On the Call: AT&T CFO Lindner talks about new data plans encouraging tradeups

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On the Call: AT&T CFO talks about new data plans

NEW YORK — In June, AT&T Inc. stopped letting new customers sign up for its $30 per month unlimited Internet data plan for smart phones and iPads, breaking with industry practices. Instead, new customers have to sign up for either a $15 or $25 per month plan with limited data traffic allowances. CFO Rick Lindner talked on the second-quarter earnings conference call Thursday about how customers have reacted.

Lindner said that the cheapest plan seems to be encouraging customers to trade up to “integrated devices” — what AT&T calls smart phones like the iPhone and messaging-oriented phones with full QWERTY keyboards.

QUESTION: How do the tiered data plans affect your outlook for average monthly wireless fees?

ANSWER: The early results on the tiered data plans have been, I think, pretty encouraging and on balance, pretty much what we expected. We have seen some migrations of customers from $30 unlimited plans down into the lower tiered plans, but the migrations at this point have tended to be at kind of the lower end of our range of expectations. And originally, to be honest, we had expected virtually all of those customers to migrate down to the lower price point, and in fact, we’ve had a portion of those customers — more than we had expected — migrating, but just migrating to the $25 plan.

So from an (average monthly revenue per user) perspective, all of that is a bit better than we had expected. We are seeing nice growth in terms of customers that are now upgrading to integrated devices and moving into the lower tiered plan, and so I think we are seeing the benefits of lowering the point of entry so that customers can move into the integrated device, begin to try the data services. And we believe over time, based on how much data they use, they will then begin to migrate up to higher tiered plans.