The number of AT&T’s iPhone customers leaving for Verizon Wireless since the rival operator started selling the smartphone last month has been “within expectations,” said AT&T Mobility CEO Ralph de la Vega at an investor conference yesterday.
Speaking at the Morgan Stanley Technology, Media and Telecom Conference in San Francisco, de la Vega said AT&T had “not seen any surprises” with the iPhone since Verizon began carrying the device.
“We expected impact on churn and gross adds – the impact so far is within expectations,” he said. De la Vega said the first quarter would be the most volatile, with the effect of the iPhone landing at Verizon tapering off in the months to come, and reiterated that AT&T expected to grow its postpaid subscriber base in 2011.
AT&T had warned investors during its fourth-quarter earnings call in January that the first quarter could be “rocky, volatile and hard to predict” after Verizon got the iPhone, which in the U.S. was sold exclusively through AT&T since 2007. More than 90 percent of AT&T’s iPhone subscribers were under contract in January, helping to buffer the company from large-scale iPhone customer defections to Verizon.
De la Vega also discussed AT&T’s tiered data pricing, which went into effect last summer when the carrier canceled its unlimited data plans. More than 10 million of AT&T’s customers have signed up for the carrier’s tiered pricing plans since they were introduced, de la Vega said, adding that customers on the tiered plans are more profitable than those on unlimited plans.
“We’ve seen customers with tiered pricing have lesser usage and better yield per megabyte than customers on unlimited plans,” he said. “It’s a very sustainable model for the long term for the industry.”
AT&T’s cancellation of its unlimited data plans marked a shift toward tiered pricing as operators sought ways to rein in their subscribers’ soaring mobile data use. Verizon said this week it could phase out its $30 unlimited data plan as early as this summer.
De la Vega also talked about AT&T’s LTE network, which is expected to cover 75 million people this year and be “nearly complete” by the end of 2013. He emphasized the strength of its HSPA+ network and said it would be a key part of AT&T’s LTE strategy by allowing customers to have acceptable mobile broadband speeds even when they’re not in an area with LTE. De la Vega said AT&T is still working to improve its network quality after a bottleneck in its supply chain delayed upgrades, but said the company is making progress, including a 30-basis point improvement in New York City.