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  • AT&T CEO: We Never Should Have Offered Unlimited Data; and iMessage...?


    As it appears, AT&T C.E.O. Randall Stephenson had a lot to say this week about the company, and the iPhone. It appears that his choice to offer unlimited data in the first place, as well as the fact that Appleís new iMessage feature is biting into AT&Tís text-messaging earnings, is causing him lack of sleep at night. That, or maybe all the greed has gone to his head. The comments by Stephenson, recorded by the New York Times, are as follows:

    Quote Originally Posted by Randall Stephenson
    "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," he said in the on-stage interview at the Milken Instituteís Global Conference on Wednesday. "And itís a variable cost model. Every additional megabyte you use in this network, I have to invest capital."

    "You lie awake at night worrying about what is that which will disrupt your business model. Apple iMessage is a classic example. If youíre using iMessage, youíre not using one of our messaging services, right? Thatís disruptive to our messaging revenue stream."

    ďI remember asking the question: Are we investing in a business model, are we investing in a product or are we investing in Steve Jobs?Ē Mr. Stephenson said. ďThe answer to the question was, youíre investing in Steve Jobs. Letís go after this thing. And we went after it, and the rest is history.Ē
    AT&T once offered the unlimited data plan for most phones for only $30 per month, which is a very cheap price in comparison to the overpriced tiered data plans that are now plaguing cellular providers everywhere. Stephenson admits that he regrets offering the unlimited data plan because heavy data users take advantage of the unlimited data and donít get charged overages Ė this leads to less revenue for the company.

    While Sprint continues to offer unlimited data and plans to do so even beyond the release of the next generation iPhone, AT&T and Verizon have moved past unlimited data, offering very limited services for almost the same price as Sprint wants.

    Apart from his beef with the unlimited data, Stephenson trash-talked Apple iMessage as well in respects to the fact that it means less text messaging from AT&Tís end. AT&T offers an unlimited text messaging option, but also used to offer limited text messaging options, which people have been getting around with Appleís internet-based communication system. With the amount of Android phones out on the market today, it's not as if iMessage controls the entire messaging world (it is iOS-to-iOS only), which illustrates the C.E.O.'s true, greedy colors.

    All in all, while AT&Tís Stephenson appears to have a lot of issues with the way the iPhone is running the phone industry today in terms of iMessage and cellular data, there isnít much he can do about it as closing the iPhone out of AT&Tís phone options would kill the companyís revenue dramatically.

    As for Apple? They should just keep releasing these free, Internet-based features so AT&T canít make us pay for them!

    Sources: New York Times
    This article was originally published in forum thread: AT&T CEO: We Never Should Have Offered Unlimited Data; and iMessage...? started by Anthony Bouchard View original post
    Comments 83 Comments
    1. Dayvidpriddy's Avatar
      Dayvidpriddy -
      Quote Originally Posted by Gopher_Otis View Post
      AT&T sucks! They definitely can't beat this!My total is $102 and some change.
      A friend of mine has his iPhone 4 with AT&T and he gets screwed on going over the 2GB cap every month.
      @Rokesomesmeefer, great name, think I'll go do that right now!
      I wouldn't be to quick to recommond Sprint to ANYONE! Their data network is basically non-existant. Most people are getting like 0.10mbps on the download! There is a thread on their discussions page with almost 1 MILLION views (and thousands of replies) about how "iPhone 4S is useless with unlimited data" because nobody can do anything on their phone! And it's not just the iPhone, it's any phone on Sprint's network. Here is the link...it's a hilarious read but quite a long one: Sprint Community: iPhone 4S on 3G data network too slow to be useful I switched to them in January and was gone 3 weeks later, the speed was just rEdiculous.

      Sprint is more than likely going under, they have failed eplicly here, I can't believe that Apple knew that their network was dead and still allowed them to carry the iPhone. Sprint deserves what it gets! Offering "unlimited data" but that data not working should be illegal...
    1. bigdrdok's Avatar
      bigdrdok -
      Quote Originally Posted by ssjbrolly View Post
      Only thing I have to say is...F*ck You!! Not like the service is any better than before and constantly saying 4G when they truly aren't on the entire nation, and have been hogging money left and right and this is how he answers to the public....Greedy SOB. I don't care how crappy Sprint is, and even though I am aware they aren't 4G yet, but for iphone 5, I will be going there. Screw you AT&T.
      Agreed!!! Sprint here I come!!! 😏
    1. csglinux's Avatar
      csglinux -
      Randall - there's an obvious solution to your sleepless nights: develop a business model where you just provide reasonable cellular coverage, sell data at a competitive price and treat your customers with some respect.

      Trying to sell the same data twice (a.k.a. tethering charges) or trying to sell outrageously overpriced text messaging plans to anybody that has any kind of data plan aren't business models that are going to last. Given the amount of data needed to transfer 160 characters, text messaging plans are frankly taxes on stupidity; shame on anybody who pays them.

      Given their performance over the last couple of years, I can't understand why Randall Stephenson and the rest of the board haven't been fired. In any other industry, they'd have been collecting welfare checks by now.
    1. Effenpig!'s Avatar
      Effenpig! -
      Quote Originally Posted by AUZambo View Post
      I see nothing wrong with his comments. The hate for AT&T is so strong it really doesn't matter what they say, y'all will complain about it.

      What business man DOESN'T look back at past decisions and second guess himself? Is not the purpose of a business to make as much money as possible?
      I can tell you one thing that's wrong with his comments, it's bad PR. there's a ton of news articles reporting his statement and the response is not good at all. I wonder if he would be saying any of this if AT&T was still the sole carrier of the iPhone?

      Another thing is it doesn't really make sense to me. The iPhone and unlimited plans are cutting into profits? I wonder how many subscribers AT&T has just because of having the iPhone first? How many people are only still with AT&T because of their grandfathered unlimited data? I can't honestly imagine attt profits would be anywhere near what they are had they not taken on the iPhone.
    1. thetoothfairy's Avatar
      thetoothfairy -
      I remember when the iPhone first came out I could not even get edge where I live.... I paid a year and could not use my phone at all as far as data goes..... I called and complained about it......I had to pay but could not even use it. ATT didn't mind taking my money each month at that time....
    1. H4CK3R's Avatar
      H4CK3R -
      That's the other thing about AT&T - They don't care about their customers.
    1. desepticon's Avatar
      desepticon -
      **** AT&T!. I have an unlimited data plan but I got a text message last month telling me I had downloaded more than 3 GB that month and if I didn't decrease my data usage they would throttle me. I checked my usage and I had used 3.2 GB that month. What ***-hats. If I wanted 10 GB I shouldn't have any problems. It isn't my problem they refuse to properly upgrade their network.
    1. khaoticsquirrel's Avatar
      khaoticsquirrel -
      They initially introduced unlimited data to Edge users. $30 for unlimited 2G data was a steal for AT&T. I remember using the network and wishing that they would upgrade their slow network. A lot of the sites at that time were flash-based too. Ahh the good ole days. AT&T blows, but so does every other network at this point in the US.
    1. spooneditr's Avatar
      spooneditr -
      Serves him right!! Damn bastard has so much damn money coming out of his ears. He can't sleep? What about people out there not sure if they can pay there next bill or dinner!?
    1. AUZambo's Avatar
      AUZambo -
      Quote Originally Posted by Effenpig! View Post
      I can tell you one thing that's wrong with his comments, it's bad PR. there's a ton of news articles reporting his statement and the response is not good at all. I wonder if he would be saying any of this if AT&T was still the sole carrier of the iPhone?

      Another thing is it doesn't really make sense to me. The iPhone and unlimited plans are cutting into profits? I wonder how many subscribers AT&T has just because of having the iPhone first? How many people are only still with AT&T because of their grandfathered unlimited data? I can't honestly imagine attt profits would be anywhere near what they are had they not taken on the iPhone.
      Good point. Didn't think about it.
    1. Cokeman's Avatar
      Cokeman -
      The CEO is a idiot. Lets look at the history.

      1st iPhone:
      499.00 - 599.00 (later lowered 100.00)
      Data plan required 20.00 a month includes 200 text messages a month. Wait at that time AT&T had a 200 message plan for 5.00 a month. But I have unlimited family text plan for 30.00 a month. AT&T response to bad we are still charging you 5.00 for 200 text that you will never use.
      So now I'm paying 35.00 a month for text plan...nope wife has the iPhone also....40 a month. Data usage was low due to no apps on the phone, cause no app store. Jailbreaking allowed apps, but very few data hogs at the time. AT&T claimed data was for email, web & unlimited voicemail.

      iPhone 3G comes along. 199-299 2 yr agreement 30.00 unlimited Data required
      AT&T gets the shaft when data usage skyrockets. According to them anyway. iPhone 3G users are now required 30.00 unlimited data. Makes perfect sense all the other smartphones require 30 a month. iPhone should be no different. Messaging plan not included. Not a issue for most they already had it. Why AT&T didn't get the shaft as they claim read 3GS.

      So iPhone 3GS is released. AT&T announced the removal of the 30 unlimited plan. All new customers will enjoy the benefit of lower data plans. AT&T claims that 90% of their users fall in the 15.00 a month plan for 200mb, but if you need more 25.00 for 2gb. Overage fees are 200mb 15.00, 1gb 10.00. What????? So 90% of your users are going to pay for the people that are using excessive amounts of data which boils down to maybe 1%. I can hear the conversation at AT&T, 90% use under 200mb on average, 40% of those go over a lot, so lets charge them a lower fee thinking they will spend less & gouge the **** out of them on overage cost, If they happen to upgrade to the 25.00 plan, we lost 5 bucks. Not a big deal since joe down the road paid us 15.00 & only used 20mb.

      As for iMessaging...that isn't doing anything to AT&T. It only works on iDevices. I don't know anyone that only text iDevice users so they could drop their messaging plan.
    1. GenesisDH's Avatar
      GenesisDH -
      My thoughts is that the company should have followed what Walmart does in retail (charging more for the required/necessary/highly-utilized goods while slightly/temporarily lowering the cost for less desirable, more profitable items in order to increase sales).

      Here's some examples:

      at&t should have focused on acquiring more revenue from B2B customers, especially after SBC purchased the primarily B2B oriented AT&T Corp. Most businesses still need a cable/wired telephone or internet to conduct day-to-day operations, and at&t could have used that to their advantage. at&t is still 1 of a few companies that are allowed to, can, and are willing to cater to B2B on a local level, and that could have been utilized. Add in that 99%-100% of buildings are de facto wired for telephone, and cable or satellite can be expensive to install; at&t could have leveraged on that fact easily. Besides, businesses usually trickle their costs to the consumer so those sorts of increases wouldn't usually cause much churn.

      They could start charging more or reducing the minutes for non-unlimited voice plans, as others have said. This could increase upsells to 'higher priced but better quality' unlimited voice plans, and give them some sort of padding on revenue. Charge more for overage and reduce the rollover and night/weekend perks (or charge for increased amounts) could also work. I know numerous people who abuse the rollover and N&W clauses in their lines of service. N&W are no longer off-peak as far as network use, and shouldn't be treated as such.

      Prepaid: They are starting to go the right way on that end, in respect to their bottom line. I'm sorry, but in a business sense, requiring monthly plans to do more than just talk is a smart decision. Per-minute plans are waning in popularity, and that should be leveraged.

      MVNOs and other wholesale customers: Raise rates on them (they *ARE* B2B customers, by the way). They are eating more at at&t's revenue than individual customers (basically it amounts to capitalistic cannibalism, as they are providing a cheaper service on the same network). Do you know how many people on here or on most that are going to ST, H2O, or a similar prepaid provider? Wholesale selling usually doesn't help a company's bottom line.

      at&t definitely made several wrong moves and are pretty inefficient in how they operated their business. I understand money has to be made, but a balance is required to maintain it. Until that happens, their revenues will lower to compensate. Sprint and T-Mobile are trying to do handle that, and eventually they'll probably end up at a similar price level as the other big two. That's unfortunate, but it's a seeming truth.

      Now, at the same time, my views will probably be disagreed on. I understand a customer wants a cheap product or service, but this is one particular case that quantity has to be paid for. You want something more or better, you might as well expect to pay for it somehow.
    1. Xenthis's Avatar
      Xenthis -
      Quote Originally Posted by Beastly L92 View Post
      And this is just one of the many reasons why AT&T will be permanently and emphatically shown the door once the iPhone 5 launches. Network, customer service, false advertisement and disrespect.
      Unbelievably selfish.
    1. confucious's Avatar
      confucious -
      Quote Originally Posted by demonknight9 View Post
      Of course they own their entire network. It was well publicised when it happened. They used to borrow masts from orange for 2G but not anymore,
      I obviously don't know as much as I thought i did!

      Three used to use o2 for 2G then went to Orange.

      They have never had a 2G network and have always been very slow to swap to 2G as they have had to pay for it - which is one of the major problems with their network.

      They always said they were a 3G only network and I have seen nothing to even sugest they are not.

      Please give me some reason to think they are not?
    1. iPod's Avatar
      iPod -
      Big Red is for me
    1. c0dy's Avatar
      c0dy -
      wow what a douche
    1. regkilla's Avatar
      regkilla -
      The CEO & AT&T are all greedy! Apple should just release their iPhone 5 on Verizon and Sprint.



      Screw u AT&T!
    1. Nickaroni22's Avatar
      Nickaroni22 -
      It comes down to this AT&T is losing customers to Verizon and Sprint. So they have to increase prIces, to maintain the profit flow. I also agree that if Verizon would offer unlimited data, AT&T would be in serious trouble. In the end, smartphones are now the cash cow. I will be going to Verizon as soon as my contract expires in July. Just in time for the new iPhone. AT&T is a pathetic greedy joke
    1. buggsy2's Avatar
      buggsy2 -
      Quote Originally Posted by Beastly L92 View Post
      How did they expand their network? by trying to buy T-Mo's crappy network.
      And before that they bought Pacbell, Cingular, and Airtouch. AT&T doesn't have any tech competence in house, they just buy it. They STILL haven't properly merged their wireless and landline websites/accounts!
    1. Rcworship's Avatar
      Rcworship -
      I only had 200 texts a month on my and my wife's phones. She got an iPhone and moved to 1000 texts while I canceled texts altogether and went with textfree app. Now AT&T has upped their minimum data plan to 300 mb/15 or 3 gb/30. I am near wifi all the time so I don't need a data plan much. I use any means to reduce to spending I'm stuck with. Seems the service decreases while the price increases.