Tup nice today!!!Icould use acouple more days like this and I would be back in BLACK! here's another something to keep this thread alive
June 10, 1998
AT&T Wireless CEO: '98 Rev On Mark,
One-Rate Ahead Of Plan
Dow Jones Newswires
By Shawn Young
ATLANTA (Dow Jones)--Revenue growth at AT&T Wireless is on
target, Dan Hesse, chief executive of the AT&T Corp. (T) unit, told
Dow Jones.
"Absolutely," Hesse said when asked at the Supercomm 98
telecommunications industry convention here if the wireless unit will
reach its 1998 revenue goal.
Hesse said the company's "Digital One Rate," the new flat-rate wireless
service AT&T introduced last month, is growing faster than expected.
"We're well ahead of plan," said Hesse, who declined to say how many
customers have signed up.
Hesse said the new wireless service could become a home phone for
many customers who might use the wireless phone for their calls, while
keeping computers and fax lines attached to their regular phone lines.
The flat-rate plan has been an important part of AT&T's effort to
improve overall revenue growth, which has been sub-par like the
company's. AT&T's overall revenue grew about 1% last year. (AT&T
Chairman and Chief Executive C. Michael Armstrong has vowed that
company revenue will grow 2% to 4% this year with substantial help
from wireless.)
AT&T Wireless's Hesse said in May that wireless revenue growth
should rise into double digits this year. It fell to 7% in the first quarter
as the company focused on big-spending customers at the expense of
revenue derived from occasional users.
AT&T Wireless also is shifting its focus to digital, which provides
better calling plans and lower prices, and thereby lowers revenue. The
payoff should come with better customer loyalty and lower costs.
The one-rate plan is proving to be a winner in terms of revenue, Hesse
said.
"Customers are actually paying us more," he said. "Some customers
who were paying $50 a month for wireless are signing up for
$100-a-month plans and using the phone at home as well as when they
are out."
Average revenue per customer on the plan is going up to $120 a month,
nearly twice the industry average, Hesse said.
Hesse said he isn't sure how many people are using their wireless
phones at home, but "anecdotal evidence" suggests that such use is
popular.
The majority of new One-Rate customers are being lured away from
competitors. And those that move to One-Rate from another AT&T
Wireless service tend to spend more on the new plan, which charges flat
fees and does away with the long-distance and roaming charges that can
send travelers' bills skyward.
Perry Walter, an analyst at Robinson-Humphrey Co., said he has little
doubt that AT&T Wireless will meet its revenue growth goals. He said
he, too, has seen evidence that AT&T's plan is attracting people who
use the service from home as well as on the road.
"What's going to be very interesting is the profit margin," Walter said.
AT&T is giving up a lot by forgoing long-distance and roaming charges
to woo heavy users, many of whom are travelers.
Hesse said margins are better with the new flat-rate plan than with other
plans because digital service is cheaper to provide and helps maintain
customer loyalty.
Costs are coming down along with prices, Hesse said.
Hesse said data service is important to the future of wireless
communication, but he predicted wireless will remain predominantly a
voice medium for some time. Data currently makes up less than 1% of
wireless revenue. Hesse said that could rise to 10% by 2002.
-Shawn Young; 201-938-5248 |
