With pressures on AT&T (NYSE: T) mounting as its sole grip on the iPhone slips away, Ralph de la Vega, president and CEO for AT&T Mobility and Consumer Markets, began the Q3 earnings call by insisting that there’s still a wide world beyond Apple (NSDQ: AAPL) out there. He did admit, however, how important both the iPhone and iPad 3G are to the company. But its overall wireless strategy will also rest on broadening its offerings.
One area AT&T believes it can drive more revenues is expanding its business side. “More companies are still in the early stages of integrating mobile into their businesses, and we see that as an opportunity for us,” de la Vega said. He also noted that the company isn’t just focused on the iPhone, as it will be losing exclusivity for the device early next year when Verizon starts offering it as well. The company has seven new handsets coming out of the next few months across Motorola (NYSE: MOT), Microsoft (NSDQ: MSFT) Windows 7 and Google (NSDQ: GOOG) Android.
During the Q&A portion of the call, margins in wireless are expected to rebound in Q4, said Rick Lindner, AT&T’s CFO. The company will be transitioning and integrating of customers moving over from its AllTell acquisition. “Those customers will need and want new wireless devices, and that will have a positive impact over the next two quarters,” he said.
De la Vega talked about how competitors are starting to add tiered data plans that base price on usage. “We think that’s the right direction, but we’re not going to comment on competitors’ prices,” he said. Asked if Verizon’s unlimited plan will affect AT&T, which no longer offers unlimited data, he said, “We had record sales when everyone else is offering unlimited plans, and we have no doubt that our salespeople will have no trouble,” de la Vega said.
He also sees lower-end — i.e., lower cost — smartphones as a possible trend that, if it takes hold, will occur gradually over time. But he did sound uncertain about whether consumers will gravitate towards devices that only provide basic web functions. “We believe in offering consumers a choice of various products, and we’ll see if that’s what consumers want,” he said. “But if the trend does take hold, I don’t think we’ll see anything immediate.”