AT&T's de la Vega downplays prepaid growth, potential iPhone loss

AT&T Mobility (NYSE:T) CEO Ralph de Vega dismissed the growth of the prepaid wireless market and insisted that the real industry growth is  in mobile data plans and "connected" devices.

The AT&T chief, speaking at an investor conference,  downplayed the importance of prepaid, which has emerged as a growth engine while postpaid subscriber growth has flattened. Sprint Nextel (NYSE:S) is attempting to rejuvenate this market with the relaunch of the Virgin Mobile brand as well as a pay-per-minute prepaid brand, Common Cents Mobile. "The growth opportunity in this country is in postpaid data," de la Vega said. "It's not in prepaid voice."

De la Vega added that the focus on the metric of subscriber growth is misleading. "I see a lot of people making a lot of noise about subscribers, but that's not where revenue growth is," he said. AT&T added 1.9 million net subscriber additions in the quarter, of which only 512,000 were postpaid subscribers. However, the carrier added 1.1. million "connected" devices to its network during the quarter, such as ereaders and other products.

"We've positioned ourselves well for the next wave of growth with emerging devices," he said.  AT&T showed off a wide range of embedded wireless products at the 2010 CTIA wireless conference earlier this year, including Vitality's GlowCap, an intelligent pill cap. Vitality is a 2010 winner of the FierceWireless Fierce 15 awards announced yesterday. "I would never have looked at a pill bottle and seen a revenue opportunity before," de la Vega noted. "But I see it now."

When asked about a more popular topic--whether AT&T will lose exclusive rights to Apple's (NASDAQ: AAPL) iPhone--de la Vega simply laughed off the question. Instead, he said that 80 percent of the company's subscribers are either on family-talk plans or business-discount plans, which he described as "sticky," noting that they were unlikely to bolt even if another carrier gets the iPhone. 

For more:
- see this WSJ live blog (sub. req.)
- see this Dow Jones Newswires article (sub. req.)

Related Articles:
AT&T planning widespread deployment of HSPA+; LTE timeframe stays the same
AT&T showcases wide range of embedded devices
With 1.9M total net adds, AT&T pushes growth with connected devices
Report: Apple producing a CDMA iPhone this year
Sprint launches multi-pronged prepaid wireless strategy

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