AT&T exec: Mobile Share plans, more data connections will lower churn

AT&T Mobility (NYSE:T) believes that customers' shift toward its Mobile Share shared data plans and a new emphasis on services such as its Digital Life home automation offering will lead to lower churn and additional revenues, according to a senior AT&T executive.

AT&T Mobility CFO Pete Ritcher, speaking at the Deutsche Bank 2013 Media, Internet & Telecom Conference, noted that more than two-thirds, or 31.7 million, of AT&T's smartphone subscribers are on its usage-based data plans. In its fourth quarter earnings report, AT&T said 6.6 million customers, or 9 percent of its postpaid subscribers, had signed up for its Mobile Share plans. Ritcher said that over time customers will add more data connections using Mobile Share plans, which AT&T introduced last August, and that AT&T will benefit from that in the form of both lower churn and higher revenue. AT&T "will be able to capitalize and grow our data revenues that are associated with that," he said.

AT&T is not the only carrier counting on this phenomenon. Verizon Wireless (NYSE:VZ) introduced its Share Everything shared data plans last year, and earlier this week Verizon Communications CFO Fran Shammo said so far sales of cellular-connected tablets have been lower than Verizon expected (tablets cost $10 per month to add to a subscriber's shared data plan). However, he said that Verizon has seen greater adoption of mobile hotspot devices. Sprint Nextel (NYSE:S) and T-Mobile USA are also offering shared data plans to enterprise customers.

Ritcher noted that AT&T will launch its Digital Life home automation service in eight markets in March, and the carrier plans to expand the service to 50 markets nationwide by year-end. He also said AT&T "will be in the driver's seat, if you will," on the connected car opportunity, as auto makers add wireless connections to more cars. Ritcher said that the "more types of products and services we can market to our existing customer base we believe has incremental churn benefits associated with it."

Ritcher also said that AT&T expects more competition among smartphone platforms in the years ahead. AT&T said its fourth-quarter 2012 sales included its best-ever quarterly sales of Android and Apple's (NASDAQ:AAPL) iPhone. Interestingly, the carrier did not indicate how well Microsoft's (NASDAQ:MSFT) Windows Phone sales have done. Ritcher noted that AT&T has been a strong supporter of Windows Phone, but he acknowledged that "it's obviously going to take some time to ramp up" and said there are "good opportunities in the business side" with Windows Phone. He also said that, regarding BlackBerry (NASDAQ:BBRY) 10, AT&T is "anxious" to see how its customers accept it.

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