AT&T is generating less money from each new monthly subscriber of a smartphone. The average monthly smartphone bill for subscribers has decreased by nearly 10%, from $88 dollars to $80 in just 12 months. AT&T should be greatly concerned about that since the large phone company is struggling in gaining new subscribers.
Close to all the adults and many of the children throughout the U.S., have mobile phones. AT&T has said the solution is the smartphone, as the subscriber must not only pay for voice calls, but for all the data used during the month. Therefore, smartphone users have to pay more, so moving those regular phone users to smartphones will help maintain high revenue, said AT&T.
However, that is not the case, as smartphone bills have decreased in a year’s time by over nine percent. That challenges AT&T’s picture of revenue growth over the long term.
AT&T CFO John Stephens has said that the composition of new customers with smartphones is changing. Smartphone users in the beginning were mainly businesspeople and others that could afford to pay the higher fees each month. However, now the phone companies are targeting people who are not able to pay as much.
The head of the wireless division for AT&T, Ralph de la Vega said that continued demand for wireless data would help drive an increase in subscribers’ monthly bills. He says it will be hard to put a cap on how high that might reach.
Even monthly bills for subscribers who do not use a smartphone and are contract based are shrinking and at about the same rate as those for smartphones. Only because AT&T has shifted users from non-data to data plans, once they expire, has it been able to maintain its monthly bills for all plans rising.