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

IDG News Service |  Mobile & Wireless

In response to an audience question, Zeglis said AT&T Wireless is unlikely to seek deals with other vendors to offer bundled packages of communications services. Such bundles cost more for providers than does offering services piecemeal, yet competitive pressures force bundled packages to be offered at a discount, he said. What the company will do, however, is partner with outside parties, like its former parent, in joint-services deals that will help it reach potential new customers. AT&T Wireless is always eager to find ways to lower its high customer acquisition costs, he said.

Another topic raised throughout the day by conference participants is a looming November deadline set by the U.S. Federal Communications Commission (FCC) for wireless carriers to implement number portability, allowing customers to keep their phone numbers when they switch service vendors. The wireless industry bitterly opposes such a move, fearing it will unleash significant customer churn.

Fixed-line carriers are already bound by portability regulations, but the near-monopoly status carriers hold in many markets means there's little customer demand. The wireless market, in contrast, remains highly competitive. Zeglis said only one thing will make portability palatable to the wireless industry: an enforced mandate requiring fixed-line companies to shift numbers to wireless carriers, upon customer request.

"We lose 30 percent of our customers each year. A wired company only loses its customers when the customer dies," he said. "Here's what frosts me: We can't go on with the wired companies saying four out of five times that because we're not in their rate center, they don't have to port the number. If we could get the wired numbers ported, then people are going to clip the cord."

FCC Commissioner Kathleen Abernathy said in an afternoon conference session that an extension of the November deadline -- the wireless industry has already won several postponements -- is unlikely.

"I do not see a groundswell of support for a delay," she said.

Requiring fixed-line companies to port numbers to wireless carriers is fine in theory, but may not be backed up in reality by sufficient customer demand, she said.

"Clearly, if you're going to impose that cost and requirement on the wireless industry, the wireline industry has to be ready and able to port numbers to the wireless industry," Abernathy said. "But how many in this room really want their wireless number as their main number?"

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