Offering unlimited data plans was a mistake
according to AT&T's CEO Randall Stephenson. The executive was speaking at the Milken Institute's Global Conference earlier this week when he made the comments, according to the New York Times
. Stephenson said that the early unlimited data plans were "a regret
," and the carrier should not have let light data users subsidize heavy users. On the other hand, offering unlimited data plans just might have enticed customers into buying smartphones.
Stephenson also brought up messaging systems like iMessage that bypass a phone's SMS system. Carriers currently make money from consumers use of text messages and using low-cost "overhead" bandwidth for SMS messaging allows them to have huge margins. Addressing the crowd at the Conference, Stephenson said, "If you're using iMessage, you're not using one of our message services right? That's disruptive to our messaging revenue stream." The CEO admitted to staying up at night, worrying that social networking services like iMessage, Skype and Facebook will disrupt AT&T's business model
. Although still popular, texting is beginning to slow down in the States
Stephenson even allowed for a nostalgic look back at Cingular's decision to support the Apple iPhone
. Stephenson was Chairman of Cingular at the time and the company eventually became AT&T. The carrier's CEO, Stan Sigman, was due to meet with Steve Jobs. After meeting Jobs, Sigman told Cingular's board about a "unique opportunity
" and while Sigman had not even seen a photo of the iPhone at that time, he described a touchscreen phone that would make calls, do email and run apps
AT&T discontinued unlimited plans in 2010 and replaced it with tiered data plans
. So far, the move has been a positive one for the carrier as the company reported $6.1 billion in revenue from mobile data alone in this year's Q1
. Ralph de la Vega, chief executive of AT&T Mobility, said that 70 percent
of the people on tiered data plans were paying for the more expensive options during the first quarter.