South by Southwest (SXSW) in Austin, Texas used to be a small indie music festival, but it has now turned into a network crushing media behemoth which is causing many iPhone users to pull out their hair in frustration from shoddy 3G service.

The Austin 3G network seems to have come crashing down due to an overload of iPhone users utilizing their high-priced data services. Users have experienced dropped calls and unreasonably slow data rates the entire time they have been at the festival.

According to Business Insider, AT&T is aware of the problem:

AT&T (T) tells us it’s adding wireless capacity in downtown Austin to deal with “unprecedented” demand (that’s resulted in service that’s flaky at best). This, of course, a result of thousands (tens of thousands?) of South by Southwest attendees bringing 3G iPhones into this part of Austin for the first time. The telco expects service to improve tonight and throughout the rest of the show.

As the amount of people using high-powered mobile devices has grown, cell phone providers have had to come up with new ways to shore up the local services during major events. Maybe next year AT&T will consider South by Southwest a “major event,” and better prepare before some of their customers decide to jump ship.

[via Macworld]