AT&T: Unlimited Data Plans Were a Mistake
Randall Stephenson, the AT&T CEO, indicated that his company is regretting the decision to offer unlimited data plans when the original iPhone was released. He did credit Apple’s smartphone as a trigger to shift the paradigm toward higher data consumption, but he believed the company should have implemented tiered data plans right from the start. When the iPhone was released, AT&T allowed users to get as much as data as they could get with just $30. Stephenson explained that for every additional MB subscribers use in AT&T’s network, the company needs to invest more capital. After the iPhone exploded in fame, AT&T was only able to build its network slowly. Stephenson revealed that in San Francisco area alone, it took multiple years to cover the area with new towers, as most of the time and effort spent were related to permit and zoning issues.
Stephenson is also concerned with free texting plans that are being offered by competitors. Text messaging is still growing within the US, but carriers may lose some money with the service as they are facing competition from social networks, such as Twitter and Facebook. He said that today, executives of cellular providers are constantly worrying about the emergence of new technologies that can disrupt their business model.