $140 in monthly service charges.
“Why didn’t they tell us this when we signed up, before we invested time and money in all the software and devices?” she says.
AT&T spokesman Seth Bloom says the company is not “firing” the Alexanders. Their account will not be terminated, but they will be restricted from roaming on another company’s network.
“More than half of the wireless voice usage on one of their lines has been in an area not directly served by AT&T for several months in a row,” said Bloom in an email. “What we’ve said to them is that we will be roam-restricting that line to work in-network only. We will not terminate their service.”
Bloom notes that AT&T’s national plans stipulate that customers must live inside an AT&T-owned wireless coverage area to curb excessive off-net or roaming fees. The situation is extremely rare, Bloom said. “It is not an issue for more than 99.9 percent of our customers.”
Penny Alexander has been an iPhone user since the summer while her husband has owned an iPhone since the device was launched in July, 2007. The pair have not moved to a new house since owning their iPhones.
“If AT&T took us a customer they should have to keep us as iPhone users,” she says. “We are both just really sick over the prospect of having to lose our iPhones.”
Alexander says her husband has contacted both AT&T and Apple, to no avail. She says the Apple representative was flabbergasted at the situation.
Apple customer cervice “was in disbelief of what they were hearing,” she says. AT&T offered to reimburse the cost of her iPhone but not her husband’s older model.
Alexander says she knows of two other locals who have also been roam-restricted by AT&T. One got mad and left for T-Mobile, while the other has since resigned with AT&T, she says. They don’t want to reveal their identity in case they get terminated again.
At the very least, Alexander said AT&T should unlock their iPhones and allow them to take the devices to another carrier.
“If they don’t want our business then there should be some agreement that we can take our accounts and our iPhones to another carrier who is capable of servicing the area we live in,” she says. “This is just not fair to the consumer.”
Posted by Leander Kahney in News, Top stories, iPhone | Comment on this article
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I wonder how long it will be before AT&T hate actually shows up in their financials?
JAYnLA, on December 16th, 2009 at 12:06 am
They should wait until their contract is up and then “fire” them.
Jared, on December 16th, 2009 at 12:11 am
Suck it up ATT. Maybe you can use some of the TWO BILLION in profit on data charges alone from the iPod over the next tow years to build up your network and cover more of your customers. Maybe then the other telcos wouldn’t be able to drag your sorry illegal spying-ass all through the mud for having such lousy coverage.
Hondo, on December 16th, 2009 at 12:27 am
This happened to me and few others living in SD where there is no ATT service….
Rory, on December 16th, 2009 at 12:29 am
Thats crazy! If AT&T made a contract with the couple for phone service they should honor it.
Instead of making bad PR moves maybe AT&T should try investing in their network, improving it for its customers.
Joshua Zimmerman, on December 16th, 2009 at 1:04 am
I don’t care. This is a non-story.
jon1, on December 16th, 2009 at 1:14 am
I wouldn’t be happy with this situation. What about a micro cell?
Cyxodus, on December 16th, 2009 at 1:20 am
Typical corporate weasels. Another good reason phone companies shouldn’t be able to restrict users or lock them into 2 year contracts. The whole industry should be open to use any carrier you want and leave when you want just like every other industry has to operate under.
And before some whiner like “jon1″ says “But that’s how they provide phones otherwise it would cost $600 for an iPhone.” go read this article and understand the reality that is corporate greed.
http://tinyurl.com/corptechgreed
Vonster, on December 16th, 2009 at 1:30 am
We get a raw deal from all service providers, be it phone or broadband, they are quick to take your money when you sign up, but usually offer a poor service there after.
Don’t give into AT&T threats, keep using phones.
Poppa, on December 16th, 2009 at 1:34 am
AT&T needs to be called out on this BS.
First of all, the customer does not know that they are roaming because AT&T hides the real identity of their roaming partners by slapping the alpha tag: AT&T on the customer’s display.
Other GSM carriers clearly tell you if you are roaming by listing the roaming carrier’s name (IE: T-Mobile, Vodafone) on the phone’s display or by showing a roaming indicator like a solid triangle.
Some carriers will even let the customers know via an automated greeting that they are roaming when they place a call.
AT&T’s network is weak and they don’t want customers to know that they are using another competing network to place or receive calls. That’s why they hide the alpha tag.
AT&T should be forced to display the true identity of the roaming partner or unlock the iPhones as a courtesy so at least the couple could use them on T-Mobile even if only for EDGE data.
Danny, on December 16th, 2009 at 1:36 am
“Affordable to others”? Really? How is your service affordable? Please AT&T explain to me that…
Chacha, on December 16th, 2009 at 2:43 am
“offered to help the Alexanders transfer to another carrier or cancel their account without charging them early termination fees.”
I fail to see what the problem is, surely if they’re allowed to leave the AT&T contract free of charge they can unlock their iPhones and use another carrier, there are data packages out there
unfold, on December 16th, 2009 at 3:55 am
The same thing happened to me. I was happy to be able to get out of my contract with no early termination fee. I unlocked my 2 phones and am now using them on Cellular One but that is a big hassle and I don’t get to fully use all of the features of my phones.
Ed, on December 16th, 2009 at 5:16 am
Wow, I can’t believe people are making a fuss about this. The people are not within the terms of the contract they signed, so AT&T is changing their service, which is entirely within their right. Why is this such a big deal?
These people try to make themselves sound like such victims. “Firing”? That word is just ridiculous in this context and conspicuously sensationalist, as is the first paragraph of this story, which contradicts everything else that is written. It’s very clear that AT&T is not “threatening” to terminate the accounts; that is merely one of several options the couple can choose to take.
@Joshua Zimmerman Yes, AT&T did make a contract with them, stating that if the majority of their usage occurs in roaming areas, then it is within AT&T’s right to cancel service. It’s in the contracts; the couple should have read before signing.
Andrew, on December 16th, 2009 at 6:05 am
AT&T really doesn’t want to fix their image do they?
kevin, on December 16th, 2009 at 7:33 am
“If AT&T took us a customer they should have to keep us as iPhone users,” she says. ”
I agree. ATT should have detected whether their address was kosher at the time of sale. To restrict service in the middle of the contract is unfair.
iGenius, on December 16th, 2009 at 7:56 am
So, to get the situation straight:
Guy purchases iPhone, later purchases one for his wife. At this time they both live in a covered area.
The couple moves, and now lives in a non-covered area. As such, they’re building up roaming charges while using their AT&T phones.
AT&T doesn’t like this, wants to dump them, is willing to let them out of the contract at no charge and reimburse them for the newer of the two phones. (This is remarkably good, for AT&T, actually…)
AT&T also gives them an ultimatum to accept the deal, otherwise they’ll cut off roaming, effectively leaving their iPhones useless in their current location. (This is the shitty part, regardless of whether it’s in the contract fine-print)
The couple (rightly) sees this as being awfully shitty. They purchased the phones they wanted, and have likely invested quite a bit of money in applications for the phone (I know I’ve spent a surprising amount over the past few years on mine). AT&T won’t unlock the phones so they can use them on a different provider, nor will they reimburse the money spent on apps or the first phone. Additionally, once “cut off” they’ll still be charged full price for the service, regardless of their inability to use it.
So, after taking the “deal”, the couple will have two hobbled bricks, no service whatsoever, and be out-of-pocket for a second phone, on a different carrier.
If AT&T would simply unlock the phones, this would be moot, IMHO. The couple could go get a contract at a provider willing to service them, and be done with it.
While AT&T may be well within their rights, and while the offer they provided is somewhat good (again, unlocking the phones would make it perfectly fine IMHO), the ultimatum they’ve given is shitty, and they need to be called out on it.
Had they invested the record profit they’ve pulled in from the carzy success the iPhone has seen in upgrading and expanding their network to handle the additional load, this very likely wouldn’t have happened. But AT&T hasn’t done that. They release a smartphone capable of using high-bandwidth services, promote the use of those services, then turn around and blame their own customers for using them. Hint, AT&T: Your customers aren’t your enemies.
Apple sure as heck is taking notice of all the problems AT&T is causing for their customers, and it would be naive to think they won’t be looking at other options. For the iPhone to be the *best* phone out there, it needs a network that can handle the demands of high-bandwidth applications. Let’s face it, AT&T has proven they *can’t*, and further *won’t* do anything about it. They’d rather blame the customer for using their phone, rather than realize the iPhone (and the new generation of smartphones it has inspired) has changed the way people use phones. They’d rather stagnate than adapt, and that’s what will be their downfall, in the end.
Yukeake, on December 16th, 2009 at 8:49 am
psst… psst… Verizon…
Feature this couple in your next commercial… “there’s a map for them”
Cory, on December 16th, 2009 at 9:23 am
This exact same thing happened to me, as well (I’m in southern MN). I decided to go the route of canceling my account early with no early termination fee.
Needless to say, I don’t miss AT&T one bit.
“ATT should have detected whether their address was kosher at the time of sale. To restrict service in the middle of the contract is unfair.”
You nailed it right on the head, iGenius.
Because of what happened and how AT&T handled this, I’ll never do business with them EVER again. I tell everyone who will listen to NEVER do business with AT&T – if you want an iPhone, either jailbreak it and use it on T-Mobile or wait until the phone is open to use on other carriers. Don’t give this crappy company ANY of your hard-earned money!
Jim, on December 16th, 2009 at 10:08 am
@Yukeake: They never moved. The article says they’ve been in the same house the whole time.
Sal C, on December 16th, 2009 at 1:43 pm
This isn’t really news.
Tmobile did the same thing to me 2 years after I moved to NH, even after they’d renewed my contract once after I’d relocated. Apparently they reevaluated their coverage in the area and decided to drop people like me who were perpetual roamers. Had to switch to AT&T.
Tmobile even charged me a $200 termination fee when I did switch according to their instructions. It was a total mistake on their end, but since I was no longer a customer it was practically impossible to get through to their cust. service to discuss it. I ended up having to dispute the charge via my bank (they charged my debit card) in order to get the funds back.
I’d still go back to Tmobile in a heartbeat (that mistaken fee was my only real complaint with them), and I hate AT&T… but this article makes it sound like AT&T is the only company that drops people, which ain’t true.
All cell phone providers charge users penalties for early termination but reserve the right to cancel contracts early themselves. It ain’t right, but it’s how it’s done.
Scott, on December 16th, 2009 at 1:59 pm
I mean dont get mad.. you just live in the damn country… LOL!! get ya ass outta the damn country and you’ll be fine…
Hillbilly brother and sister pissed off
JayRizzie, on December 16th, 2009 at 2:21 pm
This would make a great commercial for Verizon. I had thought I would go to AT&T when our contract is up with our provider but if I go anywhere now it will be Verizon.
Way to go AT&T. Wonder how many customers or potential customers you will lose over this one!!!
A.R. Martin, on December 16th, 2009 at 7:17 pm
The exact same thing happened to a friend of mine in Utah. She switched to Verizon and has been very happy with them, but she misses her iphone.
sean, on December 17th, 2009 at 12:49 am
Give them an AT&T microcell for their home. It should help reduce their traffic and make them more affordable for AT&T
Proto732, on December 17th, 2009 at 12:54 am
I used to work for AT&T customer support and have seen this on a few occasions. AT&T puts a little label on their account that is called “EON” which stands for Excessive Off Network. It basically means that the customers are roaming a lot. I hardly ever saw this type of account but when I did it was incredibly obvious AT&T was losing money.
What I want to know is why can’t we terminate a contract if AT&T is making us lose more money than we had expected in the first place? Isn’t this practice just a tad bit unfair? Rope people into a contract and then charge them an arm and a leg to cancel, but when they start costing the company money toss them aside like yesterday’s newspaper? We all know that AT&T charges way too much for the service they provide. Its just wrong. /facepalm
Mark, on December 17th, 2009 at 1:06 am
+1 on that for me too. i manage our work phones and i received a call because we have execs that travel around the country. some of the areas don’t have at&t coverage (and we’re talking a few hours out of milwaukee, and a few hours out of st louis mainly). anyway – the call to tell me they have their eye on our account. big bro at&t is watching…
andy, on December 17th, 2009 at 6:50 am
this ain’t new to ATT. all the carriers put such ‘rules’ in the contracts. ATT is getting the press because of the iphone, plain and simply.
Assuming there’s no legalities to stop them, ATT is within their rights to cut out of network but if they are going to do it then they should do it across the board. this picking on some folks and not others is wrong.
yes they better not think of charging an ETF if they basically force someone to leave via lack of coverage. especially when they were probably charging them more to offset the roaming (even if only a fraction of the true costs)
or even if they had to downgrade the folks to Edge only (with appropriate lower data charges)
Apple can’t do anything because they don’t control the carrier side of things. Except perhaps if the newer phone was less than 2-3 months old they could agree to let the couple return it
this kind of thing is part of why I think that Apple’s next move will be to unlock the iphone, not to saddle it to another company. clearly there are others that can technically handle the phone or ATT couldn’t have roaming for folks like this. so unlock it and let anyone that can handle the phone the way they designed it have at it. they could perhaps go back to the ‘plug it into itunes’ style home activation with problems being directed to the carrier for the majors. tons of negative PR would no longer have Apple’s name on it. so double win
i’m not often one for ‘campaigns’ but I would get behind an ‘Unlock in 2010′ one. For all the various ATT is acting like Schmucks, ATT can’t actually handle the load (but shifting part of it to T-Mobile and the locals might help) etc. I don’t care about a Verizon phone and don’t see it happening, but unlocking could if the contract is ending.
Charli, on December 17th, 2009 at 10:47 am
I bought a iphone, unlocked and jailbroke it myself and went straight to tmobile.
No friggin way I would ever use AT&T or Verizon.
Both are crooks! And not to ever be trusted!
Tmobile is awesome I am in the middle of my 3rd 2 year contract.
Just google up iphone unloking. You will find the software you will need for free and it only takes about 5 min. And you will be free.
Joel, on December 17th, 2009 at 6:08 pm
Let’s get this straight, does AT&T ever know what it’s doing?
- Offer service to a customer, well unless it costs more than they expected then revoke, or make unusable, implying it’s the customer’s fault, not AT&T’s
- Offer an unlimited data plan, that their network can’t support, and when service suffers, it’s the customer’s fault, not AT&T’s
AT&T’s spread too thin across the board with one exception: POTS, good ol residential telephone service.
tyromind, on December 18th, 2009 at 12:29 am
I think that every iPhone or even regular cell phone user of AT&T should find a lawyer and file a class action suit not only against AT&T but the FCC for not listening to OR heeding the complaints against their terrible coverage / service. I live in the San Gabriel Valley – just east of Los Angeles and we have the worst coverage that you can ever imagine. I even wrote the CEO of AT&T and some flunky called stating “We don’t guarantee great coverage everywhere,” she primly noted. I invited her to watch her own company’s ads on TV. Yes, my phone can receive 3G service but its so bad the my EDGE network is often better than my wife who leaves her iPhone on 3G. It is time for the users to strike back and unfortunately that is often in the courtroom.
Alan Krug, on December 18th, 2009 at 3:02 pm
They are not firing iphone users. The iphone is not the only device that uses tons of data. It would be the same if it were any other PDA(blackjack, blackberry,Palm, HP, HTC or whatever). All of the mobile carriers have roaming agreements with each other in case there is no coverage by their company in a specific area. For all of the stupid idiots out there who do not use an logic, why would any company pay to give you service. Some people are just to stupid to understand that. There is no telling what other stuff they are ignorant about. Everyone needs to do all of there research before making stupid conclusions! It cost millions to but up a tower. Im sure some idiot is saying the similar things about sprint, verizon, tmobile,cricket. If you are that upset about it cancel your service, you wont get penalized because you have no coverage or move to an Att service area.
PS: Read you terms of agreement/terms of use before getting upset.
Felton, on December 19th, 2009 at 1:32 pm
They are not firing iphone users. The iphone is not the only device that uses tons of data. It would be the same if it were any other PDA(blackjack, blackberry,Palm, HP, HTC or whatever). All of the mobile carriers have roaming agreements with each other in case there is no coverage by their company in a specific area. For all of the stupid idiots out there who do not use an logic, why would any company pay to give you service. Some people are just to stupid to understand that. There is no telling what other stuff they are ignorant about. Everyone needs to do all of their research before making stupid conclusions! It cost millions to put up a tower. I’m sure some idiot is saying the similar things about sprint, verizon, tmobile,cricket. If you are that upset about it cancel your service, you wont get penalized because you have no coverage or move to an Att service area.
Felton, on December 19th, 2009 at 1:35 pm
For the people above who commented on contracts. They make their money buy contracts. Research subsidiaries if you don’t understand.
If you have a non pda and you use your phone in a non covered area you will also be fired from att.
Felton, on December 19th, 2009 at 1:40 pm