AT&T CEO says most iPhone users won't leave for other carriers
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.
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.
Comments
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.
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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.
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.
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.
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.
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.
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.
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.
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.
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.
I'll leave. For anyone.
See ya!
What good is an iPhone with a pre-paid service anyway? It's like a Ferrari with no gasoline tank.
Or...an iPod Touch.