Verizon vs. AT&T: Which Can Feed iPhone’s Need for Speed?

With the Verizon iPhone 4 finally on deck for release next month, all eyes are shifting to Verizon’s network. Will Verizon be able to handle the spike in iPhone data traffic better than AT&T has?

To be clear, this isn’t a question about which is faster, Verizon’s CDMA or AT&T’s GSM network—theoretically speaking, AT&T’s GSM network is probably faster. The reality is that the iPhone spurs massive data usage that can cause gridlock in networks regardless of their underlying technology standard.

As the exclusive iPhone carrier in the United States, AT&T has had to pour billions of dollars to shore up its network. AT&T was the first to be caught off guard with smartphone data demand, as iPhones swamped its network. With Android phones and the popularity of mobile video uploads following in the iPhone’s footsteps, AT&T struggles to get ahead of the data consumption curve.

Hence, customers continue to heap criticism on AT&T’s shoddy service.

Undaunted, AT&T says Verizon will feel the weight of the iPhone 4 soon enough. “For iPhone users who want the fastest speeds, the ability to talk and use apps at the same time, and unsurpassed global coverage, the only choice is AT&T,” AT&T stated in an email to AllThingsD.

But Verizon has had the advantage of learning from AT&T’s troubles. Bracing for Android and now iPhone data traffic, Verizon says it has been investing $5.7 billion every year on average to increase the coverage and capacity of its wireless network. Verizon has made network quality a hallmark of its brand and highlights this advantage in its snarky advertisements.

“My gut feeling is that Verizon is tremendously well prepared for this,” says Kyle Wiens, CEO of iFixit, a website that provides free repair manuals and advice forums mostly aimed at Apple products. “They have everything to lose if their network crumbles under the new load.”

Today, Verizon’s network handles millions of Android smartphones. It’s an amazing feat considering that Android smartphones are outselling iPhones, and that reports show Android owners on average use up to 30 percent more data than iPhone owners.

“Verizon has experience handling a ton of data traveling over its network,” says Aaron Vronko, CEO of Rapid Repair, an iPod and iPhone repair shop. “Verizon will be able to handle the iPhone no problem, at least initially. Verizon iPhones will look a little faster, and that won’t make AT&T look good.”

Verizon also lets Android smartphones become hotspots for other devices such as laptops and iPads, which leads to even more data usage. In fact, the biggest new feature of the Verizon iPhone 4 is its hotspots app. “Verizon bringing hotspots to the iPhone shows me that Verizon is feeling pretty cocky,” Wiens says.

But iPhones may eventually take their toll on Verizon’s network. The iPhone 4 will reach 93 million Verizon customers, many of whom have been anxiously waiting for a Verizon iPhone for more than a year. New customers will be drawn to Verizon because of the iPhone. AT&T iPhone owners fed up with AT&T’s service may defect to Verizon en masse.

All of this means Verizon will have to support lots of iPhones in the near future. “iPhone users pull a lot of data, mostly for video, and even without this [hotspot] feature they are likely to stress Verizon’s network,” says technology analyst Rob Enderle. “In about 60 days, we should start seeing problems with Verizon’s network, if it can’t handle the load.”

Both Enderle and Vronko agree that questions about the Verizon network’s ability to handle the iPhone should be answered some 60 days after the Verizon iPhone 4 is released on February 10. But this presents a problem for potential Verizon iPhone customers who want to wait and see how the Verizon network performs under the iPhone load.

“Sixty days after that, the iPhone 5 should launch, and it’s expected to be a 4G phone,” Enderle says. “This suggests it might be best for most to wait until the iPhone 5 ships to make sure they wouldn’t rather have that phone.”

Smartphones running on 4G networks, of course, are much faster. Waiting a couple months after the Verizon iPhone 4 launches might not be a bad idea, Vronko says. By then, leaks about iPhone 4G chip shipments will give people a better ideas whether or not the iPhone 5 will be 4G.

For people who don’t want to wait, there is a silver lining, says Vronko. If Verizon iPhone 4 owners run into network problems, an iPhone 5 4G can alleviate some of the pressure on the 3G network. “An iPhone 5 with 4G will be a long upgrade,” says Vronko. “With people migrating to 4G, it’ll make 3G congestion a lot better.”

Tom Kaneshige covers Apple and Networking for CIO.com. Follow Tom on Twitter @kaneshige. Follow everything from CIO.com on Twitter @CIOonline. Email Tom at tkaneshige@cio.com.