AT&T CEO says most iPhone users won't leave for other carriers

Posted:
in iPhone edited January 2014
AT&T's chief executive said Tuesday that he's not concerned about Apple's iPhone becoming available on other carriers in the U.S., because most customers are locked into long-term contracts.



Speaking at an investor conference hosted by Goldman Sachs on Tuesday, Randall Stephenson admitted that the iPhone 4 is responsible for a great deal of the company's smartphone sales. But he also attempted to assure investors that his company will do well even after its exclusive agreement with Apple ends.



According to MarketWatch, the CEO told investors that most iPhone users -- about two-thirds -- were already customers of AT&T. In addition, strong sales of devices like the iPhone 4 lock customers into two-year contracts, meaning they won't jump ship to an alternative carrier like Verizon.



"If you look at the iPhone base, about 80 percent is either on a family-talk plan or in a business relationship with us," Stephenson reportedly said. "Those customers tend to be very sticky. They don't churn very quickly."



Stephenson's comments come soon after Credit Suisse raised its price target for AT&T, citing a study showing that only 23 percent of AT&T iPhone customers would switch to Verizon if "given the chance." Another 3 percent would depart for Sprint, while 2 percent would stay with T-Mobile, but 63 percent said they would stay with AT&T.



Neither AT&T nor Apple have publicly disclosed when their exclusive arrangement for the iPhone is set to expire, though numerous reports have indicated a potential January 2011 launch of an iPhone compatible with the CDMA wireless standard, which is what Verizon operates in the U.S. In terms of subscribers, Verizon is the largest wireless provider in the U.S., ahead of No. 2 AT&T.



There have also been rumors of the iPhone becoming available on other, smaller carriers in the U.S., like T-Mobile, as soon as this fall. As exclusivity agreements for the iPhone have ended in other countries around the world, it has resulted in even greater sales for Apple.



Earlier this year, AT&T, in federal filing, warned investors that exclusivity for "a number of attractive handsets" will end, but did not give specifics on phones or dates.



In addition, in May, Ralph de la Vega, president and CEO of AT&T's mobility and consumer markets division, downplayed the effect the loss of exclusivity would have on his company's business. Like Stephenson on Tuesday, he said earlier this year that family talk and business discount plans are "sticky" and keep customers with the carrier, regardless of options from other providers.
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Comments

  • Reply 1 of 66
    Yes, finally, unequivocal proof that the iPhone will come to Boost Mobile!
  • Reply 2 of 66
    Quote:
    Originally Posted by AppleInsider View Post


    AT&T's chief executive said Tuesday that he's not concerned about Apple's iPhone becoming available on other carriers in the U.S., because most customers are locked into long-term contracts.

    ...

    Stephenson's comments come soon after Credit Suisse raised its price target for AT&T, citing a study showing that only 23 percent of AT&T iPhone customers would switch to Verizon if "given the chance." Another 3 percent would depart for Sprint, while 2 percent would stay with T-Mobile, but 63 percent said they would stay with AT&T.



    My what a rosey picture they paint. We shall see AT&T.
  • Reply 3 of 66
    once again, a case where an executive speaks before he should. i think folks are so fed up with the lack of service and attention, they'd be willing to pay the cancellation fee and go elsewhere.



    personally, i won't ever use at&t again. got rid of them 10 years ago and haven't looked back since. i'm glad the iphone is coming to t-mobile. i may actually purchase one.
  • Reply 4 of 66
    The CEO should keep telling himself right up until the day he resigns. I have more or less budgeted an early termination fee into purchasing another iPhone. Its too bad ATT gets this and not Apple; at least Apple would make something shiny with the money.
  • Reply 5 of 66
    Quote:
    Originally Posted by camroidv27 View Post


    Yes, finally, unequivocal proof that the iPhone will come to Boost Mobile!



    After you pay $700 for an iPhone to use on BoostMobile, you're better off just signing a contract and getting real cellular service. You don't get access to any kind of roaming when you're on a pre-paid service. Also, you think they wouldn't throttle pre-paid users?



    Pre-paid service will always use throw-away handsets. The carriers aren't going to invest in pre-paid customers. They are usually pre-paid for a reason.
  • Reply 6 of 66
    the other carriers are just as bad as AT&T wait till every one jumps on verizons network and watch them start bitching
  • Reply 7 of 66
    Quote:
    Originally Posted by elliots11 View Post


    My what a rosey picture they paint. We shall see AT&T.



    I'm with you, just who do they think they are. I might be the first to jump that ship.
  • Reply 8 of 66
    My whole family will be jumping ship to Verizon the moment it's possible.



    Also considering moving our business account as well.



    All in all, a sizable loss for AT&T due to the poor experiences of just one customer.
  • Reply 9 of 66
    I would leave for tmo. They got good coverage here and the price alone is more than enough reason to switch
  • Reply 10 of 66
    It's true for me. Verizon does have better coverage, but Verizon is a terrible company. ATT is just easier to deal with, is my experience.
  • Reply 11 of 66
    Just took AT&T off my holding long list. Great short term position, but the pain will come in 2 years, and his attitude and dismay for customers will have an effect.



    What ever happened to 'We love our customers and will make sure there is no other carrier that they would ever want to go with' attitude, instead of the 'We have them trapped' line.
  • Reply 12 of 66
    I will not leave AT&t as I am pretty happy with their service in my area.
  • Reply 13 of 66
    tenobelltenobell Posts: 7,014member
    Shaking my head......these idiots.



    They should not be emphasizing customers locked into long term contracts, people should want to stay with AT&T because they are dedicated to providing the best service.



    Me and my significant other are out of contract. If VZW does get the iPhone and its service is far superior to AT&T. It would be difficult for me to argue to stay with AT&T.
  • Reply 14 of 66
    Quote:
    Originally Posted by rbonner View Post


    Just took AT&T off my holding long list. Great short term position, but the pain will come in 2 years, and his attitude and dismay for customers will have an effect.



    What ever happened to 'We love our customers and will make sure there is no other carrier that they would ever want to go with' attitude, instead of the 'We have them trapped' line.



    Ah, the sin of hubris. It always comes before the fall. Can you believe the arrogance of this guy? "Our customers don't love us, but they're trapped, so all is good."



    I thought big time executives were supposed to think long term. This guy is thinking less than 2 years out. What an idiot.
  • Reply 15 of 66
    I'll leave. For anyone.
  • Reply 16 of 66
    I'm one of said AT&T users who wouldn't leave for another carrier. I get great service and customer support is pretty good.
  • Reply 17 of 66
    Quote:
    Originally Posted by UbiquitousGeek View Post


    After you pay $700 for an iPhone to use on BoostMobile, you're better off just signing a contract and getting real cellular service. You don't get access to any kind of roaming when you're on a pre-paid service. Also, you think they wouldn't throttle pre-paid users?



    Pre-paid service will always use throw-away handsets. The carriers aren't going to invest in pre-paid customers. They are usually pre-paid for a reason.



    What good is an iPhone with a pre-paid service anyway? It's like a Ferrari with no gasoline tank.
  • Reply 18 of 66
    Quote:
    Originally Posted by iansilv View Post


    I'll leave. For anyone.



    See ya!
  • Reply 19 of 66
    Quote:
    Originally Posted by Rabbit_Coach View Post


    What good is an iPhone with a pre-paid service anyway? It's like a Ferrari with no gasoline tank.



    Or...an iPod Touch.
  • Reply 20 of 66
    No plans to leave AT&T here. I may consider Verizon if I can get simultaneous voice and data, which is mandatory for me, and they won't have that until LTE is up and running. On top of that, they would have to offer a noticeably better deal than AT&T. I am not interested in saving 5 or 10 bucks a month.
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