AT&T CEO: iMessage disrupts our messaging revenue stream, unlimited data was a mistake

AT&T’s CEO Randall Stephenson seemed to have many things to say about the iPhone at a wireless industry conference earlier this week (full video below). In a talk that resembled this Fake Steve Jobs satire, the New York Times reports that Stephenson was upset that high-volume smartphone users were costing the carrier so much that the lower-volume users had to subsidize their usage. Stephenson said that unlimited data for the iPhone was a mistake: “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.” AT&T discontinued its unlimited data plan in 2010 and moved to a pricey tiered data plan, which it has since reprised and restructured. The plans paid off, because the company earned a whopping $6.1 billion in revenue during Q1 alone. Over 70 percent of the smartphones that AT&T activated last quarter were iPhones.

The CEO also had a bit to say about Apple’s iMessage that introduced in iOS 5. iMessage offers iPhone users free text messages while on Wi-Fi, which—of course—takes away from AT&T. The CEO said he is losing sleep:

“You lie awake at night worrying about what is that which will disrupt your business model. Apple iMessage is a classic example. If you’re using iMessage, you’re not using one of our messaging services, right? That’s disruptive to our messaging revenue stream.”

Stephenson apparently did not lose any sleep over the failed T-Mobile merger that cost his company $4 billion and some very important spectrum. For what it is worth, Sprint said it is sticking with its unlimited data plans, even if the new iPhone has LTE. Interestingly, Sprint still does not carry an iPad of any sort.

Stephenson also relayed the story of the initial meeting with Apple’s late CEO Steve Jobs:

Mr. Stephenson was chairman of Cingular’s board at the time, and he said Mr. Jobs had met with Stan Sigman, who was chief executive of Cingular. After the meeting, Mr. Sigman approached the board to talk about a “unique opportunity.” He hadn’t even seen a picture of the iPhone, but he described a device with a touchscreen that one would use to make calls, do e-mail and run apps.

The board was nervous about the Apple smartphone because it was aware that it would transform its business model, Mr. Stephenson said.

“I remember asking the question: Are we investing in a business model, are we investing in a product or are we investing in Steve Jobs?” Mr. Stephenson said. “The answer to the question was, you’re investing in Steve Jobs. Let’s go after this thing. And we went after it, and the rest is history.”

Additionally, Stephenson spoke about 3G subscriptions on the iPad and said he mostly sees the iPad being used on Wi-Fi, reports Reuters. The reason being, he doesn’t think people want another subscription — which may hold some truth. “My expectation is that there’s not going to be a lot of people out there looking for another subscription,” he said during a webcast of an investor conference, adding that the device would be a mainly “Wi-Fi driven product.” 

Here’s the full talk:

http://www.youtube.com/watch?v=Q3drI4yyiVw