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AT&T Executive Downplays Effect of Eventual Loss of iPhone Exclusivity on Business

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AT&T Mobility CEO Ralph de la Vega participated in a Q&A session this morning at a J.P. Morgan conference, and The Wall Street Journal blogged his comments, a number of which focused on the iPhone and iPad.

According to de la Vega, about 80% of AT&T's customers are on family talk or corporate discount plans, which serve as a significant barrier for customers to switch to a competing carrier. While he declined to reveal the date upon which his company's exclusivity agreement for the iPhone in the United States will expire, he appears relatively unconcerned over the possibility of a mass exodus of customers once the iPhone reaches other U.S. carriers.

De la Vega's comments do not suggest, of course, that Apple could not benefit immensely from an expansion of the iPhone to other U.S. carriers, which would allow the company to tap into large markets of customers who have been unwilling or unable to switch to AT&T for the device.

In addressing the iPad, de la Vega noted that he is a fan of the device, using it extensively on Wi-Fi. He does, however, enjoy the flexibility of having 3G data services available, even though he apparently does not take much advantage of it.
Apparently AT&T's mobility chief uses his iPad mostly on WiFi rather than 3G. But "if customers want to use 3G, we have to give them 3G," he says.
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Questions also arose over AT&T's much-maligned wireless service, particularly in New York City and San Francisco. De la Vega expressed satisfaction with recent improvements in New York, but acknowledged that equipment shortages have continued to hamper AT&T's ability to bring service performance up to par in San Francisco.

Article Link: AT&T Executive Downplays Effect of Eventual Loss of iPhone Exclusivity on Business
 
Article Link
https://www.macrumors.com/2010/05/19/atandt-executive-downplays-effect-of-eventual-loss-of-iphone-exclusivity-on-business/
I would attest to this. I am on a family plan with AT&T and have switched to Verizon for the Droid Incredible. I am the primary account holder, and the account is a business account. It is very difficult to make this switch happen. They do it on purpose. Goodbye AT&T.
 
I see no barrier to exit...

...with my family plan.

We all just text each other anyway.

Yup, I'm on a corporate plan, but it only saves a tiny bit anyway.

No barrier to me, AT&T!

He should be focusing on what the barriers are to staying.
 
What about Seattle?

"Questions also arose over AT&T's much-maligned wireless service, particularly in New York City and San Francisco. De la Vega expressed satisfaction with recent improvements in New York, but acknowledged that equipment shortages have continued to hamper AT&T's ability to bring service performance up to par in San Francisco."

What about Seattle. Service is crap here.
 
Bravado.... That's all his comments were on the subject.

He can't show weakness or fear because it would only open the door for a pushy Apple to get even pushier with demands.

When Apple offers the iPhone on other carriers in the States I bet you will see about 1/3 of AT&T's iPhone customers jump ship, especially if Verizon is one of the carriers.
 
Hey AT&T here in San Francisco it is impossible to use your service while I am at a Giants game. What is the name of their ballpark again? Fix the network.....
 
According to de la Vega, about 80% of AT&T's customers are on family talk or corporate discount plans, which serve as a significant barrier for customers to switch to a competing carrier.
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So he admits that the quality of service isn't what will keep people on AT&T. Whatever happened to providing the best service to customers as a way of earning customer loyalty? :mad:
 
skellener said:
Whatever happened to providing the best service to customers as a way of earning customer loyalty? :mad:
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Last time i checked, the first obligation a company has is to it's shareholders and board members. That and to make money. AT&T doesn't have to produce the best of anything (even if that was possible). They just need to do the minimum to ensure that they make a profit. Part of that is providing barriers to exit like what De La Vega mentions.
 
pdjudd said:
Last time i checked, the first obligation a company has is to it's shareholders and board members.
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If that were true, wouldn't de la Vega divulge the date of the end of exclusivity? The owners of the company (shareholders) want to know, and he's supposed to be managing their company on their behalf.
 
pdjudd said:
Last time i checked, the first obligation a company has is to it's shareholders and board members. That and to make money. AT&T doesn't have to produce the best of anything (even if that was possible). They just need to do the minimum to ensure that they make a profit. Part of that is providing barriers to exit like what De La Vega mentions.
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Not a smart long-term strategy, however. They can slow the bleeding, but eventually everyone who wants to escape escapes.


rmhurdman said:
If that were true, wouldn't de la Vega divulge the date of the end of exclusivity? The owners of the company (shareholders) want to know, and he's supposed to be managing their company on their behalf.
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First, they may be contractually unable to reveal it. Second, the "owners of the company" always want to know things, but companies are obligated to keep secrets for lots of reasons, not the least of which is it would often be foolhardy to let competition know the answers.
 
Hell, once iPhone lands on verizon or other carrier, I'm jumping ship asap. Can't stand the dropped calls and 3G connection...:mad:
 
I don't mind the droves that leave if they do. That will free up some space for those who stay.
 
rmhurdman said:
If that were true, wouldn't de la Vega divulge the date of the end of exclusivity? The owners of the company (shareholders) want to know, and he's supposed to be managing their company on their behalf.
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Why would they do that? The owners of the company already know this, they don;t need De La Vega to make this public.

Companies don;t just blather out information like that, that's silly

cmaier said:
Not a smart long-term strategy, however. They can slow the bleeding, but eventually everyone who wants to escape escapes.
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Another thing I have noticed is that Telecoms don't do anything until they are forced to - in other words, they will go with this until it's no longer viable. And they don't always do things that are necessarily smart. My point is that any sort of "the customer is right" mentality only works when it happens to match the companies needs. AT&T just needs to do the minimum that it feels as long as they have something that people desire.

All he is doing is pointing out the obvious - lots of their subscribers have huge barriers to exiting - something he would say to offset concerns about subscriber revenue suddenly going down.
 
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