Although AT&T leaders have responded with bravado to questions of how Verizon might upset the carrier’s exclusive iPhone apple cart, Wall Street apparently isn’t so care-free. AT&T could lose up to 40 percent of iPhone subscribers when Verizon starts selling the handset, one analyst warned Monday.
Up to 6 million of AT&T’s 15 million iPhone customers could leave for Verizon, Davenport & Co. analyst F. Drake Johnstone told investors. Attempts to bar the door – such as hiking the early termination fee for smart phone owners from $175 to $325 – is the first signal “AT&T is clearly worried that it will lose customers once a competing carrier such as Verizon begins carrying the iPhone,” Johnstone said.
A Monday Morgan Stanley/Alphawise survey revealed 16.8 percent of Verizon customers were “very likely” to purchase an iPhone, if the handset became available for the carrier. That could be just months away. The carrier could receive the nod to sell iPhones as early as September, according to a recent report.
Despite AT&T’s whistling past the graveyard talk of iPhone owners remaining due to difficulty switching carriers, Wall Street isn’t that care-free. The analyst reduced his expected 2011 AT&T subscriber growth by a third, from 6 million to 2 million. Johnstone said those new subscribers will likely be from e-readers, like the iPad, rather than smart phones with revenue-rich data plans. But perhaps most troubling for AT&T, the analyst cut AT&T’s rating from “Buy” to “Neutral.”
[via Barron’s]
