Shared Data, New Mobile Services Key to Customer Growth, AT&T Mobility’s Ritcher Says
AT&T believes it can attract new customers -- and keep its existing ones -- because of its Mobile Share shared-data plans, as well as new opportunities in home automation and connected car services, said AT&T Mobility Chief Financial Officer Pete Ritcher Wednesday at a Deutsche Bank investor conference. More than two-thirds of the carrier’s smartphone subscribers -- 31.7 million -- are on tiered data plans like Mobile Share, he said. AT&T said 6.6 million subscribers were on Mobile Share plans as of Q4 (CD Jan 28 p19). Subscribers on Mobile Share plans will likely “buy bigger buckets” of data over time, Ritcher said. “As the usage grows on those devices … then we have an ability to build and sort of capitalize and grow our data revenues that are associated with that,” he said. AT&T hopes to increase revenue from each user on those plans as they begin to upgrade from smartphones using 3G technology to ones that utilize LTE, Ritcher said.
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The carrier also hopes to encourage more of its users to buy tablets that can connect to their data plans rather than buying Wi-Fi-only devices, Ritcher said. AT&T offers a $100 rebate on tablets to customers who agree to put the device on a two-year data plan contract. Ritcher said he doesn’t believe AT&T will keep the rebate in place permanently, but said the carrier is leaving the promotion open-ended, Ritcher said. “We'll continue to sort of re-evaluate it,” he said. “We're trying … to sort of bridge that gap and get people to experience the benefits of having that connected to our network and then not be sort of tied to Wi-Fi hotspots.” Apple iPads that have mobile connectivity cost $130 more than Wi-Fi-only models, which Ritcher said “doesn’t make sense … based on the components that go into it.” AT&T is “hopeful and encouraged” that the price gap will decrease to a point where subsidization will no longer be necessary, he said.
AT&T also sees possibilities for growth in offerings like its Digital Life home automation service, Ritcher said. Digital Life will be available in eight markets this month and will expand to 50 markets by the end of the year, he said. The carrier also believes it has opportunities in connected car services; its analysts believe more than half of all new cars made in 2016 will have “some sort of connected opportunity associated with them,” Ritcher said. “We feel that we're very well positioned in that area being in the sort of driver seat, if you will.” General Motors (GM) recently said AT&T will replace Verizon Wireless as the mobile broadband provider for its OnStar services and a new suite of mobile entertainment services starting with most 2015 models of GM’s Buick, Cadillac, Chevrolet and GMC vehicle lines (CD Feb 26 p12).
The carrier expects to also see stronger competition between smartphone operating systems after years of dominance from Google’s Android and Apple’s iOS, Ritcher said. AT&T has been “very supportive” of Microsoft’s Windows Phone, but “it’s a sort of a totally new platform coming in,” he said. “So it’s obviously going to take some time in order to ramp up.” The carrier is also “anxious to see what happens” with BlackBerry 10, Ritcher said. “We know that’s a platform that had quite a following at one time, still has quite a following and that we hope to see that” with the new platform as well, he said.