AT&T CEO Glenn Lurie discussed plans the company has for the future at the Code/Mobile conference in California last week. The chief executive made comments on phone leasing plans the other big carriers have begun to offer their customers and the Federal Communications Commission's approaching spectrum auction, as well as other topics in the tech field.
As carriers have started to turn away from the traditionally subsidized phones on two-year contracts, the true price of a smartphone, particularly high-end models, may startle the average consumer. Without the option to pay for a device throughout a two-year contract, customers are keen on reducing costs by holding on to their trustworthy, if outdated, smartphones. For carriers, this means fewer yearly upgrades and ultimately less revenue. To combat the trend, networks are struggling to offer the most attractive smartphone leasing programs. AT&T, however, is not deeply entrenched in the recent price fights. Lurie explained that the company launched its Next program, which allows customers to upgrade yearly, believing they would benefit from customers who would take advantage of it. However, the carrier was surprised to discover customers prefer low monthly payments to paying through a phone only to have to pay for the next model a year later. The company has noted that its customers are "holding onto their phones longer." Their position contrasts with other carriers who are promoting leasing. Verizon, for example, allows customers to upgrade every 12 months, despite a 24-month payment, as long as the original phone is returned.
Lurie also touched on the car and how it relates to your mobile devices, calling it a "smartphone on wheels." AT&T is planning to move alongside the industry as it provides services for the connected car. Lurie stated the carrier is offering services like mobile hotspots and apps for vehicles, with special attention given to security and preventing distracted driving. The chief executive's comments were in line with his previous ones, stating that AT&T is prepared to move quickly outside a phone-only market, as it did when the iPhone was first released. Their plan includes devices like wearables, which, despite lower than anticipated adoption rates, are crucial pieces of a connected future.
In response to the FCC's projections of $60 billion to $80 billion in revenue from the spectrum auction to be held in March of next year, Lurie made it clear he was not expecting those numbers. The nation's fourth largest carrier, Sprint, stated that it would not be purchasing any additional spectrum from the FCC in the next auction. The reasoning behind it was Sprint's decision that it had already acquired a sufficient amount of wireless spectrum to improve its network. Other carriers have also spent substantial amounts of money at auctions, prompting Lurie to suggest that "$60 billion is unrealistic at this time."