AT&T’s chief executive dropped a bombshell on iPhone users: he regrets making unlimited data plans for the Apple device.
Rather, CEO Randall Stephenson told a conference in Los Angeles this week, heavy data users should have paid for what they were using, and light users should have paid less, rather than having the light users subsidize the heavy users.
“My only regret was how we introduced pricing in the beginning,” Stephenson said at the Milken Institute’s Global Conference Wednesday. “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 the unlimited plan was nixed in 2010, and replaced with a tiered data coverage options. In a New York Times report, Chief Executive of AT&T Mobility Ralph de la Vega said 70 percent of individuals on tiered data plans paid for one of the more expensive options.
Despite some regrets, Stephenson said he doesn’t regret supporting the iPhone. He recalled the board was initially nervous about the pairing: “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 is doing pretty well ($6.1 billion in mobile data revenue last quarter). But Stephenson admitted free messaging services such as Apple’s iMessage that are already tapping into the company’s revenue. He also mentioned Skype as a potential threat to AT&T’s offerings.