De la Vega: Google, Verizon net neutrality agreement is a positive sign
AT&T (NYSE:T) rarely endorses the movements of its competitor Verizon (NYSE:VZ), but AT&T Mobility President and CEO Ralph de la Vega said today that the net neutrality proposal put forth by Google and Verizon earlier this week is a positive sign, and he's hopeful that the rest of the industry can come to an agreement on the hot-button topic.
Speaking this morning in Boston at Oppenheimer's Annual Technology, Media & Telecommunications Conference, de la Vega said that Verizon and Google's net neutrality proposal released Monday (the proposal would forbid any kind of prioritization--including paid prioritization--of Internet traffic over wired networks, but does not apply to wireless networks) is good for the industry and indicates that two companies from different industries can come together on a difficult issue. However, he stopped short of saying that he hoped the FCC would endorse the proposal, and instead said he is hopeful that the regulatory agency will put forth a reasonable framework for net neutrality.
In his wide-ranging discussion, de la Vega also touted his company's introduction of tiered data pricing--in June AT&T ended its unlimited data offering with the introduction of two plans, one that provides 200 MB of data for $15 per month and another that offers 2 GB of data for $25 per month. De la Vega said customer response to the pricing has been positive and the company has seen an uptick in customers buying smartphones with the $15 data plan. "This is a sustainable model. It's good for the industry because it gets customers to use smartphones and use data services."
De la Vega also touched on the prepaid wireless market. He said that while AT&T did recently agree to have Wal-Mart sell TracFone's Straight Talk service with phones that run on AT&T's network, he believes the prepaid market is limited by high churn. He said AT&T's approach is to drive churn down and focus on data and ARPU growth rather than just adding a lot of customers. "Prepaid providers hit a threshold because their churn rate is not sustainable," he said.
Interestingly, de la Vega said one area where he expects to see big growth is in business applications. He said that the growth in tablets, coupled with the advances in cloud computing, will offer lots of opportunities for businesses that want to improve their productivity. He sees lots of potential in the development of customized business apps that can help corporations mobilize their workforces.
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