AT&T Inc. CEO Randall Stephenson sees a lot of wireless pricing experimentation in the industry's future, including a data-only option within the next two years.
Speaking at Sanford C. Bernstein & Co. Inc. conference Friday morning Stephenson applauded AT&T for moving the market to usage-based pricing and hinted at more changes still to come. He called data-only pricing plans inevitable as a response to revenues moving from voice to data. For consumers, these plans would let them rely on voice-over IP and other over-the-top apps for calling and texting. (See Verizon Wireless Brings Unlimited Users to Tiers and Tekelec Plays Mediator for Operators & Apps.)
"I don't think we'll see a big flash cut, but you'll see that propagate into the marketplace," Stephenson said, citing a 24-month time frame.
In the nearer term, he said AT&T will be experimenting with apps-based pricing and data buckets in which a customer could use his smartphone data plan on his tablet as well. Right now, he said, most of AT&T's customers that have tablets are not using their wireless plans, which is something the carrier is focused on changing. (See Creative, Confounding Wireless Bills , The Carrier Creep Factor and New Data Plans Keep It in the Family .)
"We've gotten good at managing our way through these transitions," he said. "We're not focused on family plans; it's connecting the next device. ... If you make that simple, it's a lift, not a deterioration."
Stephenson stressed that pricing changes, namely increases, are being driven by a spectrum shortage in the industry. When capacity is constrained, prices go up, he explained -- it's Economics 101! Not surprisingly, he sees the solution to this problem as more industry consolidation, but he also doesn't see that happening given the "painful" regulatory process AT&T went through with its attempted T-Mobile USA takeover. (See AT&T Drops Bid to Acquire T-Mobile, AT&T's Prices Go Up, Up, Up! and AT&T Blames FCC for Price Hikes.)
"There's probably only one thing that will help mitigate the pricing and rationing and it's more spectrum brought to market," he said, citing a favorite line of wireless chiefs.
â€” Sarah Reedy, Senior Reporter, Light Reading Mobile