Verizon Wireless is using commercials to take shots at rival AT&T's 3G network coverage, which has been the source of complaints from smartphone users for some time. AT&T has fired back with a lawsuit claiming Verizon's ads are misleading.
AT&T filed its complaint in U.S. District Court in Atlanta, asking a judge for a restraining order to stop Verizon from airing the controversial ads. The ads feature a Verizon smartphone user with access in most places throughout the U.S. as shown on a map of nationwide coverage.
The alleged misleading part of the commercial is when an AT&T smartphone user fails to get 3G coverage and shows a U.S. map with very little coverage and an "AT&T 3G" label below the map. AT&T said the ad is misleading because it shows areas without coverage where AT&T clearly has network coverage.
A Clear Message
Verizon says the lawsuit is without merit.
"Ads are very straightforward -- maps are clearly labeled 3G coverage, and clearly state 'voice and data service available outside 3G coverage area,'" Verizon's Nancy Stark said. "With more and more people buying 3G smartphones, PDAs and embedded laptops, our ads serve to inform customers where their 3G smartphone apps will work."
Analysts see Verizon's ads as clever.
"It does seem pretty clear that Verizon is referring to 3G coverage in their ads," said Michael Gartenberg, a vice president at Interpret. "In an age where many customers' data is as important or more important than voice, Verizon Wireless' 'there's a map for that' seems a very effective message."
Verizon and AT&T have been in a tug of war for customers since AT&T became the exclusive wireless carrier for Apple's iPhone. AT&T took some of Verizon's market share after the iPhone launch.
From June through August 2008, 30 percent of U.S. customers who bought Apple's iPhone switched to AT&T, dumping their existing carriers, according to the NPD Group. Nearly half of those customers came from Verizon.
Losing Market Share
While a bruised Verizon lost some subscribers, it has clearly come back with a vengeance.
Before releasing its maps commercial attacking AT&T's coverage, Verizon released a commercial pointing out some iPhone flaws. Those ads promoted Verizon's new Android-based DROID phone and swiped at Apple and AT&T by referring to the iPhone as the "iDon't" phone.
Analysts said the "iDon't" commercials would not affect Apple's sales of iPhones and would not hurt AT&T, either. In fact, AT&T had its biggest third-quarter jump, with 1.4 million customers signing up. But sales fell 1.6 percent to $30.9 billion in the third quarter.
Analysts say Verizon's "there's a map for that" commercial has magnified consumers' focus on AT&T's sometimes-choppy 3G network. That may continue to hurt AT&T's sales in the future.
"This type of public response from AT&T shows that they are concerned about the perception of their network and 3G coverage," Gartenberg said.