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AT&T CEO Randall Stephenson
AT&T Chief Executive Officer Randall Stephenson speaks up about iPhone woes

AT&T Chief Executive Officer Randall Stephenson said he loses sleep over iPhone-related regrets, such as early AT&T pricing models for the smartphone and new messaging services like iMessage.

AT&T managed to get its hands on the iPhone when it first came out in 2007. The carrier offered unlimited data plans, where iPhone users could pay $30 per month for all the data they could want. In 2010, AT&T axed the unlimited option and switched to tiered data plans, which limits the amount of data used and places hefty costs on larger plans.

According to Stephenson, who shared his opinions on the wireless industry at the Milken Institute's Global Conference last week, initially offering an unlimited plan for the iPhone was a big mistake because of heavy data users not having to pay for all the extra data they ate up. Instead, light data users had to financially support the heavy ones.

"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," said Stephenson. "And it's a variable cost model. Every additional megabyte you use in this network, I have to invest capital."

While regrets still linger about the use of unlimited plans, Stephenson also has a current worry that keeps him up at night: Apple's iMessage service. 

The iPhone's iMessage service is free and Internet-based, allowing users to instant message one another in a way that is similar to BlackBerry Messenger (BBM), yet offers an alternative to a carrier's texting package. Text messaging is a big part of AT&T's tiered plans, where users pay extra for a larger allotment of texts.

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

While iMessage is a service that only allows Apple users to message other Apple users, Stephenson's concerns about the chat service are legitimate. A recent study from independent mobile analyst Chetan Sharma said that talking and texting on mobile phones is on the decline as data skyrockets.

Despite Stephenson's worries, AT&T is doing pretty well for itself. Last quarter, it reported $6.1 billion in revenue from mobile data. However, the carrier has had some issues lately with throttling unlimited data users after only 1-2 GB. AT&T said its contracts always stipulated data throttling, but eventually, the carrier raised the throttling threshold for unlimited plans after losing a case in a California small claims court. AT&T decided to raise the threshold to 3 GB for customers on unlimited 3G data plans, or 5GB for unlimited LTE.

Source: The New York Times





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