Most tiered data users going for top options

AT&T CEO Randall Stephenson shared some thoughts on his relationship with Steve Jobs, the iPhone and the way the device continues to shape his company during an on-stage interview at the Milken Institute's Global Conference earlier this week, reports The New York Times. Among the revelations was his view that the early "unlimited" data model was ultimately a bad idea, and that messaging systems like iMessage that bypass SMS plans are "disruptive."

Stephenson was of course speaking on both topics from the point of view of a person who's job it is to capitalize on data usage. At least in hindsight, Stephenson referred to the original unlimited data plan as "a regret" and said he would have preferred that heavy users pay more for it rather than having light users subsidize the heavier users. It could be argued, however, that the unlimited offer enticed users into buying smartphones and data plans who might not otherwise have done so.

Introductory offers are often sold as a loss leader to get customers used to a level of service they will have to pay more for later. The company has since moved away from unlimited data and now says that 70 percent of the people who are on tiered data plans tend to the more expensive options. In the previous quarter, AT&T reported that $6.1 billion of its revenue was from mobile data alone.

Stephenson also saw other services, including specifically iMessage and Skype's messaging capabilities, as threats to AT&T own SMS messaging, which is a major profit center for carriers, as the service runs entirely on "overhead" bandwidth that costs the provider little. "If you're using iMessage, you're not using one of our message services, right?" he asked the crowd. "That's disruptive to our messaging revenue stream."

While text messaging is still growing in the US, the rate of growth has slowed. Messaging in other countries has started to decline in favor of other systems, including iMessage, Skype and most recently Facebook, which just updated Facebook Messenger to do SMS-style messaging on mobile devices.

"You lay awake at night worrying [that services like that] ... will disrupt your business model," Stephenson said.

Despite the comments about iMessage, he was upbeat on the decision to have taken on the iPhone originally, despite the way it "disrupted" the entire cell phone industry. He related a tale about Stan Sigman, who was chief executive of Cingular at the time, coming to the AT&T board to talk about "a unique opportunity."

Sigman convinced the board to go with Apple's plan, even though Sigman himself had not even seen so much as a picture of the device at the time. The board was intially nervous about the decision, as the executives were aware that it would transform the company's entire business model.

"I remember asking the question: are we investing in a business model, are we investing in a product, or are we investing in Steve Jobs?" Stephenson said. "The answer to the question was, you're investing in Steve Jobs." [via The New York Times]

By Electronista Staff

Post tools:

TAGS :  

iPhone, AT&T, AT&T, mobile phones