AT&T CEO Confirms Tiered Plan Pricing to Be Inevitable, Company Will Retain 3G Network for Time Being
Date: Wednesday, March 3rd, 2010, 05:25
AT&T executives stated recently that the wireless industry will likely eventually charge bandwidth-heavy users more for their data plans than those customers who use networks more sparingly, but added that the company in no rush to roll out its next-generation technology.
Per MarketWatch, the comments came as part of a broad presentation by AT&T Chief Executive Randall Stephenson to investors attending a Morgan Stanley conference in San Francisco on Tuesday, in which he stated his belief that most early adopters of Apple’s soon-to-ship iPad device will largely rely on WiFi instead of purchasing another 3G wireless plan.
It’s going to be “interesting to see the customer reaction to the iPad,” he said, answering investors’ concerns that yet another popular Apple device could further strain its 3G network in congested major metropolitan cities like New York. “We think it’s going to be a largely WiFi-driven product.”
Stephenson reemphasized AT&T’s commitment to continue strengthening its 3G network by pouring millions into backend technology in regions where customers have experienced the most problems. He added, however, that another safeguard against over-saturation could see the carrier eventually adopt a new metered pricing model that will charge its bandwidth-guzzling customers more than those who make more modest use of its network.
In an update on AppleInsider, AT&T spokesman James Carracher clarified Stephenson’s comments, which were meant to portray where the CEO thinks the wireless industry as a whole is headed and offered the following:
“For the industry, we will progressively move towards more of what I call variable pricing. The heavy consumers will pay different than the lower consumers.”
The remarks could rekindle speculation that tiered iPhone 3G data plans may be on the horizon. Rumors to that end first surfaced in an research report from Kaufman Bros last February but only gained widespread attention when AT&T consumer services chief Ralph de la Vega later seconded the notion during a UBS investment conference in December.
More specifically, he cited statistics as revealing that 40% of AT&T’s network capacity is used by just 3% of smartphone users, adding that it’s inevitable that those high-bandwidth users will be charged for what they use. Following public outcry over the matter, AT&T spent the next week attempting to cool rumors of tiered iPhone data pricing, with de la Vega clarify his comments to suggest the carrier would instead begin offering incentives to users to “reduce or modify their usage.”
In other revelations Tuesday, Stephenson confirmed that the iPhone will remain a staple of AT&T’s business for “quite some time,” but stopped short ruling out the possibility that rival carriers could also begin carrying the device stateside. He also said AT&T is in no hurry to push out its 4G network, which is based on technology referred to as LTE or Long Term Evolution.
Although its LTE network will greatly broaden its wireless pipelines and provide customers with much faster download and upload speeds, the carrier reportedly believes its existing 3G network is ‘sufficient to handle data traffic for the next few years.’
“We’re not in a tremendous hurry on LTE,” he said. Instead, the carrier doesn’t plan to begin rolling out the next-gen technology until 2011, before taking it mainstream in 2012.