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It was bound to happen. AT&T is suing Verizon Wireless over its “There’s a Map for That” advertising campaign.
When I first saw the advertisements on TV, I thought for sure that AT&T or Apple would file a lawsuit claiming the advertisement was too similar to the iPhone’s “There’s an App for That” slogan.
I was right about one thing. AT&T is suing Verizon. But I was wrong about the reason behind the suit.
AT&T’s beef isn’t over the wording of the “There’s a Map for That” slogan. Instead the company claims that Verizon is misleading customers into thinking that AT&T subscribers are not able to use their phones in areas where the carrier does not offer 3G wireless coverage.
In the suit that AT&T filed Tuesday in Atlanta federal court, AT&T describes how Verizon’s ad campaign shows maps with white spaces, which it claims misleads consumers into thinking that AT&T has no wireless coverage in particular areas of the country.
But that is not the case. The white spaces actually indicate where AT&T does not have 3G wireless access. It doesn’t indicate that AT&T has no wireless coverage. In fact, in most parts of the country, AT&T has a 2.5G Edge network.
AT&T doesn’t dispute the fact that its 3G wireless service is not in every region of the country indicated on the map. But the company says that the advertisement makes consumers believe that AT&T has no service in those areas, which implies that subscribers can’t use their phones at all in those regions.
“Contrary to the misleading message conveyed by Verizon’s advertisements, AT&T customers can fully use their wireless devices outside of a ‘3G’ coverage area and undisputedly have coverage in areas depicted by the white or blank spaces on the maps used in Verizon’s advertisements,” AT&T said in its complaint.
AT&T also asserts in its complaint that it is “losing incalculable market share, invaluable goodwill that it has spent billions of dollars to develop among consumers, and the significant investment it has made in its wireless network.”
AT&T is not asking Verizon to stop its ad campaign entirely. And it’s not asking its rival to change the wording of its advertising. What AT&T wants is for Verizon to stop showing maps of AT&T’s 3G coverage areas that it claims mislead customers into thinking they can’t use their phones in non-3G areas.
AT&T has asked for a temporary restraining order against Verizon so that it cannot benefit from the ads while the companies await a permanent injunction.
Verizon Wireless, which is owned jointly by Verizon Communications and Vodafone Group, said AT&T’s suit is without merit. The company has said that the ads clearly state that voice and data services are available outside 3G areas.
“The ads are serving to inform customers where the coverage critical to operating a smartphone is available,” said Brenda Raney, a Verizon Wireless spokeswoman. “Considering their limited 3G coverage, our competitor should examine whether they are misleading customers with their fastest 3G network claim.”
Motorola
The hard-hitting advertising campaign and AT&T’s lawsuit are just the latest signs that competition in the U.S. wireless market is reaching a fever pitch. More than 89 percent of Americans already subscribe to a cell phone service, according to the CTIA. This means that for wireless operators to grow, they must lure new subscribers from competitors.
Verizon Wireless and AT&T control the lion’s share of the wireless market as the No.1 and No. 2 operators in the country, respectively. Sprint Nextel and T-Mobile USA are the other two main national carriers. Sprint has steadily been losing customers for several quarters. And T-Mobile has been unsuccessful in becoming a major threat to the big two operators.
As a result, the rivalry between the two largest wireless companies, Verizon and AT&T, is heating up. Verizon has historically had a very good reputation for having a reliable network with broad network coverage. But even with a strong network, the company has lacked cool phones, which consumers have complained about.
Meanwhile, AT&T’s network has had a mediocre reputation at best, but the carrier is the exclusive wireless operator in the U.S. for Apple’s iPhone. And despite the fact that subscribers have been complaining about poor service and spotty coverage on AT&T’s network, new subscribers are still flocking to the carrier to buy the popular iPhone. In the third quarter, AT&Treported it had signed up a net of 2 million subscribers. Verizon signed up 1.2 million new subscribers for the same period.
But now Verizon is about to launch a phone that many analysts believe could give the iPhone a run for its money. The Motorola Droid, which uses Google’s Android operating system, goes on sale Friday. And since the phone was revealed to analysts and product reviewers last week, it’s been getting high marks.
Verizon’s top marketing executive John Stratton said the ad campaign for the new Droid will be the biggest Verizon has ever launched. But he said that the company will focus more on what the Droid can do and less on what other devices or competitors cannot do. One thing is clear, the battle for wireless subscribers is likely to get nastier.
As a consumer, I hope this intense competition eventually leads to better services, cooler devices, and lower prices. But we’ll just have to wait and see. Right now, it just looks like a war of words.
