AT&T CEO: My "only regret" was offering unlimited data

Unlimited data plans are few and far between in the smartphone and wireless carrier businesses nowadays. Sprint is the only one of the four major US carriers to keep such a plan in place for new customers, as T-Mobile, Verizon and AT&T have all ditched their previous unlimited plans.

AT&T CEO Randall Stephenson was recently quoted as wishing his company had not offered any kind of unlimited data plan in the first place. The New York Times reports that during an on-stage interview at the Milken Institute’s Global Conference this week, Stephenson said:

My only regret was how we introduced pricing in the beginning, because how did we introduce pricing? Thirty dollars and you get all you can eat. And it’s a variable cost model. Every additional megabyte you use in this network, I have to invest capital.

Since ditching unlimited pricing in 2010, AT&T has seen a large rise in its revenues from its tiered data plans, with the majority of its customers signing up for the more expensive data plan tiers. Stephenson still has some other concerns for the wireless phone industry, such as how free Internet text messaging services could take a bite out of AT&T's own text messaging business.

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If AT&T can't figure out how to make a payment return stub fit into their return envelope, no wonder they are unable to make intelligent decisions. If they can't handle the simple and easy things to fix, anything more complicated could be beyond their level of expertise.

I can see why offering unlimited data at the start was not a good idea... just by looking at the comments here!

People like price cuts, not price increases. Offering unlimited from the start is similar to making the initial price extremely low. Or maybe they didn't expect users to use that much data. That would make it difficult to increase profits in the future.

Imagine for a moment that AT&T had not started offering unlimited data, but instead started with tiered data plans that cost 2x the price of what they are currently. Then if we think back, we might think: "wow data today is really cheap! Thanks AT&T!" instead of the backlash that AT&T faced when they removed the unlimited plans. Either way, regardless of the data pricing, people would still get the iPhone from AT&T and (reluctantly) pay for excess data usage if they exceeded.

Anyway, it's the CEO we're talking about. CEOs are there to make money for the stockholders.

Most big biz charges whatever the traffic will bear -- that's partly behind Apple's huge financial success... if they cut their prices by 1/2 or 2/3, wouldn't see those same profit statements. It's the same with ATT, Microsoft, Google etc. -- if they could get away with charging more & not lose too much market-share, they would.

Ideally in a free market some other company would offer a similar product for less, its bigger competitors would have to cut prices to keep from losing all their customers, & consumers win. Unfortunately with something like phone service or Windows it's too easy to become a monopoly [or close to it], making sure there is never any upstart to undercut your pricing. From their perspective it's better if the customer has no choice, & better yet if the customer never expects to have a choice to begin with. The ATT CEO seems to be saying that under that biz model he never should have educated ATT's customers, never should have let them know that unlimited data plans could be comparatively inexpensive. From the *I want to be in a price-fixing cartel* perspective he's right, though how he could become ATT's CEO & be so PR clueless is beyond me.

Of course businesses charge what the market will bear ... if it makes fiscal sense for the company. In this case, AT&T did not "educate the customers". Instead, the CEO made a huge mistake. AT&T sold their soul to Apple for the exclusive rights to the iPhone. The consumer ended up with an overburdened network since there wasn't enough profit margin in the AT&T/Apple deal to invest in infrastructure.
AT&T did not educate the customer on how inexpensive unlimited plans could be. Obviously it's not sustainable. How can AT&T continue to invest in infrastructure, R&D, increasing real estate and workforce costs, yet revenue remain static?
Play out this scenario 10 years. We'll have phones consuming Gigs/sec with huge infrastructure costs associated yet you're going to pay a flat legacy 2010 rate?

**** we have a 1,7gig data plan shared across 2 phones and i barely use 200meg of it, though everything auto switches to my home wiresless once in range

Have fun with your over subscribed, over congested mobile networks.
As someone wrote above, bandwidth is not a finite resource. BUT, spectrum on which each mobile carrier has a license to operate under IS very much a finite resource. And without extra spectrum wireless bandwidth too is a finite resource, despite fibre bandwidth not being so (simple physics).

I pay $25 a year for my phone. It's a pay as you go plan from T-Mobile. I only need it if I'm on the road.
I use free calling in Gmail for 99.9% of my calls.

Suckers

FalsePositive said,
I pay $25 a year for my phone. It's a pay as you go plan from T-Mobile. I only need it if I'm on the road.
I use free calling in Gmail for 99.9% of my calls.

Suckers

Man, you have it all figured out. All those people who use 4G to run their businesses and such must be total idiots.

I'm paying $30/month for 4GB a month on Verizon and IMO I think it should be at least 6GB for that price so I would be less likely to pay attention to usage. I try to use as most as I can on wifi which I would hope more locations near me has better free/faster hookups.

Meh... I don't exceed 300MB most months. 500MB on a heavy month. Most of my data is done over wifi anyways so I've been good about it. Regardless I've been paying for the $30 plan which has a 3GB cap.

As for text messages I don't have that because for the most part I don't do enough messaging. I just pay per message. Even then that's at a minimum because I route 90% of all my messages through google voice. I've already told most people who text me on a regular basis to send the messages there because those are free.

The sad thing is that text messages cost the carriers ZERO cents to send and receive. It just uses the normal handshake packet that the phones have to send anyway.

So that's a huge SCAM on top of the 1 cent per gigabyte hard costs of bandwidth they are marking up 10,000% or more.

excalpius said,
The sad thing is that text messages cost the carriers ZERO cents to send and receive. It just uses the normal handshake packet that the phones have to send anyway..

I wish more people knew this and demanded SMSs were free.

AWilliams87 said,
Although I don't necessarily disagree with most comments here, it makes sense to watch the entire interview before name calling.

I read the entire interview and my name-calling toward him stands, in fact I despise him even more.

ir0nw0lf said,
Wow, I just looked up "douche" on the net and his name/picture came up.

Weird. I just got the French word for shower......

Things like this will get this guy fired. Nothing like ****ing off all your customers eh? It sure will be sweet when more cell companies come out with unlimited everything plans for normal prices. Sure, the big ones will offer them ridiculous amounts of money to buy them out, and then change all their plans. I refuse to buy a tablet that uses anything but wifi because of the extreme greed. I bet you each customer costs them about $1 to run, and the other $100 or so dollars is pure profit.

Invizibleyez said,
Things like this will get this guy fired.

CEO's do not get fired. They are elected by the board and is based on how many shares someone has. The more shares you own, the more votes you have. Shareholders will not vote him out as long as the share price is good. People who run corporations don't really answer to the customer.

Right. And things like this get customers mad which causes loss of revenue which... ahhh you figure it out.

RangerLG said,

CEO's do not get fired. They are elected by the board and is based on how many shares someone has. The more shares you own, the more votes you have. Shareholders will not vote him out as long as the share price is good. People who run corporations don't really answer to the customer.

Wait until Apple / Microsoft make their own "Carrier" sub-companies, im sure he will be ****ting himself then

Dumb. I make sure all of my customers get to keep their unlimited data plans. Don't really care if I make less commission; if it were me, I'd wanna keep mine.

Since companies got rid of giving all users unlimited data my contract with 500mb has got cheaper - seems fair to me that the heavy users pay more.

I'm all for us all paying the same though - well presuming those same people are willing to go equal on flights and train tickets?

Since companies got rid of giving all users unlimited data my contract with 500mb has got cheaper - seems fair to me that the heavy users pay more.

I'm all for us all paying the same though - well presuming those same people are willing to go equal on flights and train tickets?

free Internet text messaging services could take a bite out of AT&T's own text messaging business

They gouge their customers with tiered data plans, and then complain because the customers using the data package for texting rather than paying the unbelievably absurd texting fees.

Luckily I am grandfathered into an unlimited data plan. Regrettably that company is Verizon.

I used to be against data caps until I started measuring how much I was using, I was only getting through 200mb a month and some people on the same plan were using tens of GBs, it's only fair they should pay a lot more of they wanna use more.

thealexweb said,
I used to be against data caps until I started measuring how much I was using, I was only getting through 200mb a month and some people on the same plan were using tens of GBs, it's only fair they should pay a lot more of they wanna use more.

Is that like how people that watch way more movies on Netflix online should pay more than the people that only watch one or two movies a month yet still pay the same monthly price? Or like the people that watch more TV than others?

thealexweb said,
I used to be against data caps until I started measuring how much I was using, I was only getting through 200mb a month and some people on the same plan were using tens of GBs, it's only fair they should pay a lot more of they wanna use more.

So why cant you move to a cheaper plan and stop whining about people who actually use what they paid for?

The Gunslinger said,

So why cant you move to a cheaper plan and stop whining about people who actually use what they paid for?

I'm on Giffgaff and I'm on the cheapest plan of £10 for truely unlimited data, problem is a third of giffgaff's bandwidth is used by 1% of the heaviest users, they should be made to pay more.

no wonder they are getting greedy as they used to have unlimited DSL but now it's capped @ 150GB a month which should be at least 250GB a month like Comcast as they are just greedy. if it ever gets any less than 150GB ill dump them almost for sure.

manwiththedroid
I say we all as a nation ditch our data and text plans and go back to basic phones and calling for one year. Then these greedy a$$ carriers will come begging for our demands.

sure, but the thing is people are to addicted to cell phones nowadays as that will never happen as it's to much of a convenience people rely on nowadays.

they should have offered cheaper cell phone plans ages ago as cell phones are overpriced quite a bit for what you get. i am glad i don't use them personally as paying that $50-100 a month is just WAYY to expensive for a damn phone. they should offer basic plans around $20-30 and for those who want some fancy phone with maxed out options should not be more than $50-60 TOPS. but they will continue to screw people as if people pay it, they will continue to charge for it.

If you check AT&T's profit margin you will see that the company made plenty while offering unlimited data. I just wish I could get my hands on info pertaining to the ACTUAL cost of wireless per customer and how much the markup is. Most likely it is a staggering amount of markup per customer. We will probably get the truth about Roswell before that kind of info gets out.

These guys are so full of themselves they really think they deserve us just forking over our hard earned dollars for whatever they think we want. They tell us what we want and they have the money to control our government so they take our say in what goes on there too. I say we all as a nation ditch our data and text plans and go back to basic phones and calling for one year. Then these greedy a$$ carriers will come begging for our demands.

Do you know how much it cost a carrier to send a text message? NOTHING. What do you pay for your txt...?

manwiththedroid said,
These guys are so full of themselves they really think they deserve us just forking over our hard earned dollars for whatever they think we want. They tell us what we want and they have the money to control our government so they take our say in what goes on there too. I say we all as a nation ditch our data and text plans and go back to basic phones and calling for one year. Then these greedy a$$ carriers will come begging for our demands.

Do you know how much it cost a carrier to send a text message? NOTHING. What do you pay for your txt...?

while I agree to a certain extent it remains a fact that messaging does cause network load and extra cost. Certainly when they have to be relayed between different networks. What you are saying is a myth.

XerXis said,

while I agree to a certain extent it remains a fact that messaging does cause network load and extra cost. Certainly when they have to be relayed between different networks. What you are saying is a myth.

relaying to another network yes (but that normally costs extra anyway in the plans) but internal to thier network no. Because in the GSM standard the control packets used to check for and update the phone's satus location etc.. had just enough space in them for guess what.. a short text message. The packets are the same size with and without the text message so there is 0 additional load on the towers as the packets are sent regardless of a message in them or not. no matter if 100 or 1000

XerXis said,

while I agree to a certain extent it remains a fact that messaging does cause network load and extra cost. Certainly when they have to be relayed between different networks. What you are saying is a myth.

Text messages do not add to the network load!! If it was about load they would just take it out of your bandwidth, but no, its about money, that is it.

What is a text message?? It is a 160 charactor string plus a destination phone number. How much data does that use? 140 bytes!! Not KB, just B. That means an old dial-up modem could send about 50 text messages per second!! That means that a single MB out of the data plan you already pay for could account for over 7,000 text messages!!!! I know I have been posting all over this page that bandwidth is not unlimited and people who use more should pay more, but text messages don't count, they use so little bandwidth it really doesn't matter.

What about his outrageous expensive mobile plans? That's why I went to T-Mobile. I have a cheaper plan than the AT&T equivalent plan.

This jackass makes it sound like bandwidth is some finite resource like oil. It isn't. Yes more customers = investing more capital for network upgrades, but, IMHO more customer still = more profit.

nytiger73 said,
This jackass makes it sound like bandwidth is some finite resource like oil. It isn't. Yes more customers = investing more capital for network upgrades, but, IMHO more customer still = more profit.

Bandwidth is a finite resource, like oil. The difference is that oil is replenished over millions of years; bandwidth is looked at second by second. How much bandwidth used total in a month doesn't really matter. How much used during peak times of the day matters a lot. I am a little surprised no one has come up with an unlimited off-peak data plan, seems logical. Data is also more flexible than voice, traffic shaping and throttling can be used in place of a hard cap. I know people don't like that, but if I only have 2GB of data, I would prefer it just slows down after that, not get cut-off or billed for overage.

His "only regret" was offering something within total reason and should be offered by all cell providers for a reasonable cost, yes Randall is scum and a fitting example of AT&T's greed and swindling efforts as a whole.

Order_66 said,
His "only regret" was offering something within total reason and should be offered by all cell providers for a reasonable cost, yes Randall is scum and a fitting example of AT&T's greed and swindling efforts as a whole.

Well said!

Order_66 said,
His "only regret" was offering something within total reason and should be offered by all cell providers for a reasonable cost, yes Randall is scum and a fitting example of AT&T's greed and swindling efforts as a whole.

unlimited data should be standard issue....

Order_66 said,
His "only regret" was offering something within total reason and should be offered by all cell providers for a reasonable cost, yes Randall is scum and a fitting example of AT&T's greed and swindling efforts as a whole.

You do understand that cell networks are a limited resource and data plans use a significant chucnk of this resource, on top of the extra chatter from smart phones. meaning there's less space for people to actually use their phones for.. you know.. calling.

with unlimited plans people have no regard for what they're doing and will stream music and other crap constantly clogging up the "pipes".

HawkMan said,

You do understand that cell networks are a limited resource and data plans use a significant chucnk of this resource, on top of the extra chatter from smart phones. meaning there's less space for people to actually use their phones for.. you know.. calling.

with unlimited plans people have no regard for what they're doing and will stream music and other crap constantly clogging up the "pipes".

they need to upgrade thier pipes then... simple... they do this crap to cling to the old crap and not innovate and expand...

remixedcat said,

they need to upgrade thier pipes then... simple... they do this crap to cling to the old crap and not innovate and expand...

I understand that people want unlimited data, but it doesn't work that way. I would love to be able to pay a flat monthly fee for all the electricity or gas I want, but that is never going to happen. Bandwidth is the same way, it costs the carries money to build infrastructure based on usage, if their costs are based on usage why shouldn't users be? I am sorry, comments like these sound extremely childish. “I want what I want and anyone who doesn't give it to me is a greedy jerk.”

I agree with the guy (not that it was his only mistake). Unlimited data was a HUGE mistake. Not only did it set unreasonable expectations for people like you, but it caused AT&T massive congestion problems on their network. AT&T was also at fault for not developing their network as they should have, no question!

As someone who owns an iPhone and uses it a lot, the most important thing to me is to have reliable access to wireless bandwidth. I am not trying to stream NetFlix videos, but being able to get directions, emails, and pull up a webpage is important. I don't think it is fair to have people on unlimited plans with no reason not to stream HD all day long causing me problems. If they want to be able to do that, they should pay more than I am paying.

It is true that unused bandwidth on existing infrastructure is free (a sunk cost more accurately). What they should do is give you 2GB (or whatever) of priority bandwidth and make the rest available unlimited at a "best effort" rate. I don't have a problem with people using tons of bandwidth, so long as I take priority when I need to make a call or use my smaller amount of bandwidth.

sphbecker said,

I understand that people want unlimited data, but it doesn't work that way. I would love to be able to pay a flat monthly fee for all the electricity or gas I want, but that is never going to happen. Bandwidth is the same way, it costs the carries money to build infrastructure based on usage, if their costs are based on usage why shouldn't users be? I am sorry, comments like these sound extremely childish. “I want what I want and anyone who doesn't give it to me is a greedy jerk.”

I agree with the guy (not that it was his only mistake). Unlimited data was a HUGE mistake. Not only did it set unreasonable expectations for people like you, but it caused AT&T massive congestion problems on their network. AT&T was also at fault for not developing their network as they should have, no question!

As someone who owns an iPhone and uses it a lot, the most important thing to me is to have reliable access to wireless bandwidth. I am not trying to stream NetFlix videos, but being able to get directions, emails, and pull up a webpage is important. I don't think it is fair to have people on unlimited plans with no reason not to stream HD all day long causing me problems. If they want to be able to do that, they should pay more than I am paying.

It is true that unused bandwidth on existing infrastructure is free (a sunk cost more accurately). What they should do is give you 2GB (or whatever) of priority bandwidth and make the rest available unlimited at a "best effort" rate. I don't have a problem with people using tons of bandwidth, so long as I take priority when I need to make a call or use my smaller amount of bandwidth.

Yeah tell that to Sprint who has the iphone and is still offering unlimited data without any problems, I had the iphone on sprint for a while and was always able to make and receive calls and was able to use data any time I needed it.
And comparing data to gas and electricity is completely absurd since they are limited resources, data can easily be unlimited, it's unlimited for sprint, why can't it be unlimited for AT&T?

Greed, pure and simple.

Order_66 said,

Yeah tell that to Sprint who has the iphone and is still offering unlimited data without any problems, I had the iphone on sprint for a while and was always able to make and receive calls and was able to use data any time I needed it.
And comparing data to gas and electricity is completely absurd since they are limited resources, data can easily be unlimited, it's unlimited for sprint, why can't it be unlimited for AT&T?

Greed, pure and simple.

Sprint is not unlimited. First, they lower your priority if you go above 5GB in a month (they don't slow you down, but they give other people first dibs if there is congestion). Also, do some Google searches and you will find that in some extreme cases Spring has canceled service for customers for using too much bandwidth on an "unlimited" plan.

Bandwidth is not unlimited, if you think about it per second, as you should, it is FAR from unlimited. I do agree that measuring it on a monthly bases like AT&T does is stupid. Who cares if I use a ton of data in the middle of the night when no one else is on? I also agree that there is greed, just look at the overage fees. If AT&T's only goal was to protect the quality of their network they could simply lower the priority of traffic for those who go over a set threshold.

I don't disagree with your point that AT&T uses its bandwidth caps as a profit center. But I do disagree with the idea that anyone should be able to use as much data as they want and not pay anymore. That is cellular socialism, lol.

Some good reading...

"Connection Plan: Sprint reserves the right to limit throughput speeds or amount of data transferred; and to deny, terminate, modify, disconnect or suspend service if usage either exceeds (a.) 5GB/month in total or (b.) 300MB/month while off-network roaming. 1024 KB equal 1 MB. 1024 MB equal 1 GB"

Edited by sphbecker, May 7 2012, 5:14pm :

Well put. Sprint has it right, pay for xx amount of unrestricted, once over that you are rate limited if the towers you're on are congested. Clear does the same thing, when it actually is working correctly (rarely) it's about fair as you'll ever get.

sphbecker said,

Sprint is not unlimited. First, they lower your priority if you go above 5GB in a month (they don't slow you down, but they give other people first dibs if there is congestion). Also, do some Google searches and you will find that in some extreme cases Spring has canceled service for customers for using too much bandwidth on an "unlimited" plan.

Bandwidth is not unlimited, if you think about it per second, as you should, it is FAR from unlimited. I do agree that measuring it on a monthly bases like AT&T does is stupid. Who cares if I use a ton of data in the middle of the night when no one else is on? I also agree that there is greed, just look at the overage fees. If AT&T's only goal was to protect the quality of their network they could simply lower the priority of traffic for those who go over a set threshold.

I don't disagree with your point that AT&T uses its bandwidth caps as a profit center. But I do disagree with the idea that anyone should be able to use as much data as they want and not pay anymore. That is cellular socialism, lol.

Some good reading...

Technically sprint is in fact unlimited, yes they have a clause that gives them a "right" to take action however that is just a "right" to do something if a user does too much downloading, which is far different than AT&T who "will charge" extra if you go over that ridiculously small amount for the money you are paying.

I've used more than 5 when I was on sprint and nothing happened, nothing slowed, nothing was shut off, the main difference being that I didn't go very far over 5GB, their are only concerned about the hogs, as any cell provider should be, even the most horrid of providers AT&T should be able to act if someone is hogging bandwidth on a cell phone.
The unlimited plan is in place so people don't have to constantly worry about being shafted with overage fees, not so they can torrent ISO's and movies.
The scumbag Randall only wants to fleece and screw people out of as much money as he can.

Randall needs to be fired and thrown out into the street like a dog.

Also mabye ATT needs to stop throwing money away on sports sponsoring and event sponsoring and lobbying to actually use the money on improving thier network!!!

They will all have to go to unlimited in a few years anyway.By then it will be so demanding people will not use them for that alone. Or at least have it so that most people will not go over a high number like Comcast does with 250GB a month. Funny thing is that I use about 250GB a month with that so I don't know.