AT&T has 48 hours to answer iPhone pricing complaints

By , Computerworld |  Personal Tech, AT&T, iPhone

AT&T has 24 to 48 hours to answer the rising tide of complaints from iPhone owners who are furious over its pricing policy for the new iPhone 3G S, a crisis communications expect said today.

"It's time for AT&T to step forward and be an industry leader," said Dallas Lawrence, vice president of digital media at New York-based Levick Strategic Communications. "The next 48 hours will be very telling. AT&T needs to embrace the message, to acknowledge a mistake's been made, and to make things good."

Lawrence was referring to the growing online campaign on Twitter and elsewhere by iPhone owners angry over AT&T's plan to charge an additional $200 to upgrade to the iPhone 3G S if they haven't fulfilled most or all of their two-year contract with the carrier. More than 8,000 people have "signed" a Twitter petition calling on AT&T to sell the new iPhone to current users for the same $199 and $299 prices it charges new subscribers.

The number of names on the Twitter petition has nearly doubled over the last 24 hours.

"AT&T has the opportunity to turn a potential negative into a positive," said Lawrence, who has managed crisis communications for a large number of public and government clients. In 2003, he served as the spokesman for Ambassador L. Paul Bremer and the Coalition Provisional Authority in Iraq in the aftermath of the U.S. invasion.

"They should forget the immediate gratification [of higher revenues] and invest in the longer-term to keep iPhone users," he said.

In his view, AT&T has a very small window to react to the online criticism. "The community will only get angrier and angrier," he said. "If AT&T acts fast, it will make the decision on its own, but past that 24 to 48 hour tipping point, it will look like they've been forced into it."

If AT&T was his client, Lawrence said, he'd urge the company to immediately own up to its error and tell all iPhone owners that they can upgrade to the iPhone 3G S as soon as it's available for $199 or $299.

"And they should say they will do that for every iPhone that Apple launches because they want the iPhone users to be part of the AT&T family for life," said Lawrence. "That would be the type of statement that would be leading -- outside the industry norm -- and would let iPhone users know they can make a commitment to AT&T because AT&T has made a commitment to them."

AT&T's motivation to make such a move, said Lawrence, is self-serving. "Apple may open the iPhone to other networks in the U.S. within the next year," he said, referring to reports that Apple and AT&T are negotiating an extension to the latter's three-year contract as the exclusive carrier for the smartphone in the United States. "AT&T has a limited window to build their brand while they have a captive audience," Lawrence said. "What it doesn't want is to force Apple to make a decision based on this crisis."

Continued complaints by die-hard iPhone fans about AT&T might push Apple to do exactly that. "There are a couple of options before Apple," said Lawrence. "They can speed up the process of opening the iPhone to other networks, or they can make an public announcement to that effect." Either, but especially the latter, would put enormous pressure on AT&T to concede, or face the likelihood that Apple will abandon the carrier and shift the iPhone to a rival, such as Verizon, Sprint or T-Mobile.

"AT&T does not win here if it lets tens of thousands of consumers force Apple's hand," Lawrence added.

Some have argued that even that though thousands have signed the Twitter petition, that's just a drop in the bucket, a very small drop, compared to the total number of iPhone owners. Lawrence disagreed. "Those 8,000 probably represent 50,000 to 60,000 people who are not engaged online," he said. "Even if it's only 8,000 these are the most loyal users and the best potential brand ambassadors you could ask for."

On top of that, AT&T would win an amazing amount of good will by surprising the complainers with a turn-around, Lawrence argued. "These fans have little expectation that AT&T will change," he said. "But AT&T has a chance to turn all this attention around and co-opt them into being brand ambassadors."

But what will AT&T do? Lawrence admitted that clients don't always take his advice. Those firms that successfully handle a crisis generated by online opinion are usually those that exhibit "decisive leadership traits," he said. "Apple has that built in. They're a company that's designed to respond quickly to their customers quickly.

"AT&T would be very wise to take a page out of Apple's book," said Lawrence.

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