Can Verizon's network handle all the new iPhone users?

An Apple Inc. employee holds up the new iPhone 4

TEXT OF INTERVIEW

KAI RYSSDAL: After years of speculation -- and a firm AT&T monopoly -- Verizon's expected to unveil its own version of Apple's iPhone sometime tomorrow. We've called John Moe to talk things over. He's the host of the Marketplace Tech Report. John, good to have you with us.

JOHN MOE: Hey Kai.

RYSSDAL: So I'll tell you, there was no small cheer that went up around the conference table this morning when we started talking about this story. And we'll get to the joys of Verizon having an iPhone in a minute. But what does this mean for AT&T?

MOE: It's a sense of foreboding, Kai, I think is what's happening with AT&T. They've got a lot of people locked up already to those two-year contracts. When the iPhone 4 came out last summer and there was all those mobs of people waiting to buy them -- AT&T sees those mobs as just all these wonderful, two-year contracts just sitting out there. So they have that revenue to depend on. They've also locked in the Windows Phone Sub and lots of Blackberries and Androids around AT&t, so they've bought themselves a little bit of time -- a good year-and-a-half, a couple years maybe -- to kind of turn things around either in terms of the quality of their network or the perception that their network is really lousy. So right now they're on the clock basically.

RYSSDAL: And there's the rub, right John, because AT&T has been hammered for having this slow data network and now Verizon is presumably going to better?

MOE: Verizon says they're going to better. They've been talking the talk for a while now that when this happens, they'll be ready to go, that they can withstand the traffic. And they have a point. They've been handling lots of Android traffic. They've had the iPad for a few months now and things are evidently going OK. But what's going to happen is when the Verizon iPhone really takes off, we're going to find out who the winner is. If it starts to crash, if it starts to tumble, then Verizon is in some trouble and AT&T looks not so bad.

RYSSDAL: There are rumors about Verizon offering an unlimited data plan in contrast to AT&T that's got these tiered things. Is that what you're hearing?

MOE: That's what I'm hearing. Yeah, that's what I'm seeing a lot of places. The idea is that it would be $30/month data plan, which is a little bit more expensive than the basic, lower tier of the AT&T tiered data plan. I also think as a promotional offer, as a get-you-in-the-door offer, it's a pretty shrewd bit of marketing because it's that sort of a cocky, Verizon's way of saying, 'Oh yeah, traffic? We can handle traffic. Don't worry about us and traffic. We'll give you all that you need for $30/month.'

RYSSDAL: What if you are Sprint and T-Mobile today? Are you just sitting there saying 'Drats, they got away.'

MOE: I've got to think so. Yeah. If you're Sprint or T-Mobile, you're not going to have the iPhone. And a lot of people have said 'Once Verizon gets the iPhone, that's the phone I really want.' So all of a sudden, if you're one of the other carriers, then you're one of the other carriers. And you don't have the big status symbol. And you don't have all the revenue to build up your signal and build up your infrastructure that comes with those contracts.

RYSSDAL: John Moe. He's the host of the Marketplace Tech Report. John, thanks a lot.

MOE: Thanks, Kai.

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