AT&T CEO says data-only subscriptions 'inevitable' for wireless networks
Speaking at an investors conference, Stephenson said that while AT&T had no plans in place to offer an all-data subscription model, the industry is trending in that direction as smartphones continue to gain popularity led by Apple's iPhone and handsets running Google's Android mobile operating system, reports the Associated Press.
"I'll be surprised if, in the next 24 months, we don't see people in the market place with data-only plans," Stephenson said. "I just think that's inevitable."
Under a data-centric plan users would have to use VoIP solutions like Skype to hold voice conversations, changing Internet calling into a necessity rather than an option to save on billed minutes. The switch would also be disruptive to the installed system in which telecoms monetize voice calls by charging each other to connect to cellphone numbers. This is one of the reasons why voice and data charges are billed separately.
Stephenson recently bemoaned AT&T's decision to offer unlimited data with the original iPhone and iPad, adding that Apple's iMessage is also a source of concern because it takes away from the company's texting revenue.
While it may seem ironic that texting is quickly moving the industry away from voice technology toward a style of communication seen in pagers during the 1990's, the reality is that modern data exchanges offer a much richer and more immediate experience than their obsolescent counterparts. Smartphones give users the ability to be in constant contact with each other, and new data-driven apps like Sounder literally keep an open connection to friends and peers.
As telecoms move to 4G LTE, an increasing amount of consumers will use an increasing amount of limited bandwidth which could force carriers to raise prices or find alternative solutions.
AT&T CEO Randall Stephenson. | Source: AT&T
For now, AT&T is hoping to introduce a shared data plan similar to how the company offers shared voice plans for families. The initiative is a long time coming and the carrier has been "working on it" for over a year, presumably to find a way to implement such a service without losing profits.
With shared data plans essentially representing a discount for users that would normally buy separate plans for each device they owned, the prospect of the pricing structure would seemingly be damaging to telecoms' bottom lines. Stephenson pointed out that AT&T is looking to make more money from shared data, not less.
When you have millions of devices such as tablets that lack cellular data plans, Stephenson said, "it seems to me it's a lift, not a deterioration" to get them connected. The chief executive is referring to users who may not be using the cellular capabilities of their iPads or other tablets and are instead operating solely on Wi-Fi.
To make data plan pricing more attractive to consumers Stephenson noted that the wireless industry will experiment with charging content providers for the data used to access their websites in a type of "800 toll-free number" system. Critics say this would give the upper hand to well-established companies that can afford to pay the instituted subsidy and squelch competition from cash-poor startups. The experiment will likely start within the year, though it is unknown which carriers will be taking part in the initiative.
"It's not us going out and mandating this. The content guys are coming in asking for it," Stephenson said. "If you don't allow those kinds of models to flourish, you're going to inhibit the potential of these services."
75 Comments
How about NO data subscriptions?! How's that sound?!
It's my understanding that Morpheus had a data only wireless plan, but squiddies had all his best spots.
How about a data subscription for a service that's actually usable? The AT&T network is worthless in the downtown Chicago area.
Well apple my as well just make 3 or 4G iPods instead. I'm so sick of hearing what AT&T thinks is good. They make me ill when I read about what the CEO has to say.
It's really simple. They have DPI boxes that do very little that are currently not real-time tied to AAA/Radius. DPI is a guarantee, the tie to the sub account is another thing.
Once they deploy additional DPI boxes at the core pops/drains or T2 positions on their networks, and have a link back to tie this in, they can offer 100% unlimited tiered pricing based on the traffic that is passing on their networks. Choose 100% voip, and you'll have to pay more. Choose only bookface, and you might fit into their $500/mo cheap plan!
Apple owners could care less, their voice doesn't work very well on ATT cell network to begin with. They could care less about things like AAA or DPI or Radius on a carrier network.