AT&T CEO envisions data-only plans within two years

By on June 1, 2012, 3:30 PM

With today’s advanced smartphones, it’s hard for some to believe that there was a time when a cell phone’s only function was to make phone calls. That function obviously still exists as part of handsets today but if AT&T CEO Randall Stephenson’s vision of the future is correct, we should expect to see data-only plans emerge in the industry within the next two years.

Stephenson made the prediction during an investor conference in New York, where he noted that he’d be surprised if we don’t see people in the marketplace offering data-only plans in the next 24 months.

Such a scenario would categorize phone calls and text messages as another form of data, although it’s unclear just how much “data” a typical call or text would consume. He’s so confident in this shift that he called it inevitable.

Smarphone users in the know are already able to circumvent minute and text messaging plans through third-party applications like Skype and Talkatone that use data instead of cell minutes or counting towards a text allotment. Recent hikes in data plan charges and the mass dismissal of unlimited data plans are further evidence that many smartphones are primarily used as pocket computers instead of calling devices.

The Associated Press says that analysts feel such plans are the next logical step in wireless but they also note that wireless providers make the majority of their money from calling and texting plans, both of which they claim use very little data.




User Comments: 11

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Vrmithrax Vrmithrax, TechSpot Paladin, said:

So, just to recap: A businessman whose company is increasingly concentrating on aggressive limitations, caps, and monetizing of their data services, consults his crystal ball and determines that those data services will be in high demand in the near future. I'm sure there is absolutely no bias or self-centered skew to his viewpoint whatsoever...

How is it that a company, who regularly blames things like limitations in bandwidth for the (sometimes exorbitant) increases in their data fees, can turn around and state that data-only wireless is the future? Seems a tad hypocritical to me.

wiyosaya said:

<p>So, just to recap: A businessman whose company is increasingly concentrating on aggressive limitations, caps, and monetizing of their data services, consults his crystal ball and determines that those data services will be in high demand in the near future. I'm sure there is absolutely no bias or self-centered skew to his viewpoint whatsoever...</p>

<p><br /></p>

<p>How is it that a company, who regularly blames things like limitations in bandwidth for the (sometimes exorbitant) increases in their data fees, can turn around and state that data-only wireless is the future? Seems a tad hypocritical to me.</p>

Have to agree with you. IMHO, that carriers claim they don't have the bandwidth, then as Verizon has done, release a broadband service that operates on its 4G network, are yelling lack of bandwidth so they have a deceptive excuse to charge higher and higher rates.

Besides, while they are not for smart phones, many carriers, including AT&T, have data only plans already for USB wireless modems. IF it were reasonably priced and IF it had no limitations to the amount of data I could download in a month, I would already be subscribing.

lawfer, TechSpot Paladin, said:

Except you two (the above comments) don't know what you're talking about. Carriers don't claim they don't have bandwidth, but that they don't have spectrum. Not the same thing. Although my interest is not to defend AT&T, I tend to look at the broader picture.

Granted AT&T is a business out to make money, and while I won't talk about their business practices and structure, I'll just talk about the reasoning as to why the CEO thinks data will become that important. It is simply because with the full deployment of LTE spectrum, and launch of LTE-capable devices, there will no longer be any need for texting/voice plans that depend on pay-per usage rather the actual consumption.

Teenagers, for instance, are using services such as BBM, iMessage, WhatsApp, etc. for their text-based communications "needs". Social networking plays another major role in there too.

Also add that people will progressively stop using their voice plans to make calls and instead use services like Skype, FaceTime, Google Voice, Tango, etc. In actuality most use these services to talk with their loved ones overseas as a way to not incur those ridiculous roaming charges associated with regular voice plans.

It's understandable to conclude with this new "app" thing and smartphones and operating systems and what have you, that services previously primarily provided by carriers will become services either pre-loaded as apps in the smartphones they sell, or will, inevitably, become integrated into the actual phones. Kind of what Microsoft plans to do by integrating Skype into Windows Phone's phone mechanism.

Whether AT&T capitalizing on this new market trend is a bad business practice or not is another debate. But that the CEO of the largest and most profitable telecomm company in the world is predicting such an evident market change shouldn't be a surprise.

Vrmithrax Vrmithrax, TechSpot Paladin, said:

Heh, don't get me wrong, lawfer... I never said I disagreed with the inevitability of data plans being king - I'm a huge proponent of ubiquitous high speed data connections everywhere, and regularly use messenger services and voip for mobile communication. I just found it rather odd that the CEO of a company that acts like data plans are either an inconvenience or a cash cow (depending on the day) is the one heralding the coming voice-pocalypse. They have been regularly beating down the consumers with data caps, tiers, and relative increases in data costs... Yet expect the world to flock to those same abused plans. Just came across as a bit ironic, to me. A bit like constantly beating someone with a stick, yet expecting them to continue to cower at your feet rather than run away.

Tygerstrike said:

Well all the major carrier reps I deal with tell me the same song and dance. Some services that they no longer offer are eating some of their spectrum. And they are always doing some form of repair or upgrades on tower equipment. So the fact that a AT&T mucky muck has predicted it, means it has been in the works for a few months. More then likely we will see a lot of spectrum open up after 4G gets completly rolled out to everyone.

IAMTHESTIG said:

Brilliant! Force customers who just want basic voice service to get into a unSmart phone with a outrageously over priced data plan. Not only is it not needed but these wireless carriers keep adding more and more users onto it. Somehow I doubt their backbone infrastructure can keep up and users will start getting slow internet access during peak hours. This is already happening anyway!

Greedy jerks... guess grandma and grandpa wont be able to keep that basic phone for long!

Guest said:

all I typically use is data on my 3gs... magic jack app + texting....

Guest said:

couldn't YOU just decide what to get? no one forces you to get anything.

lawfer, TechSpot Paladin, said:

<p>Heh, don't get me wrong, lawfer... I never said I disagreed with the inevitability of data plans being king - I'm a huge proponent of ubiquitous high speed data connections everywhere, and regularly use messenger services and voip for mobile communication. I just found it rather odd that the CEO of a company that acts like data plans are either an inconvenience or a cash cow (depending on the day) is the one heralding the coming voice-pocalypse. They have been regularly beating down the consumers with data caps, tiers, and relative increases in data costs... Yet expect the world to flock to those same abused plans. Just came across as a bit ironic, to me. A bit like constantly beating someone with a stick, yet expecting them to continue to cower at your feet rather than run away. </p>

And I never said you explicitly said you disagree with the inevitability of data becoming a core service plan fro future devices. I seem to have said that, your comment expressing disbelief regarding AT&T's CEO's prediction, absolutely disregards the very reasoning you find both inevitable and plausible (one that AT&T's CEO also shares): the inevitability of data becoming an ubiquitous service plan.

Thanks for agreeing with my argument.

P.S. That analogy is not proximate to the context. What you say would be accurate if, in your analogy, you'd come specifically to me knowing I have a stick in my hand, and willing to take a beating.

No one forces the terms on people. This is actually a good segue to show you a misconception:

Brilliant! Force customers who just want basic voice service to get into a unSmart phone with a outrageously over priced data plan. Not only is it not needed but these wireless carriers keep adding more and more users onto it.

People go <I>to</I> AT&T, Verizon, Sprint, T-Mobile, etc. Not the other way around. When you walk out of a store, you know precisely what you are getting yourself into. Not only is what they are supposed to do, but what they are legally bound to do.

Another reason why his point is moot, is because you can change your device within 30 days for AT&T, and 14 days for the rest of carriers. That means no one bought a phone they didn't need and never returned if they didn't like, or is in a plan they cannot afford that they can't change.

Ultimate point being is, AT&T or any other carriers are beating nobody with a stick. The analogy would make sense if I signed up a contract to pay $30 of data, but AT&T upped that up $5 every month until the end of the contract, and still expected me to pay and not go with a competitor. That's not the case not only because even if AT&T changes their tiers, YOUR plan doesn't change (it's called a contract for a reason; it works both ways), but because that would be illegal.

Again, I'm not defending anyone. We can agree data could certainly be cheaper. But I find calling AT&T and the other carriers "greedy jerks" for telling customer A they are going to pay X amount, and customer A <I>agreeing</I> to pay X amount for a 2 years as rather childish. Now whether X amount could be lower, for sure, but that's another topic.

Tygerstrike said:

@Lawfer

You are correct on a point there. When you get a new phone either through an upgrade or a new line of service, you know exactly what you are getting into. Most times the longest part of a cellphone transaction is the explaning of what the customer has to pay, what they get for what they pay, and what their phone can and cant do. Its just sad because most ppl are to damn lazy to go back to a store and get a new handset. They would rather just complain and play the victim, instead of owning up to the fact that they were just lazy or forgetful.

wiyosaya said:

<p>Brilliant! Force customers who just want basic voice service to get into a unSmart phone with a outrageously over priced data plan. Not only is it not needed but these wireless carriers keep adding more and more users onto it. Somehow I doubt their backbone infrastructure can keep up and users will start getting slow internet access during peak hours. This is already happening anyway!</p>

<p><br /></p>

<p>Greedy jerks... guess grandma and grandpa wont be able to keep that basic phone for long!</p>

Some people refuse to see it this way even when the reality of it slaps them in the face.

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