I was on vacation in Mexico several weeks ago (we’re fine, thanks), and couldn’t help but notice that the local carrier TelCel was able to deliver robust voice coverage in my hotel room situated halfway between Cancun and Belize - while back home, just across the river from Manhattan, AT&T seems unable to deliver voice coverage in all but one 4-ft. corner of my apartment.

Returning home to NYC and in need of a quick news fix, I tried using the NPR iPhone app on 23rd St. one day.  After one sentence, the data connection dropped.  I tried restarting the app - this time I heard two sentences before the connection dropped again.  I tried once more before giving up, recalling NAB president David Rehr’s recent prediction that 130 million mobile devices will be receiving mobile video by 2012 and wondering what the chances of that really were, given that getting even audio to an iPhone in Manhattan is such a hit-or-miss proposition.

I’ve ranted before (here and here) about my disappointment in AT&T.  Talk to any New York City area iPhone user, and you’re likely to hear similar stories - yet we all seem somehow strangely resigned to it.  Perhaps it’s because we all just love the device itself so much - but if the past weekend’s news that Apple is currently in talks with Verizon isn’t worth another schadenfreude-tinged post on AT&T’s poor network performance, what is?

Several weeks ago, buy.com started selling unlocked yet fully warrantied iPhones, although several factors mitigated any adverse  impact on AT&T’s iPhone business:

• Without any service plan subsidy, the phones cost $799
• The GSM iPhone remains incompatible with Verizon’s competing CDMA network
• CDMA technology is primarily available only in the US and Canada, and as an older technology is likely to be phased out relatively quickly

In contrast, the Verizon news must be seen as a direct threat.  While the leak could also be a negotiating tactic on Apple’s part (assuming AT&T’s exclusive agreement is up for renewal soon),  in any event the prospect of a Verizon-subsidized iPhone surfacing sometime in 2010 that will run on both Verizon’s current CDMA and future LTE networks should make it harder than ever for AT&T to remain in denial about their technical network issues.

I have an intimate relationship with my iPhone, having foolishly attempted and somehow succeeded in replacing a broken glass pane myself a few months ago - but I would gladly retire that phone and leave AT&T for the ability to actually use a CDMA iPhone in my home as, um, a phone.  So, good news for Verizon, for Apple (who I expect will sell a substantial number of new CDMA iPhones to current AT&T customers), and bad news for AT&T.

Surprisingly, though, AT&T’s stock was relatively unaffected Monday, dropping from Friday’s opening price of $25.75 to Monday’s open of $24.98  and later recovering to $25.30.

Why didn’t it drop further?  Perhaps because most New York City financial analysts are likely using the (more enterprise network-friendly) Blackberry, and don’t realize just how poor the New York area AT&T network is!