AT&T’s de la Vega downplays prepaid growth, potential iPhone loss

AT&T Mobility CEO Ralph de Vega dismissed the growth of the prepaid wireless market and insisted that the real industry growth is  in mobile data plans and “connected” devices.

This was de la Vega’s assessment of prepaid at a recent investor conference. He downplayed the importance of prepaid which is experiencing growth, while the postpaid market has flattened. AT&T’s current offerings reflect the company’s approach of maintaining tolerable, but not competitive prepaid plans in place. “The growth opportunity in this country is in postpaid data,” de la Vega said. “It’s not in prepaid voice.”

De la Vega added that the focus on the metric of subscriber growth is misleading. “I see a lot of people making a lot of noise about subscribers, but that’s not where revenue growth is,” he said. AT&T added 1.9 million net subscriber additions in the quarter, of which only 512,000 were postpaid subscribers. However, the carrier added 1.1. million “connected” devices to its network during the quarter, such as ereaders and other products.

“We’ve positioned ourselves well for the next wave of growth with emerging devices,” he said.  AT&T showed off a wide range of embedded wireless products at the 2010 CTIA wireless conference earlier this year, including Vitality’s GlowCap, an intelligent pill cap. “I would never have looked at a pill bottle and seen a revenue opportunity before,” de la Vega noted. “But I see it now.”

De la Vega also dismissed concern about a revenue hit from the loss of exclusive rights to the iPhone. He indicated that 80 percent of current subscribers are either on family-talk plans or business discount plans, which he considered less likely to migrate to another carrier, even if that other carrier offers the iPhone.


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