ATandT CEO Says Variable Network Pricing on the Way
AT&T CEO Randall Stephenson said he expects Apple iPad users to rely heavily on WiFi. As for those data-gobbling customers straining its 3G network, including Apple iPhone customers, AT&T is looking at new pricing models based on usage.AT&T is the latest carrier to warn that the days of all-you-can-eat data plans are coming to an end. At the Morgan Stanley Technology, Media & Telecom Conference March 2, AT&T CEO Randall Stephenson said the carrier was considering different pricing plans for different platforms, charging the heaviest users the highest fees.
"For the industry, we'll progressively move toward more of what I call variable pricing so the heavy consumers will pay more than the lower consumers," Stephenson said.
While users of the Apple iPhone- which AT&T is the exclusive U.S. provider of - have been the main data-gobbling culprits, straining AT&T's network most notably in New York and San Francisco, Stephenson doesn't expect the Apple iPad, which AT&T will begin offering in March, to offer anywhere near the same strain.
iPad users will be more likely to rely on WiFi connectivity, said Stephenson. "My expectation is that there's not going to be a lot of people out there looking for another [service] subscription," he said.
Despite the pressure AT&T's network is under from iPhone users, Stephenson said the device will remain an "important part" of the AT&T lineup for quite some time. He did not disclose how long AT&T will have exclusive rights to the two Apple devices.
However, AT&T and competitor Verizon Wireless have 4G LTE networks in development, which each is rolling out at great cost. The new, faster technology, combined with applications such as Skype, which each carrier has said it will support over its data network, create further reasons for the carriers - which have until now wooed customers with flat-rate deals - to make consumers now more appropriately pay for what they use.
Stephenson said that AT&T is considering new pricing models for non-phone products, such as the iPad, and including tablets and e-readers. The new plans would, instead of traditional monthly service fees, rely on event-based pricing or pre-paid models.
Stephenson's full speech is available as a Webcast here.