AT&T raised prices on some older mobile plans last month and it might have to raise prices again if costs keep going up.
That was the message from AT&T CFO Pascal Desroches at a Credit Suisse conference on Tuesday.
Regarding inflation, “it’s running hotter than we thought,” he said. “You saw one of the things that we did recently was to raise prices in response to that... It's something we're going to continue to keep an eye on. And, you know, we're seeing inflation in labor, supplies, energy, transport.”
If it continues, “we’re going to have to look at pricing again as a potential leverage to help offset that," he said. "Inflation's probably the area that I worry the most about.”
Last week, AT&T eliminated a popular perk from its premium unlimited data plan when it dropped HBO Max for new customers. In its place, AT&T introduced a similar plan, called Unlimited Premium, that offers unlimited data, talk and text with 50 GB of hotspot data for $85 per month.
He said HBO Max is a “great service,” but from time to time, AT&T experiments. Many customers value HBO Max, but some may not. Some put more value on having more hotspot data and others may value additional roaming.
“We're trying to experiment and see, is there another play where we can really better penetrate some portion of the market through using different tools in the toolkit to drive penetration, and we’ll see,” he said. “So, it's really not anything against HBO Max, it's us trying to drive deeper penetration” to different segments of the customer base.
Spectrum & competition
Desroches said AT&T’s network is better than it’s ever been and it’s getting better every day. It acquired nearly $40 billion of mid-band spectrum over the course of the past 18 months, and that has yet to be deployed.
“We expect to deploy that over the next 18 to 24 months and as we deploy, the network will only get better,” he said.
Asked about the competitive threats from cable companies and Dish’s entry into the wireless business, Desroches said they’ve been hearing for years about Dish and what they’re doing. Dish is also an MVNO partner and uses AT&T’s network as part of that deal.
“They are a good partner that we are very happy with the relationship we have with them,” he said. But it’s a business where you need scale to operate, as well as owner’s economics. “And right now, they don't have that and will they get it? Perhaps, but I'm convinced, if we run our play … we should be fine.”
In terms of cable rivals, they’re riding on the networks of the incumbent wireless carriers. “Again, it's really hard to be a principal in this business unless you own the network, you control the entirety of the customer experience,” he said. “We feel really good about where we are, and if we execute our play, we'll be fine.”
Cable has been around for some time now, and it hasn’t impacted AT&T’s performance, he said.