De la Vega: Growth is in data, not prepaid
AT&T Mobility Chief Ralph de la Vega dismissed the rising popularity of prepaid service and concerns about slowing subscriber growth at an investor conference today.
De la Vega said the wireless industry would grow on demand for wireless data, not prepaid services.
“[Data] is where the growth is. … I see a lot of people making a lot of noise about subscribers, but that's not where [the] revenue growth is,” he said, according to transcribed comments made at the J.P. Morgan Technology, Media and Telecom Conference.
AT&T’s wireless data revenues have nearly doubled in the past two years, rising to $4.1 billion in the first quarter of this year from $2.29 billion in 2008.
De la Vega emphasized the importance of nontraditional connected devices like wirelessly enabled pill bottles, calling them the “next wave of growth in wireless.”
He dodged questions about whether AT&T would implement usage-based pricing for mobile data, saying only that the industry was still trying to understand what the best business model was given its limited spectrum resources.
“I think people in the industry are trying to understand what is the best and most sustainable model [to] drive growth and customer usage, but also taking into account the fact that we have limited spectrum,” he said. “The industry will sort it out, but I think we are in the early stages of trying to understand the usage patterns on devices like the iPad.”
De la Vega emphasized the importance of allocating more spectrum to wireless carriers, calling the current spectrum situation a “crisis.”
“It takes so long to clear spectrum, sometimes seven to eight years, that if we don't identify spectrum that we're going to need three or five years from now and identify it, auction it and clear it, we could likely have a case in the future where we may not have enough spectrum to meet the insatiable demand that we are seeing from customers in data,” he said.
De la Vega’s comments come one month after AT&T reported first-quarter results. The company added just 512,000 net postpaid subscribers, though its total net adds came in at 1.85 million subscribers on the strength of its connected device segment.