AT&T CEO: Data-Only Plans for Smartphones Are Inevitable

[Anthony Bouchard]

It wasn’t too long ago that AT&T CEO Randall Stephenson was complaining about his poor choice of offering unlimited data and saying that Apple’s iMessage was causing him loss of sleep at night. Now the CEO feels that regardless of what AT&T (cough... Stephenson) wants, the company might have to start offering data-only smartphone plans in the distant future to compete with other cellular providers in coming years.

Services such as Apple’s FaceTime and iMessage, as well as Skype, Vonage, and other VoIP solutions are more affordable than ordering monthly phone service from cellular providers. They also work just fine off of the cellular data that smartphones are capable of tapping into. Stephenson envisions a day when people will use their smartphones only to tap into the cellular data, using VoIP and instant messaging services to dodge the high costs of phone and text messaging services.

"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."

While the day that smartphones will only be connected to data plans on AT&T’s network is probably distant in the future, it is already existent with the cellular iPad, which is capable of running instant message and VoIP applications over the cellular network without the need to pay for phone or text messaging services. If smartphones were to follow this pricing process, AT&T wouldn't be banking as much money as they are right now.

With current technology pushing towards more data usage, if data-only smartphone plans were to become a reality in the future, cellular providers will likely find a way to bank off of the data caps to make up for their losses in phone and text messaging services. This could be very bothersome for the end-user. Even with modern phone and text messaging services being made available instead of VoIP services, a lot of smartphone users find it difficult to keep themselves within their small data caps. It would be even harder to remain within cellular data caps if VoIP services were to replace these services as the user would be eating through even more data per month to keep in contact with their friends and family.

Personally, I wouldn't mind the change if it ever came into reality. iMessage picks up the tab for a lot of my messaging, but it's always nice to have text messaging to fall back on when you're not texting an iOS device user or when iMessage fails. Even if the change came into effect, the phone and text messaging services likely wouldn't disappear from the face of the planet; they would probably just be purchased less by consumers.

Sources: AppleInsider

[dattguyy]

he looks like he's about to get hit in the face with that at&t logo...

[Roadw3]

Heck AT&T could just make data only plans charge 100 bucks for 5 gigs and unlimited for like 300 or 400.

[dtas2008]

My God, I do this NOW. There is no reason it should be offered as a legit option in 24 MONTHS! I use an iPad sim in an iPhone or Android and works great. And I'll do it too once iPhone goes LTE. Heck right now I'm waiting for a Gevey Ultra in the mail for my CDMA 4S jailbroken, just so I can use a Verizon LTE sim with $20 iPad data on 3G. Live in the now people! Focus!

[rcm]

This is guy is an idiot who doesn't not know how to run a company, they have no idea how to please their costumers and their stock holders at the same time, he is worst than a bank manager.

[Spiru]

I wouldn't say that. AT&T milks their customers now, with many more signing up everyday.

[steve-z17]

Randall Stephenson doesn't give a **** about his customers. He only cares about the $$$ coming in, even if that means he has to raise prices for data or screw the customer over in some other way. He's the last person we want running AT&T...

[RoloDiva13]

The most idiotic thing about what he's saying is that AT&T already did this less than a decade ago (back when they went by "Cingular")...I only remember Blackberries being able to add those plans, but sure as sh!t, yes they had data-only plans for smartphones. For him to talk about this now like it's some mystical white unicorn we should be on the lookout for in the next 2yrs is laughable (and sad).

FACT CHECK: there were non-RIM plans. Also Big Blue "retired" them as late as 2010 when they forced those customers to accept a voice plan. I guess someone figured why not squeeze another few hundred nickels outta ppl.

BTW: I'd never pay triple digits for a data-only plan. AT&T better hope folks don't recall that they only charged 40-90 for those data only plans before (depending on the allotment of data and if msgs were included) once they decide to offer them again (what's old is new!)

[vantheman169]

What a crock of SH*T! I hate these money grubbing corporations that only care about themselves and not the consumers. Makes me sick the amount of money they charge for data plans. I mean come on! I am paying $25 for 2GB which is fine cuz i barely even use 1GB. But thats besides the point. A data only plan will require unlimited, no doubt, and knowing these cell phone companies they will just rape people on the data only plans. We need UNLIMITED listen up CARRIERS! Especially with LTE coming out, with files, and pics, and videos getting much larger and better quality we need unlimited data or your LTE will be worthless!

[mannyp368]

Then they should greatly improve their ******* service like maybe a good 4g. *********!!

[larke]

300mb as a base plan is incredibly ridiculous, if the rumors that FaceTime will be able to be used over 3G/4G no one would be able to use it with current data structures, unless you're lucky enough to still have unlimited. Which they'll probably find some way to jew us out of that soon (no offense )

[sziklassy]

The most idiotic thing about what he's saying is that AT&T already did this less than a decade ago (back when they went by "Cingular")...I only remember Blackberries being able to add those plans, but sure as sh!t, yes they had data-only plans for smartphones. For him to talk about this now like it's some mystical white unicorn we should be on the lookout for in the next 2yrs is laughable (and sad).

FACT CHECK: there were non-RIM plans. Also Big Blue "retired" them as late as 2010 when they forced those customers to accept a voice plan. I guess someone figured why not squeeze another few hundred nickels outta ppl.

BTW: I'd never pay triple digits for a data-only plan. AT&T better hope folks don't recall that they only charged 40-90 for those data only plans before (depending on the allotment of data and if msgs were included) once they decide to offer them again (what's old is new!)

AT&T never went by Cingular. It was a separate company that was bought by AT&T. Hence AT&T didn't truly allow data only plans. They may have grandfathered Cingular plans once the Cingular name was removed.

The issue these companies are having are with subsidies. You basically need to be paying more than $30 a month for a subsidized iPhone to become profitable. Do that math. If AT&T is eating $400 on every iPhone they haven't even broken even half way through your contract. And remember, you are also paying for service. A lot of people take a cell phone contract and turn it into a "rent to own" agreement in their heads. That really isn't what this is.

[GenesisDH]

AT&T never went by Cingular. It was a separate company that was bought by AT&T. Hence AT&T didn't truly allow data only plans. They may have grandfathered Cingular plans once the Cingular name was removed.

The issue these companies are having are with subsidies. You basically need to be paying more than $30 a month for a subsidized iPhone to become profitable. Do that math. If AT&T is eating $400 on every iPhone they haven't even broken even half way through your contract. And remember, you are also paying for service. A lot of people take a cell phone contract and turn it into a "rent to own" agreement in their heads. That really isn't what this is.

Cingular was never 'bought up' in that it's parent companies (SBC and Bell South) merged and Cingular became a wholly owned subsidiary of SBC. In essence, at&t Mobility (which we call AT&T due to AT&T homogenizing the brand) did go by Cingular before the AT&T Corp acquisition. Cingular and AT&T Mobility are the same company.

Yes, Cingular/AT&T Mobility did/still do have data-only plans. There was LaptopConnect, which worked primarily on USB, ExpressCard, and PC Card setups. Those were not cheap ($60-80/month), required a contract and only the higher priced plans subsidized devices. Even though old LaptopConnect plans are no longer available, they reintroduced similar plans as 'BroadbandConnect' and 'DataConnect' and offered them with or without contract on many netbooks and tablets (including the iPad). The only thing that changed is that they can be prepaid and are not unlimited.

There were also PDA/BB data only plans as late as 2009 for RIM/Blackberry, WM, and PalmOS devices. They offered no voice (.40-1.00/minute if you decided to), and has options between limited data and unlimited data. They ranged around $50-$80/month & usually required a contract, but devices could be subsidized (mostly Blackberries).

Subsidies won't matter, since the carriers could just require and certain dollar amount minimum per month to discount the device. That's what they did with many netbooks (and EU carriers do for a discounted iPad). 'you want a cheap 3G netbook, pay $60/month or more for service and save $300 on the netbook.'

[bigboyz]

I don't feel bad for AT&T as they are worth billions. Not my fault they are paying $600 a phone..negotiate better. I've been saying this for a minute about data plan cost going up as voice becomes secondary. Im sure it won't be much longer when bills flip flop. Voice $25-$50 and Data $60-$100 or more. They are going to gouge us on whatever service we utilize the most, as they are a business. Not sure what fair has to do with it..corporations are known for greed and we fully support it. haha..i do love the pics you get of this idiot tho, always has some crazy look on his face and gleams of deceit and lies haha!

[RoloDiva13]

Cingular was never 'bought up' in that it's parent companies (SBC and Bell South) merged and Cingular became a wholly owned subsidiary of SBC. In essence, at&t Mobility (which we call AT&T due to AT&T homogenizing the brand) did go by Cingular before the AT&T Corp acquisition. Cingular and AT&T Mobility are the same company.

Yes, Cingular/AT&T Mobility did/still do have data-only plans. There was LaptopConnect, which worked primarily on USB, ExpressCard, and PC Card setups. Those were not cheap ($60-80/month), required a contract and only the higher priced plans subsidized devices. Even though old LaptopConnect plans are no longer available, they reintroduced similar plans as 'BroadbandConnect' and 'DataConnect' and offered them with or without contract on many netbooks and tablets (including the iPad). The only thing that changed is that they can be prepaid and are not unlimited.

There were also PDA/BB data only plans as late as 2009 for RIM/Blackberry, WM, and PalmOS devices. They offered no voice (.40-1.00/minute if you decided to), and has options between limited data and unlimited data. They ranged around $50-$80/month & usually required a contract, but devices could be subsidized (mostly Blackberries).

Subsidies won't matter, since the carriers could just require and certain dollar amount minimum per month to discount the device. That's what they did with many netbooks (and EU carriers do for a discounted iPad). 'you want a cheap 3G netbook, pay $60/month or more for service and save $300 on the netbook.'

Thanks GenesisDH. WELL SAID. It really pains me when folks comment on stuff they really know nuthin' about. However, u cleared that up pretty well.

[Nickaroni22]

Randall Stephenson is total D-bag, he doesn't give a damn about customers! He just tries to suck as much money as he can from att customers.

[confucious]

Thanks GenesisDH. WELL SAID. It really pains me when folks comment on stuff they really know nuthin' about. However, u cleared that up pretty well.

You're saying sziklassy doesn't know what they are talking about? I will have to revise everything I have learned from them then....

[Gopher_Otis]

Are you cracked out or something? Sprint's Simply EVERYTHING plan is only $150something a month. My plan (Everything Data) has 450 minutes, unlimited data, unlimited text, unlimited mms, unlimited roaming, SLP and Roadside Rescue for $102.97 a month. Screw being capped and throttled, and screw AT&T.

[kraziebone]

This is inevitable. We think about having 2 types of networks - data and voice. This means the cell phone companies are using a back end circuit switched network to handle the voice and a packet switched network to handle the data. Packet switched networks that handle the data can share the line between multiple users while circuit switched networks that handle the voice are required to have a dedicated line for every caller. The network infrastructure to handle a circuit switched network is much costly and requires more equipment. It only makes sense that as data speeds get faster and faster, they will eventually be used for everything, and not just "smart phones". Having a network based entirely on packets will be more efficient for cell phone companies as well as customers (it should be anyway). This is not a wild prediction by the AT&T CEO, it's simply an observation of where things are going

[edoriv]

300mb as a base plan is incredibly ridiculous, if the rumors that FaceTime will be able to be used over 3G/4G no one would be able to use it with current data structures, unless you're lucky enough to still have unlimited. Which they'll probably find some way to jew us out of that soon (no offense )

Jew us out is extremely offensive. And if you haven't been keeping up. AT&T is removing the unlimited plan even for those that still have it. Next iPhone upgrade will not be subsidized Unless you give up unlimited data.