AT&T Chief Regrets Offering Unlimited Data for iPhone
Biggest news in mobile this past week was the following quote by Randall Stephenson, the CEO of AT&T during a wireless industry conference (clink link above for more):
“My only regret was how we introduced pricing in the beginning, because how did we introduce pricing? Thirty dollars and you get all you can eat. And it’s a variable cost model. Every additional megabyte you use in this network, I have to invest capital.”
It’s very important to remember the source of the quote and potential ulterior motives. AT&T and Verizon Wireless have for many years complained about not having enough access to wireless spectrum. Many, including several of my buddies in the industry (back from my IDT days) disagree with their very public assessment. Perhaps they have the following three things in mind:
- AT&T and Verizon have for years been trying to acquire smaller players to make this a much less competitive game. They tried and failed with T-Mobile, and it’s likely that there will be another opportunity with Lightsquared about to face bankruptcy. This is their way of positioning themselves to show their great need for more spectrum.
- Another motive may simply be that complaining about huge data costs provides them a convenient excuse to charge customers more money for data services.
- Most importantly, this may be a ploy to keep their current customers from switching to rivals. Remember, for a giant like AT&T, who was the only player in the US iPhone game till about a year and a half ago, many of their iPhone 4 customers are now nearing the end of their contracts. Perhaps it was just a gentle reminder that it’s in their best interests to stick around when they upgrade their phones.
Natanel is an entrepreneur based in NYC. He is a graduate of MIT Sloan, a former MIT $100K Competition grand prize winner, and incubates his ideas at BSD Technology Ventures, Ltd.