AT&T CEO: Unlimited iPhone Data a Mistake

By Lindsay Welnick

Offering unlimited data may have been the biggest mistake AT&T made in its iPhone business.

Randall Stephenson, AT&T’s CEO, said he regrets that the company offered unlimited data for the iPhone and that he loses sleep thinking about free text-messaging services like Apple’s iMessage, according to a report by the New York Times.

Stephenson’s regret stems from users not paying appropriately for their data usage. With the unlimited data plan, heavy data users paid relatively less than light data users, who subsidized the heavy ones, he said.

My only regret was how we introduced pricing in the beginning, because how did we introduce pricing? Thirty dollars and you get all you can eat,” Stephenson said in the report. And its a variable cost model. Every additional megabyte you use in this network, I have to invest capital.”

While AT&T discontinued unlimited data in 2010, its text-messaging revenue is still at risk from free alternatives. In the most recent quarter, AT&T report $6.1 in revenue from mobile data, with 70 percent of people on the new tiered data plans paying for more expensive data options, the Times said.

However, free messaging services like Apple’s iMessage and Skype could replace traditional text messaging, including AT&T’s offerings, Stephenson said in the report.