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AT&T CEO Stephenson: Unlimited data was a mistake

Posted: , by Alan F.

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AT&T CEO Stephenson: Unlimited data was a mistake
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.

"I remember asking the question: Are we investing in a business model, are we investing in a product or are we investing in Steve Jobs? The answer to the question was, you’re investing in Steve Jobs. Let’s go after this thing. And we went after it, and the rest is history."-AT&T CEO Randall Stephenson
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.

source: NewYorkTimes via Electronista

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posted on 05 May 2012, 04:02 8

1. Bluesky02 (Posts: 1439; Member since: 05 Dec 2011)

There was a Cingular in Need for Speed Underground 2, was it that AT&T?

posted on 05 May 2012, 04:30

2. abhishekrocks (Posts: 6; Member since: 19 Apr 2012)

i was thinking the same

posted on 05 May 2012, 04:56 19

3. GuiltyBystander (Posts: 199; Member since: 05 Mar 2012)

Randall Stephenson was a mistake.

posted on 05 May 2012, 09:46 7

18. tedkord (Posts: 11927; Member since: 17 Jun 2009)

Not just as in AT&T should have never made him CEO, but as in his mother should have squatted over a dumpster when her water broke. Every time this over privileged, under talented, whiny little turd talks, I wish someone would punch him in the throat.

posted on 05 May 2012, 12:55 1

29. Droid_X_Doug (Posts: 5993; Member since: 22 Dec 2010)

It seems like Stephenson has an incurable case of sour grapes. I wonder how long before AT&T's Board of Directors realizes his case of sour grapes is not serving the company and it is time to find another CEO?

posted on 06 May 2012, 13:48

58. crysiswarmonger (Posts: 78; Member since: 06 Feb 2012)

Randall whined "u guys are running my plans to make billions in collusion with other phone companies to rip u all off on sms text. i am too stupid to know how to make this work..."

tired of these morons running companies

posted on 05 May 2012, 05:15 5

4. Phullofphil (Posts: 801; Member since: 10 Feb 2009)

Well be that as it is there is probley tons of other stuff that can be done to get more money out of the consumer. I am pretty sure they were making alot of money back than and they would now without tiered plans. They through big numbers out there like oh wow such a big numbers. It's all smoke and mirrors. The guys admitting all he wants to do is make more money not provide better service. While that's a givin you don't admit that and realy you need to start widening the band width becaus sooner rather than lator 5gb of downloading a month is not gona do and the company that does start offering what the consumer wants will eventually go to that company. For one thing how can Verizon for instance say there gonna run out of 4g bandwidth soon but than lease some of it away. It's the same for other situations. Where does cricket get there's from. It's alot of smoke and mirrors and they do try to get us believing about as much as they can. There is probably is not a bandwidth problem out there just like the electricity scam about ten or so years ago that caused the brown outs in California wich mad the price of electricity go sky high making tons of money for power company's.. Wich Enron I believe was apart of. There was atliest three large aluminum companies in my area that stopped making aluminum because they ought the power and a set price over a certain amount of years and it made more money selling the power back than from making aluminum. Thos companies are long gone now by the way. Heck google does not even sell a product and makes tons of money. I realy think AT&T and alot of companies make poor decisions or siphon way to much money out of the companies in wich they do get tax breaks and then the consumer pays the bill. Getting of track here but. I really can't wait till a company comes along and offers the data we need. Wich i think somthing like a huge network of wifi hotspots that blanket a town can be a place to get bandwidth. I realy do think this bandwidth thing is a scam.

posted on 05 May 2012, 09:08 2

10. ontapbjt (Posts: 1; Member since: 05 May 2012)

No, the bandwidth thing is not a scam. I live in a small rural town where up until a year ago I had some semblence of 3G data service, albeit a bit slow. At that point it all went downhill. Why? The influx of data users on the network. The existing towers can't handle the amount of data that is being used. Today I barely get dial-up speeds for data. In fact it averages less than 28kbs download speeds. Verizon knows about it and they are going to have to spend money to upgrade the towers. Money, by the way, that doesn't grow on trees. It would be really nice if every corporation in America had a printing press so that they could just print money and give stuff out for free, like the government (not free, we are all paying). Free cellphones, free data, free healthcare. Shame on those bastards at AT&T for trying to turn a profit.

posted on 05 May 2012, 09:13 6

12. remixfa (Posts: 14255; Member since: 19 Dec 2008)

lol, none of that is free. they steal from the people that work and give to the lazy asses that refuse to.

posted on 05 May 2012, 09:36 5

17. Non_Sequitur (Posts: 1111; Member since: 16 Mar 2012)

Exactly, remix. When what ontapbjt says happens, the country turns to communism. Some people work hard, but still get the same amount as those who don't. Then everyone refuses to work and country go boom.

posted on 05 May 2012, 10:16 7

20. tedkord (Posts: 11927; Member since: 17 Jun 2009)

No, shame on AT&T for not building out their network while making billions in profit a year. Shame on them for relying on a duopoly creating merger to add bandwidth, and lying to the government and public about the job creation from such a merger. And, shame on them for guaranteeing T-Mo $4 billion if the deal didn't go through - that is enough to show that Stevenson isn't qualified to run a major corporation. Anyone with half a brain knew this wasn't going to be an easy sell, and would most likely be squashed.

posted on 05 May 2012, 13:08 1

30. remixfa (Posts: 14255; Member since: 19 Dec 2008)

well, the 4 billion is a saftey net to make up for lost customers during the pre-merger. Business DROPPED like a rock when people thought we were turning into ATT. Its amazing how many people out there hate ATT, but yet stay with them.

posted on 05 May 2012, 11:47 1

24. chadrick0814 (Posts: 209; Member since: 23 Nov 2011)

I'm not sure "free" data was mentioned. I believe "unlimited" data plans that are paid for by consumers are the topic. I also believe the healthcare system mentioned is done by purchasing through private insurance companies. In fact, it will probably be unconstitutional because of individual mandates forcing people to BUY it....making it not free. But hey, don't let facts get in the way of good propaganda.

posted on 06 May 2012, 01:40

50. Forsaken77 (Posts: 553; Member since: 09 Jun 2011)

He's was talking about spectrum, but just mistakenly called it bandwidth instead. You're talking about tower capacity, which is totally different. That has nothing to do with spectrum allocation. Being you live in a really rural area, there's probably like 2 towers feeding your whole town; and those towers weren't allocated alot of bandwidth because the number of users in your area is so small. When the user amount goes up (read: the complaining to cell carrier increases) then they'll eventually get their slow asses out their and upgrade it.

posted on 05 May 2012, 09:11 3

11. thedarkside (Posts: 654; Member since: 30 Apr 2012)

a lot* x3
throw, not through
going* x2
which* x4
at least*
really* x2

you get an F, for failure.

posted on 05 May 2012, 06:36 7

5. JeffdaBeat (unregistered)

I can usually gauge when I regret something by one thing...was I leaning one way or another when it came to that decision. I don't think this is something that he should regret at all.

Despite what people may think, there were smartphones before the iPhone. There were many smartphones before then and they all ran on unlimited data. But somehow they were able to exist without breaking down any of the networks because usage wasn't that high. Even when the original iPhone debuted, data consumption was somewhat low. The iPhone held its ranks amongst Blackberrys, Palms, and Windows Mobile devices. It wasn't really until the iPhone 3G and more directly, the iPhone 3GS that AT&T started seeing people gobbling data down like they were at a buffet. No one could have predicted that given the same functions (other than HTML browsing) that people would change this dramatically.

But even if someone whispered in Stephenson's ear telling him the future, AT&T would have been murdered by angry customers. Back then, we were nowhere near ready to hear about tiered data plans. Verizon, Sprint, Alltel, and T-Mobile would have scoffed at AT&T. And I'm not sure people would have stood for it either. Remember, back then everyone didn't have an iPhone. It wasn't until we went through the congestion and obvious data lag that we understand why tiered pricing is desired by AT&T. And although we hate it...we understand.

I wouldn't regret the unlimited plan because back when the decision was made...whodathunk the iPhone would change everything when it came to data consumption?

posted on 05 May 2012, 09:16 7

14. remixfa (Posts: 14255; Member since: 19 Dec 2008)

back when unlimited plans were the norm, the average user used less than 500mb a month by far. Blackberrys, the common smartphone, were set up for low data usage through the way they did email and the compressed browser. Its hard to get a BB to hit 1 gig of usage without streaming pandora all the time.. even today.

That definitely changed with the iphone and it had a large effect on data.. but not nearly as much until android's rise. there was a lot of data congestion from app downloading and such, but android's full browser is a data killer. Users love it, providers hate it.

posted on 05 May 2012, 11:02 4

21. thedarkside (Posts: 654; Member since: 30 Apr 2012)

some 95% of people use less than 2GB a month of data, thats why AT&T and verizon both got rid of it. i on the other hand will not leave AT&T because i still have unlimited data and i use like 7GB a month, because im awesome.

posted on 05 May 2012, 13:08 3

31. remixfa (Posts: 14255; Member since: 19 Dec 2008)

and how much does that plan cost? lol

I use between 7 and 15 gigs a month, but im on a true unlimited plan too. :)

posted on 05 May 2012, 14:23 1

36. thedarkside (Posts: 654; Member since: 30 Apr 2012)

lol im surprised taco hasnt trolled this section of the feed.

posted on 06 May 2012, 09:35

54. good2great (Posts: 1042; Member since: 22 Feb 2012)

this is ridiculous!! 7 to 15 gbs??? how? why? you guys ever heard of wifi? haha damn thats tons of data...

netflix for cell phones is old news thats what you have a tablet for man...

i'm with sprint and i barely reach 1gb of carrier data all my gb's are used thru wifi...

posted on 06 May 2012, 14:13

60. thedarkside (Posts: 654; Member since: 30 Apr 2012)

my dad is a wifi nazi and wont give me the password to the modem we have. and i jailbroke my iphone and made it a wifi hotspot and used it to play xbox live. thats how ive hit 15gb+.

posted on 05 May 2012, 15:00

37. freshprince130 (Posts: 5; Member since: 07 Nov 2009)

or do you use 7gb of data becuase you are a pussy repellant...instead of spending so much time using a phone use some comunication skills and go on a date

posted on 05 May 2012, 15:11 3

38. remixfa (Posts: 14255; Member since: 19 Dec 2008)

wow, way to stereotype users. geek is the new hunk.

i use that much because i stream all my music through Gmusic, keep everything.. everything synced, and use netflix a lot when im bored.

posted on 05 May 2012, 15:28 1

41. thedarkside (Posts: 654; Member since: 30 Apr 2012)

lol. freshprince... silly troll, i have excellent communication skills, in fact i go out every night with my friends. i think i use 7GB of data because i like to download music and watch a few shows of netflix before i sleep with your mother every night.

posted on 05 May 2012, 18:34

48. freshprince130 (Posts: 5; Member since: 07 Nov 2009)

I sold them..I know how ppl use them sleep away with a corpse necromancer!...and calling someone a retard... d**ksore i mean tedkord:pretty disrespectful to people who have family that has learning disabilities i.e.yours

posted on 06 May 2012, 10:46

55. thedarkside (Posts: 654; Member since: 30 Apr 2012)


posted on 06 May 2012, 14:04

59. thedarkside (Posts: 654; Member since: 30 Apr 2012)

i think its funny how you went and made fun of us, then went ahead and said it was disrespectful. you have to be the biggest form of butt nuggetry i have ever witnessed. idiot.

posted on 05 May 2012, 15:31 1

42. thedarkside (Posts: 654; Member since: 30 Apr 2012)

yeah freshtroll, you should probably learn how people use their phones before you get on your pony and try to knock on people.

posted on 05 May 2012, 16:03 1

43. tedkord (Posts: 11927; Member since: 17 Jun 2009)


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