iPhone 3GS on iOS 4 with AT&T unlimited data plan, experiencing loss of data?

iOS 4 device compatibility

Just heard from one of the folks we know who updated his iPhone 3GS to iOS 4 yesterday only to lose his AT&T data connection completely. Today, when he could no longer even place calls, he contacted AT&T who, after several escalations, informed him there are isolated incidents of iPhone 3GS on iOS 4 with unlimited data plans no longer being able to connect to the network.

They told him they're working with Apple to fix it, and put him name on a contact list so they could let him know when it was resolved.

Our question is -- how isolated is isolated? How's your AT&T unlimited data post iOS 4 update?

Rene Ritchie

Editor-in-Chief of iMore, co-host of Iterate, Debug, Review, The TV Show, Vector, ZEN & TECH, and MacBreak Weekly podcasts. Cook, grappler, photon wrangler. Follow him on Twitter and Google+.

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There are 124 comments. Add yours.

Wsaund says:

I had this same exact problem today. I just retored my Iphone 3Gs and set it up as a new phone in the restore process and it is now working.

Brian says:

I ran into the same problem with my 3gs. You have to do a complete restore and set up your phone as a new one. That worked for me.

Dernell says:

I had the same problem yesterday for about 5 r 6hrs. in Louisiana & apple nor AT&T knew how to correct the issue. Somehow the data service miraculously began working.

Scott says:

I have the same problem - no data for me. Stopped by the Apple store and they suggested a restore. Have to wait to I go home to see if it works. My fingers are crossed.

Steven says:

They put his name on a list to let him know when it is working? $10 says he is checking it every minute and will know when it is fixed before AT&T does.

gharlow says:

This isn't that isolated and actually started happening Sunday before iOS4 rolled out. I believe they were working on the system. I couldn't make or receive calls all day and the 3gs was cycling between No Service, Searching, donut hole, Edge and no bars. Never got 3G in areas I almost always have it. Then, Monday mid day everything was back to normal. I stopped in at the smart Wireless store and they said they'd been getting calls all day. Essentially no one on AT&T could talk here in Newport, OR (or this region) all day Sunday.

dubbdee says:

After the update, I can connect but 3G is very slow and at times stops. EDGE is more reliable. This after they seemed to get the 3G network working more smoothly in my area.

Garz says:

This is happening to many people who Jailbroke with Spirit and did not restore first including myself. A restore fixed it.

Boe says:

I've had most or all of these symptoms over the past day. Still not convinced my data is flowing as fast as it used to. Good thing the iPhone 4 is arriving tomorrow.

Michael says:

Happened to me as well. I have a 3gs and was also jailbroken on 3.1.3. Upgraded to 4.0 and it showed I was on 3g but could not access data. Doing a restore right now so I will see if it fixes it.

jailbreakman says:

What I would like to know is if he has no more cell service then why would they put him on a contact list unless it is just an email contact list.

Rob says:

This happend to all of my friends who tried to update while the phone was jailbroken. A restore as a new phone corrects the problem.

Yoni says:

I had my 3Gs swapped out by Apple today. The phone kept dropping the 3G network. The Genius bar seemed to think there was some bad part of the upgrade that affected the modem firmware...

iquinn says:

No issues for me, 3G working just fine.

Crunch says:

Funny. When I saw the headline, I thought "Guess you're not the only one after all".
The issues described above are exactly what I have been experiencing since upgrading to iOS4 yesterday morning, Pacific Time (L.A. market). The problem remains today, and I have not called AT&T to try to have it fixed. I have a late model 3GS on the AT&T unlimited plan. WiFi works fine. I was Jailbroken, by the way, and did not remove all of the software packages. I wonder if that has anything to do with it.

mikechek says:

Ditto. 3GS previously jailbroke on 3.1.3. Upgraded last night and didn't realize until I was at work this morning. No cellular data on 3G and edge. Calls and texts still work fine. Guess I'll have to restore later...oh well. Can't wait to have my iPhone 4 in hands tomorrow!!!

Eric says:

Same problem here - Pacific, LA market, 3Gs 3.1.3 (virgin), late-model phone, just replaced by Apple, unlimited iPhone data. I've had spotty 3G, EDGE, or no data at all.
Usually flipping to Airplane mode and back fixes the issue, but it is getting to be a PITA. I'm going to do a full restore and see if that does it. Thanks for the heads-up that I'm not an isolated case, tipb!
BTW, same issue is happening with my wife's 3Gs which was jailbroken 3.1.3 prior to the upgrade. I'll refresh hers tonight and see what happens.

B-Digital says:

Great! I didn't even notice until this was posted. Thank goodness I have a backup plan..........................
.................................iPhone 4 is on it's way!
switching airplane mode on then off works as a "bandaid". I just tried it out.
Good luck to everyone else!

Stuart Prestridge says:

No problems with mine. 16GB, black, purchased new in August 2009.

Jack says:

I'm using a 3GS on O2 in the UK with unlimited data. I've been experiencing frequent data outages since updating my software yesterday. Also on occasion, since updating, my phone will go suddenly from full reception to 'no service'. O2's serve isn't great at the best of times and this is starting to become more than a little frustrating.

Djlos says:

Yeah my data isn't workin at all. The rep said towers in Philly were down and all he could do was reset my connection. Smh

Julian says:

I had this problem I have a black 32 gb 3Gs. And all Internet connection was gone... I could only make calls and send texts after 5-7 specialists later and 2 restores I figured out a best bet solution instead of restoring from your last backup or setting up as a new one try and restore from an earlier back main a week or 2 or a month prior and it will work fine. I told this to an apple rep and he told all his senior advisors of the issue..

Rudy says:

Restore as new , problem solved. Unfortunately you loose your pictures taken by phone etc etc. Booo no way around this

Crunch says:

Towers are down? lol...Some reps. will say just about anything when an "I'm sorry, but I don't know" would be so much more appreciated. I was pulling down over 3Mbps on my 3GS with full bars in every part of my house. EDGE doesn't work either, so that's two networks that aren't down in my hood. You know, it's funny how calm I am about all of this. Those new anxiety meds have been a runaway hit, I don't mind telling y'all. :)

dlcrow says:

I had the same problem and did a restore as new iPhone and things seem to be working better now.

1911#IM says:

My voicemail password dropped out of the phone. I did not suffer the loss of data issue. Once I retyped my email password the problem self corrected.

toddfsu says:

No problems with my 3GS... but I did have to restore 1st, since my Jailbroken phone was NOT playing nice with the upgrade process.

Scott says:

I had a weird experience updating my iPhone 3G to iOS 4. Just like everyone else it took forever to update but once it did, everything seemed to be fine. I went to bed and thought nothing of it. Well at 5:08am for no reason my iPhone decided to dial the last called number on my phone. (I keep my iPhone on an iHome iH9 at night that is 10 ft from my bed). My wife heard someone's voice saying Hello? and woke me up. I didn't hear it but then my phone rang and it was the person who had been called calling back to see what I needed. Not sure if anyone else has had this issue, but it was weird to say the least.

John says:

Yes, had the same problem this morning on my 3GS (previously Spirit jailbroken on 3.1.3). Fixed it by going to help.benm.at on my iPhone and downloading and installing the AT&T carrier profile.

Macboy74 says:

No problems here with my 3GS. Had the same problem when I was with verizon earlier in the year and there data went down. So as you people can see no carrier is that reliable or perfect.

JohnW says:

My non-jailbroken 3GS didn't have any data troubles after the upgrade. I did have to reenter the voicemail password like another user mentioned, and I also had to enter a new passcode. The other weird thing I encountered is that none of my music showed up under "songs" in iPod, but it did show up under "artists" and "playlists". I have manual drag-and-drop of music set up in iTunes, and once I recopied one playlist from iTunes to the iPhone, the music showed up under "songs" in the iPod app as normal.

Michael Lambert says:

Same thing. Upgraded to iOS 4 this morning and immediately lost AT&T data.

audit says:

I'm having the EXACT problem. Reset phone to factory and upgraded through iTunes and now no Data. AT&T said it's Apples issue and Apple has been troubleshooting it with me for the last 45 minutes and no go.

Rjak says:

Same exact phone, data plan and OS. No problems at all.

Scott says:

Just had my second weird iOS 4 issue with my iPhone 3G (the first was the phone making calls on its own at 5am). The phone just said "NO SIM" and it wouldn't let me make a phone call. I did a quick google check on this and it appears I am not alone! The good news is that it is a simple fix; just turn the airplane mode on and a minute later turn it off and you have fixed the issue!

junastacio says:

I had the same problem this morming and called ATT and no help
this is what I did after getting not help from ATT
I synchked the phone to itunes did a backup and then restored 3g data worked again!!!!

tmbflyer says:

I have been having this problem for two days now, it is much better this evening. I hope that means it is fixed.

Crunch says:

Alright, just rinsed and repeated and this time, I checked the availability of AT&T data after doing the restore, but before restoring to my backup. Turns out that AT&T data works just fine with iOS4 on my 3GS clean all previous apps/photos/settings, etc.) iPhone 3GS. It even says "Activation successful" immediately after it reboots after iTunes asks you to keep your device connected.
However, AT&T data once again did not work after restoring my backup, so I'll try to do the AT&T carrier update that someone mentioned. At least we now know that the data issue is not related to AT&T, but rather to some of our own backups. I'll report back after I try the carrier update.
Oh, and by the way, I also got the Visual Voicemail password error message in both of my attempts to restore my backup. After I type in the correct password, voicemail seems to be work fine.

Tom says:

Upgraded my 3gs yesterday, no problems.

audit says:

Apple had me create a new ID on my computer and do a restore via iTunes. Everything's working again.

Charles says:

Upgraded my 3gs yesterday, no problems.

Tilk says:

It's not just AT&T . I had the same problem on Rogers network . Upgraded from jailbroken 3.1.3 to os4 and couldn't access cell data , restored firmware and restored phone from backup and the problem remained . Finally restored firmware but setup as a new phone and it worked. Must be something in the backup file that screws it up.

Bighead3020 says:

Same here AT&T and apple "genius" had no clue. Went home restored the phone from inside iTunes and setup as a new phone and it started working again it seem the carrier files get corrupt or doesn't load

Chatnoir80 says:

Updated my 3gs yesterday...and boy was it an ordeal, but loss of data was not part of it.

AndyM8218 says:

Same problem here, will do a restore and see what happens

brn2prgrm says:

ugh!!!! i had this problem when i upgraded to the GM build of iOS 4!

iPhone man says:

I live in phoenix AZ and AT&T just told me that there is a data outage here.

stephen long says:

I've just upgraded to OS4 and lost my data plan. My phone was jailbroken before I upgraded, maybe that has something to do with it. When I do a complete factory reset, the data plan works, but when I restore my backup, the plan stops working.

Medicskiers says:

I had the same problem today! Sporadic data outages! ATT needs to get their stuff together! Why call ATT? I am just going to get a We are sorry Sir, we are working on the problem! And thank you for choosing ATT and allowing us to rape you fiscally, while allowing us to give you crap service!

Mike T says:

Im having the same issue. Whats the deal?

Ezekiel says:

Same. here. 3g goes in and out, but EDGE works perfectly fine. Strange.

Bighead3020 says:

Mine was JB as well but after the full restore and setting up it up as a new phone it works fine

PsiSpy says:

Live in metro Atlanta-NO PROBLEM AT ALL!!! I have a 3GS with unlimited data. No problem with 4.0.

Crunch says:

Yep, looks like the backup file(s) or the fact that some of us were jailbroken. Those are the only two patterns as far as I can tell.
Some of you with 3GS iPhones who responded here didn't say as to whether or not you were jailbroken, or which OS version you were running prior to your successful upgrade.

Andy brown says:

Went to help.benm.at as instructed by an earlier post. Installed latest Att carrier file and Voilà!.... 3G love has returned!.. i was jb and did not do a clean install so spirit is the culprit. But this suggestion was was quicker than the restore others suggested !

DoubleDown says:

Ditto, but a complete restore as a new phone fixed the problem.

Travis says:

Went to that site but it's in German. Can't figure out what to do

Redclaw says:

Upgraded to iOS4 on my 3G and noticed that I can no longer stream iTunes podcasts in the background. I've always been able to do this previously on 3.1 and earlier. I've rebooted the phone and no change, maybe just a glitch but still not real happy with it.

Bunch says:

Dallas area outage for me. sucks. good thing my new phone will be here tomorrow!

Wil says:

The batter question is, how is your battery life now?

Darkstar says:

I think that people who hadn't updated their carrier signal software may have experienced this issue. I notices when I was trying to sync, iTunes wanted me to upgrade my carrier settings. Just a thought.

ojum pmantwenty3 says:

does anyone know how to fix this? this happened to me after updating from 3.1.3 on a 3gs, now i have no internet on 3g, mms, or visual voicemail. this is making me regret upgrading to ios 4

Scott Schulthess says:

Upgraded to 4.0, 3G no longer works. Restore doesn't fix it.

benjimen says:

Sounds made-up... probably some blogger out of ideas thought he/she would start something...

Jim Jimenez says:

I already knew I was too hasty and tried to upgrade without restoring a 3GS spirit jailbroken. It worked for at least my 1 hr commute and at least a few more hrs in the evening despite the phone doing a lot more fluctuation in signal than usual. Next day, same problem seen. Full restore+new phone worked for me.
Has anyone tried to just do a Renew Network Settings. Remembered that while restoring....

audit says:

When you go to about, check the Carrier, if it's not showing your carrier then you need to reload the OS again. That's what fixed mine.

Jay says:

I had no problems whatsoever...

Tim says:

I had this problem. Just tried the fix this guy recommended - seems to have worked for now. Just ran a test at speedtest.net, and I seem to have the same bandwidth I had before I had the issue.

Berk Gün says:

my carrier is turkcell. I've updated from jb 3.1.3 to 4.0! I had problems with 3g but edge and wifi were working so i restored my device. Now it works perfect!

Israel Rodriguez says:

Here in Brazil, i've got the same problem, and still no fix... No 3g connection!!

Donny1123 says:

I upgraded from 3.1.3 to 4.0 and had this problem as well. All I did was go to Settings > General > Reset > Reset Network Settings and now all is right with the world. :D
On another note, my wife has been trying to upgrade for two days, but after downloading the upgrade, it keeps stopping during the pre-upgrade backup process. Anyone else have this problem? Any suggestions?

Wintermute says:

Made the mistake of upgrading a JB 3GS on a whim.
Tried booting, resetting network settings, no love. Can't get mail. web, etc.
Performing a factory reset now. /fingers crossed :(

Wintermute says:

And that was the fix. Had to restore back to factory settings :( grrrrr

Mark in boston says:

No data after upgrading to IOS4
Ask for a credit when you call support and you will get a $30 credit for your trouble.

Jordan S says:

non-jailbroken 3Gs user here with unlimited data. Upgrade to iOS 4 went smooth as silk...no issues with the phone; no issues with the network. Feels like I just got a new phone!

Andy Bird says:

I can send texts and call but I have no data. I am a 3GS user with unlimited data plan and I just upgraded to 4.0 yesterday. I can't surf the web, go on itunes, or check mail while on signal...

Jason says:

I was getting cannot connect to ITunes store and safari can't load page because no connection. I went to settings/store and re logged in and so far I've no more issues, fingers crossed

Alex says:

Same problem here. LA, California: full bars, can make call, but no data.

Carlos says:

Followed suggestion by Smith and now back in business.
Here's what I did:

  1. Connect to a WiFi network on phone. Open Safari and go to help.benm.at
  2. Click on Tethering. Select your country (USA in my case) and select your provider in the next page (AT&T Unfortunately in my case)
  3. Press the Download button and press Install at the next screen.
  4. Reboot your iPhone

Hope this works for you too!

J says:

for those of you that did the help.benm.at file/trick. Have you noticed your tethering option is GONE under network settings??? well, at least it has for me. 3Gs JB iOS4 data connection works. my carrier file now is at 7.0. ughhhhhh anybody else fine a fix for this or are you reverting back to carrier IPCC file 5.6??? Please help

D says:

Listen to @ Andy brown. Upgraded from a Spirit jailbreak on 3.1.3 on my 3GS. Everything was great but no data no 3G no EDGE. It would show service and signal meter was showing -81 -110 but no Data. Statistics shows 1kb received 0 bytes sent. I had tried everything shy of restoring as a new phone and nothing worked. I figured the post mentioning the help.benm.at was way to simple to work. LISTEN go to help.benm.at on ur iphone. Follow directions for tethering...and voila the data is back as good(or bad) as ever! I did not even have to to a soft or hard reset. Hope this helps!!

pvs says:

Thank god for this thread... I was nearly in tears this morning when I found that 4.0 had turned my phone into ... a phone! (haha, no data.)
I too, had jailbroken last month, to get mywi app for tethering.
I just used the help.benm.at trick mentioned above and not only am i back in business, but i actually see that the tethering option in network is back. i havent tried it out but i hope it works for my ipad!!! :) thanks all!

Travis says:

Apparently there is a bug with a yet to be determined application that the users had downloaded. Of course ATT doesn't know what that app is but you can sync your phone and exclude all app store apps and should be able to get data. In theory...

Jason dauch says:

I have a iPhone 3GS an after the ios4 update my phone started acting strange. My Internet connection is spotty and phone calls are dropping like Ozzy Osbornes brain cells. I guess I'm lucky because my phones working part of the time.

kzee says:

i'm from singapore and i'm having the same problem. apparently the telco cant figure out what the problem is. So i came to the conclusion the switch jailbreak is the culprit.
i got it done by following the step by smith

pvs says:

Hey, it's me again... anyone having problems with visual voicemail after the benm.at fix?

Aj says:

You just need to go to http://www.unlockit.co.nz/ select continue> custom apn> us AT&T> create> install
Obviously you have to be on wifi and this will re set your carrier apn.

Des2010 says:

So I had a jailbroken 3gs and decided to upgrade to iOS4. BIG mistake. Now I have no MMS anywhere and no Visual Voicemail! I restored my phone, but back to my old settings. If i wipe my phone completely clean and start it as a new phone setting, is there a way I can put my pictures back on it later? My pictures are my main concern!

blastoff3993 says:

Check your Network settings. Mine had 3G turned off. This was definitely an artifact after the iOS4 upgrade

scrotyMcBoogerballs says:

i've probably recovered my iphone 10 times, finally googled the prob and got this page, i thought it was because i dropped my 3GS so many times, glad its not only me, i just got the 3GS and gave my mom my 3G and i'm waiting on the iphone4 to come in the mail in a couple weeks but since 3GS screwed i have been unfortunately using the bbcurve.

jwdil says:

My 3GS has never been jailbroken and yet it freezes up every time at the very end when loading. It started right when i updated to iOS4...help

Dennis caunce says:

I upgraded to 4.0 from a spirit jailbrake. After this I had no data. I had to restore as a new device to fix this.

rsk says:

Hey, Its the same issue over in singapore too, I just followed the instruction given by Carlos, it worked without doing anything else. Thanks a lot Carlos.

Aqx says:

hey, i'm from singapore too and yes, i'm experiencing the same problem. trying to follow the step by step by carlos. shall update if it works for me too!

chucky says:

i have the same problem wit my 3gs no data at all sucks really bad man

chucky says:

omg this tethering thing work kool thanks

Mark says:

I upgraded last night, 6/28/10. Same problem.

anthony says:

i've been having the same problem for 3 day now. I contacted ATT several times to finally learn that its a problem with the iOS 4 software update, not the network. Is there even a way to go back to my 3GS software?

Spyware says:

Updated from official 3.1.3 to 4 GM on iPhone 3G late last night, had this problem. I do have unlimited data on AT&T.

Spyware says:

Anthony. Google "Iphone 3.1.3 download" and choose a link from there that will let you download an ISPW file. Here is the link I used:http://appldnld.apple.com.edgesuite.net/content.info.apple.com/iPhone/06...3.1.37E18_Restore.ipsw
That is for a 3GS only. Then put your phone in DFU mode, google that too if you don't know how. Then use iTunes to "restore" your phone with the ipsw file. (you need to hold shift while clicking on the Restore button in order to be able to select the ipsw file)

Brian says:

same problem: only fix i could find was jailbreak and install ultrasnow. then i got it back. Very strange.

Jason says:

Same issue here. I went to www.unlockit.co.nz and installed a custom APN and got my data back. This seems like a workaround though.

SF_Mapper says:

Upgraded three days ago and am having the same problem. 3GS with unlimited data. Between the constant dropped calls and now this, I am not very happy.

Zimmbob says:

I upgraded yesterday with the same problem. I hate AT&T whether it's their fault or not... I just need to hold out until the iPhone 4 arrives on my door step in a few weeks. I'm glad the local Apple "Gurus" haven't heard of this situation or have any positive response to the issue.

Matthew Smith says:

I upgraded my 3GS to iOS4 on the night it was released... I had not problems until 06/30/2010 morning... since then I can get NO signal at home where normally I get a strong 3G signal. Not until I get about 3 minutes away from my house on my way to work do I get any signal at all...but at work I still get full 3G signal. I called AT&T last night... after a few escalations as well, the guy finally said it was because I had upgraded to iOS4... that the towers in my area are working fine... nothing they could do until Apple comes out with 4.1 fixes. :( :( :(

cementdrums says:

I upgraded to ios4 Tuesday night and have been unable to connect to cellular data since. Apple and AT&T have been able to do nothing. I have been through 3 sessions with them. I have a 3GS and still have the data unlimited plan. I have also lost the mms function after the ios4 upgrade.
Quite unpleasant, I rely on this connection for my livelihood.

miked says:

This worked for me but I still don't have MMS on my 3GS:http://forums.macrumors.com/showthread.php?t=946542

Erin says:

Before the update, I could easily access the web from my iPhone. I, too, have unlimited data. Since the update, web pages don't load completely or I get an error that the server is not available. It is very problematic and irritating.

pl says:

My 3GS phone might as well be a brick since upgrading to IOS4. Not only do I not have any phone connectivity or data 90% of the time and the phone's constant searching for signal is draining my battery each day. I was hopeful for about a week that my local cell tower had been blown away but sadly it is my phone. I might as well not exist anymore. I really need this fixed by Apple and it is frustrating to hear SJ say things like 'no battery problem' with 3GS upgraded to IOS4.... We need to be able to 'downgrade' or they need 4.0.1 quickly.

Bruce says:

I have the exact same problem. I barely can make a call from my house that used to have near full service. I can't use any data based apps without wi-fi connection. I can't get my visual voicemail nor can I send MMS. The only thing to do is to downgrade back to 3.1.3 and wait for a real fix. As "Spyware" said in a previous post, downgrading is easy. Download the 3.1.3 os for your phone by googling it. It is 291MB in size. Then with your phone connected to itunes, power it off. Then hold down the home button and the top button for 10 seconds, then release and hold down just the home button until you see a picture of a cord and the words itunes on your screen. Also it will pop-up on your computers screen that you've entered recovery mode. Now in itunes the only option after clicking on your phone is restore. So hold shift and click restore (in windows anyway not sure what it is for Mac). Now it will ask you to browse for the iphone OS and the rest is pretty self explanatory. If you don't get my instructions just google downgrade from ios 4 to 3.1.3. There is a ton of guides and videos how to do it. Its really easy.

Bruce says:

Ohh tough break I guess on restoring. Apple stopped signing 3.1.3 so you cannot restore to that using itunes. I can't believe that they offer absolutely nothing as an immediate fix to the problem. It looks like people who had the phone jailbroken prior to 4.0 and clicked the Make my life easier button in cydia still have a chance. Read more here: http://www.ihackintosh.com/2010/06/downgrade-iphone-3gs-ios-4-0-to-3-1-3...

Neal says:

Two days without phone or data!!! Neither AT&T or Apple can fix it. My wife's non-Apple phone works fine with AT&T.

raul game says:

i have iphone 3gs in chile . when i update to os 4 , i lost frequently calls , signal , ect... i discover it is not compatible with 3g , so i use only edge , the problem disapears , but the network its very slow if i have not wifi ..

Daniel says:

I have the same problem with my 3Gs, I updated on Saturday and now I can't get internet unless I am in a WiFi area, I have also had issues with my phone not ringing and suddenly I have a missed call,and I have noticed I can no longer send or recieve picture messages.

Big John says:

The restore doesnt work, will always get error trying to do it, opened up ports for apple to see same trouble, the only fix for this right now is to get a phone without the upgrade installed from apple, att is not the problem, unlimited data is not the problem it has nothing to do with it. This is apples problem, the only thing apple will do for now is give u a refurb if you want one.

Justin says:

I'm having the same problem, I can make calls but not use any data coverage including MMS ever since updating to 4.0.1 and also 4.0.2

Mitch says:

I have 3 3GS's at my house, all having problems with signal for at least a month now and since installing IOS 4.1, this is the first place I've found where people are talking this issue. I only get a good signal at work now, probably because the building is full of antennas. Has Apple acknowledged there is a problem with reception on 3GS's on IOS 4 yet?

Dpf says:

Bought 2, iPhone 3GS about 9 months ago. About 3 months ago, one started dropping calls. I spoke to ATT & Apple. ATT did some things to "reset the phone to the tower", so they say. Apple did nothing. The problem began getting worse. If I'm talking on the phone and get a text, the call will drop. Always shows 3 to 4 bars in signal. Called ATT 9 times since the problem started, called Apple 3 times, and ATT also did a 3 way conference call with Apple & me, twice.
Apple swears it is a software problem with ATT sim card, so ATT replaced the sim card. Did not help. ATT swears it is a hardware problem. Long story short, I have been paying over 100.00 for the past 3 months, but can't make calls longer than 20 seconds. Home button also started acting up. Sometimes you have to push it very hard several times to get any reaction. And you have to push it on the right hand side of the button or it will not work.
Apple finally gave in, because the hardware warranty is still good, and said to take it to the local Apple store for replacement, because of the home button, not because it was dropping calls. Well, Apple store in Lafayette Louisiana does not handle iPhones....hmmm there's a kick in the teeth. Apple tells me to go to THAT store, but that store is useless when it comes to phones.
So, I bring the phone back home, and called ATT again. This time to cancel the account. I have been a ping pong ball between Apple & ATT long enough.
Again, they do conference call with Apple, but now Apple wants 35.00 from me to send them the phone... why?? The phone only weighs a few ounces, I can FedEx overnight for about 15.00. I refused to pay anything. It's under warranty, and they have been shinning me on for 3 months. I told ATT that I wanted to end the conference call with Apple and proceed with canceling the contract. ATT said I had to pay a penalty for canceling early. I told them to take me to court, I refuse to pay that also, simply because I have paid over 300.00 in the last 3 months for service that I didn't get. The phone is a great iPod, but a terrible phone during the last 3 months.
So, then ATT steps up, and offers me a free phone upgrade, 3 months early. I was surprised, but interested. I refused their offer for another iPhone, simply because of Apple. I would never ever buy another iPhone. Not that they are all bad phones, but because support is non-exsistant, even with warrenty and Apple care. Apple has offered absolutely no support in the past 3 months. They have done nothing all the way through this nightmare, but blame ATT's network, which is bull. I can use the other iPhone, make a call and talk for hours, hang up, call the same person with the bad phone, and the call drops within 20 seconds. I know it's not the network. I did take ATT's offer for the HTC 4 Inspire. My total out of pocket cost for this phone was 4.06.
ATT waved all the fees and didn't ask me for anything except 4.06 which was some kind of tax that they couldn't get around.
So, be careful spending money on Apple care.... because Apple, really doesn't care!

Jp says:

This is my exact problem. I upgraded my 3GS to iOS4 and my data connection began to deteriorate. Data access became more and more spotty, and finally it was off more than on. Went to apple store who said they hadn't heard of the problem (first line store person, not tech). Went to AT&T store and requested a new Sims card. Seemed to work great for about an hour, then the 3GS is back to the same near zero data access. Considering a complete restore of the iOS4 from off my PC.