As AT&T launches its own iPhone 3G campaign it feeds off Steve Jobs' slogan when he introduced it a few weeks ago: "Twice as fast. Half the price."
But applied to the AT&T network and cost, the tag line is not really accurate. By a long shot.
Take the speed factor. As I drove through New York State with my son last week I was shocked to see on my AT&T 3G Tilt how little of that state had 3G coverage (AT&T lists 8 areas which do - Albany, Buffalo, Ithaca, Hamptons, New York, Rochester, Syracuse, Watertown. We were in 5 of those areas and can report portions of them did have 3G), and how much of the state did not even have Edge coverage.
And NY is one of the more affluent, broadly dispersed states there is. What about Nevada or Alabama?
Then take the cost factor. As AT&T clarifies its pricing for the iPhone 3G, it is now becoming clearer its TCO will actually increase from the first generation.
I had done TCO calculation for 4 iPhone user scenarios in this note last year. The TCO over 5 years varied from $ 7,500 to $ 17,000.
While the 3G device itself would be cheaper (if you qualify), the domestic data plan is $ 10 a month more (so about $ 650 more after taxes over 5 years). For business users the data plan is $ 25 a month more (so about $ 1,950 more over 5 years). Texting is additional - and if you get unlimited texting, add another $ 1,300 more over 5 years.
With the speedier 3G network, you could potentially do without the hotspot coverage I had included in the TCO for the first generation phone. But while I occasionally use the Tilt as a modem when I don't want to pay for hotspot charges, you cannot do that with iPhone. So many customers may need to continue to pay for that charge if they need to additionally download larger files on their laptop.
Where AT&T has not budged is in its international roaming charges for voice or data. In fact its 20MG, international roaming plan has gone up another $ 5 a month, or another $ 325 over the 5 year horizon. (Update: My TCO calculations had assumed a conservative $ 100 an international trip in voice roaming charges. Harris reports it as closer to $ 700 per such trip)
Finally, my TCO scenario 4 was for a European iPhone user. Expressed in a since-further-depreciated US dollar, that TCO will now easily be over $ 20,000 over 5 years if the local telcos follow AT&T's pricing lead.
AT&T better add a number more disclaimers to the asterisk to their tag line of "Twice as fast. Half the price."
And what they told the New York Times does not exactly qualify as a disclaimer:
"We can also offer simple tips on how to minimize unexpected charges, including turning off data roaming when you are outside the United States, if that is what you would like to do."
