Apparently Randall Stephenson, AT&T’s chief executive, feels that he made a mistake when he directed the company toward offering unlimited data plans. During an address delivered at the Milken Institute’s Global Conference this past week Stephenson discussed “the state of the wireless industry,” explaining that the ‘everything for one low price’ model means that those customers with lighter use are subsidizing those who consume large amounts of data.
Without those unlimited data plans, those using the data would be the ones paying for it.
Stephenson discusses his feelings further, by explaining:
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.
But there are bigger problems brewing with AT&T (and other mobile providers who will be experiencing similar forces affecting their offerings). Existing profit centers are disappearing. Where once there was a lot of money to be made in things like pay-for-use text messaging, now Apple has introduced iMessage (free between iPhones and iPads) and every smartphone can run popular instant messaging clients which are also free to use (for the most part). While some of these new features use data and require bandwidth, most people are docking on WiFi networks a good portion of the time and not always using data plans anyway.
Stephenson admits that he is prone to lying awake at night and worrying what will next disrupt his business model –and most signs point to services like Skype that will lessen the need for people to make actual telephone calls with their devices as well.
It is difficult to feel sorry for these big companies who should have seen this evolution coming from the proverbial mile away; ‘compete or face extinction’ is the mantra they should start repeating.
For those of you who are lucky enough to have a grandfathered unlimited data plan, hang on tight and don’t make any changes!