AT&T Wireless CEO urges industry to focus on profits, not new services

IDG News Service |  Mobile & Wireless

The challenge facing companies in the wireless technology industry is to stop talking about whiz-bang future offerings and start generating cash, AT&T Wireless Services Inc. Chairman and Chief Executive Officer John Zeglis said Thursday during a keynote presentation opening the Global Wireless Summit conference in New York.

His own company has struggled with profitability since spinning off from AT&T Corp. in 2001: AT&T Wireless posted a US$2.3 billion loss for in its most recent fiscal year.

Too often lost in the hype about next-generation services and other advanced offerings is the reality that wireless companies need to do a better job of profitably selling the products they already have available, Zeglis said.

"Today's wireless capabilities already surpass most peoples' wireless reality," he said. "The main thing all of us in the wireless industry have to demonstrate now is an ability to execute to create real value."

AT&T Wireless sees landlines as its main competition. Zeglis' goal is to drive per-minute wireless costs down low enough to undercut the prices of fixed-line access, which he expects to help in persuading customers to adopt wireless service as their primary phone-communications method. The company sees two avenues for growth, winning more customers and more minutes of its customers' calling time, both of which will be carved out of the market share now held by landline operators, he said.

It's a mission Zeglis pursues with a borderline holy zeal. "We need to free those minutes, to get them out into the air as God intended," he said.

Late last year, AT&T Wireless scaled back its 3G (third-generation) plans, citing a lack of market demand and the need for more conservative capital investments [See, "3G - AT&T delays 3G, plans limited service by end 2004," Dec. 26, 2002]. In his remarks Thursday, Zeglis emphasized that better marketing, not fancy new services, will be the key to expanding wireless penetration.

He cited AT&T Wireless' recent splashy sponsorship of U.S. television hit "American Idol" as one success story. Millions of votes for contestants on the show have been cast using the AT&T Wireless' text-messaging service, many by subscribers who had previously never or only lightly used the service. A significant percentage of those subscribers have gone on to become more frequent users, he said.

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