In a somewhat surprising admission, AT&T’s CEO Randall Stephenson, at an investors conference in New York, said that data-only cellphone plans are inevitable, and that he expects them to arrive within the next two years.
While Stephenson didn’t say anything about AT&T offering such a plan, the industry is definitely heading towards a data only direction, and it’s just a matter of time until one carrier or the other gives in.
Stephenson’s words from the conference:
“I’ll be surprised if, in the next 24 months, we don’t see people in the market place with data-only plans. I just think that’s inevitable.”
Smartphone’s permanent web connectivity has given rise to a lot of alternative media of communication, some of which are much better than the traditional phone calls and text messages. People have in fact demanded data only connections since quite sometime, but till now carriers have only offered such plans for 3G/4G tablets.
The worst app on my iPhone is this thing called “Phone” where you have to speak synchronously with other humans.
— chris dixon (@cdixon) February 1, 2012
Assosicated Press’ report on the event notes that AT&T has been recording a decline in the average number of minutes used per month, presumably due to people using apps like iMessage, Skype, FaceTime over traditional voice calls. In fact, AT&T execs has gone on record saying that iMessage and other similar texting apps are eating into their messaging revenues.
The transition to data only plans would be a difficult one for carriers, since significant portion of their revenues presently come from phone calls and text messages. When the process of transition is underway, carriers might increase data rates to compensate for their loss of revenue from phone calls and texts.
Presently, AT&T is on its way to launch shared data plans which will allow subscribers to share their plan over multiple devices instead of buying a new one for each of them. Although the initiative might reduce the amount a consumer pays, AT&T’s CEO says that the company “is determined to make more money from the plans, not less.”
One of the ways AT&T’s planning to increase its revenue from data is by letting content providers pay for the data consumed on their portals or apps instead of directly charging users. Stephenson says that this idea would be tested next year.
While this might seem like a good idea at first, at least from a consumer standpoint, it would be disastrous for companies and organizations low on capital.
All we hope is that in the quest for compensating for their lost revenues, carriers don’t come up with absurd ideas.
[via Apple Insider]