AT&T CEO: Content providers asking for 'toll-free' data plans
AT&T (NYSE:T) CEO Randall Stephenson said Tuesday the company is still mulling a proposal to charge application developers for data consumed by customers, stating that some content providers have asked the operator to implement the change.
AT&T's proposal would require developers and publishers to pay for consumer data consumption either through direct payments or by awarding the carrier a share of advertising revenues. AT&T first revealed the plan in February, with head of technology John Donovan telling The Wall Street Journal "A feature that we're hoping to have out sometime next year is the equivalent of 800 numbers that would say, if you take this app, this app will come without any network usage." Donovan explained that the plan would enable app developers to absorb some of the costs associated with apps and content that consume large amounts of data, incentivizing users to download and access that content more regularly. Opponents contend developers will raise prices to cover the added expense, with consumers absorbing the increased costs in turn.
Speaking at Fortune Brainstorm Tech conference in Colorado, Stephenson acknowledged that the subject of "toll-free" data plans makes some people "emotional," but said the proposal would remove barriers for mobile companies with "business models premised on traffic." Stephenson went on to say that some AT&T partners have asked the operator to adopt the toll-free model.
North American subscribers consume an average of 309 MB of mobile data per month according to a report issued earlier this year by broadband equipment vendor Sandvine. The firm notes that the top 5 percent of users across the region consume 49 percent of all data. Real-time video and audio streaming now make up half of all mobile data traffic in North America--Sandvine adds that at the current rate of growth, media streaming will drive more than 60 percent of North American mobile data by late 2014.
Stephenson also addressed rumors that AT&T may charge consumers for using Apple's (NASDAQ:AAPL) FaceTime video calling feature over 3G cellular connections on iOS 6 devices. Earlier this week, 9to5Mac posted an error message discovered in Apple's iOS 6 beta 3 software that asks users to contact AT&T to enable FaceTime over cellular, which could be an indication that AT&T plans to charge for the service. In the past, all FaceTime calls have taken place over Wi-Fi connections, but Apple enabled the feature to run over cellular data networks for iOS 6, which will launch this fall.
"I've heard the same rumor," Stephenson said Tuesday. He said that for now, AT&T remains focused on working with Apple to stabilize the technology enabling FaceTime over 3G, adding "It's too early to talk about pricing."
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