AT&T, top operators confer on smartphone growth, surging data usage

BARCELONA, Spain--Five CEOs from the top operators in the world--Vodafone, AT&T (NYSE:T) , China Mobile, Telefonica and America Movil--compared notes on their customers' growing smartphone adoption and increasing data usage, while also hinting at the network challenges associated with that growth. During the opening keynote session at the Mobile World Congress trade show here, AT&T Chairman, CEO and President Randall Stephenson told the audience that the rapid pace of change in mobile broadband, which he attributes to the smartphone phenomenon, has been the biggest transformation he's seen in his 28 years in the telecom industry. "We are on the cusp of taking this to a different level," Stephenson said, alluding to his company's upcoming mid-year launch of LTE, when he expects even more transformation to occur.

The AT&T executive also urged the industry to have an open stance on operating systems and network interoperability, noting that when SMS became interoperable across operator networks, the number of SMS messages soared. Stephenson offered Amazon as an example of a company worth studying, noting that Amazon's decision to make Kindle an application that can be accessed on other devices such as smartphones and tablets was a very consumer friendly move. "The savviest business move was making the Kindle an app," Stephenson said. "The customer experience is OS agnostic, device agnostic and network agnostic."

Stephenson added that he expects cloud computing to be the "linchpin" in the transformation of wireless networks, noting that AT&T envisions a future where customers will not be limited by device or by operating system in terms of how they get their content. 

Stephenson also said that in a recent study commissioned by AT&T the company found that half of the people surveyed said that they were consuming the same content on three or more different devices--PCs, tablets and smartphones. In addition, consumers don't seem concerned about what access medium--wireless, fixed or Wi-Fi--that they use. "This is a very powerful message: as the 4G networks  become pervasive and the cloud experience expands, customer expectations for an open and seamless environment will increase," Stephenson said. "As we facilitate that openness we will stimulate demand."

The AT&T chief wasn't alone in his optimism about the future. Vodafone CEO Vittorio Colao said that wireless operators have regained their confidence over the past year and no longer feel the immediate threat from "over the top" players such as Google. He said that one-half of Vodafone's customer base uses a smartphone and thanks to network management techniques and tiered pricing Vodafone has been able to effectively manage its network traffic. On the company's move to tiered data pricing, Colao said, "It's good. It gives customers a choice and it gives operators the opportunity to monetize high usage customers without subsidizing high usage with low usage." He added that tiered pricing also provides Vodafone with an opportunity to up-sell customers as they use more and more data service.

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