Glen Lurie, the new CEO of U.S. mobile operator AT&T, gave a wide-ranging interview to The New York Times late last week in which he opined on various aspects of the mobile telecommunications industry. Lurie, who took over the chief executive responsibilities from Ralph de la Vega three months ago, was asked about the recent MNO price wars in the U.S. and replied, “It’s really important that we show fairness in how we price things, and that we don’t have offers that are short-lived….We’re going to continue to operate in that way and be very transparent.” He added, “ ‘Deal of the day’ is not necessarily how you get there….I think we’re propagating some confusion in the market place—us as an industry.” The topic of so-called supercookies—powerful techniques to track consumer preferences for mobile ads—was also raised by the Times, and Lurie said, “We had a pilot program and were trying to learn and understand how best to serve our customers. We got feedback that there was some discomfort. We decided to pull back and retrench.”
In the face of aggressive competitive moves from T-Mobile, AT&T is trying to emphasize customer service and consistency—a strategy that can play well at a time when consumers in the U.S. reportedly feel bewildered about the plethora of competing, complex and ever-changing offers from MNOs. T-Mobile’s offerings have led to churn at AT&T and Verizon, but, as we recently reported, AT&T CFO John Stephens has said he is not worried about the long-term effects of these deals, because of the fact that they are offered on a limited-time basis. Lurie’s advocacy of long-term plans is congruent with this take on current events, and by urging operators to take such an approach, he is suggesting a way for the well-established carriers to oppose the “UnCarrier” concept and help make sure its impact on their business remains strictly short-term.
As for the decision to end the supercookies pilot program, we believe Lurie is right to distance the company from any practices that would tend to lower consumer confidence levels. In the post-Snowden era, fears about surveillance and spying—governmental, corporate and criminal—are rife, and there is no faster way for an operator to alienate its subscribers and risk losing them than to make them feel that it is not supporting them with regard to privacy issues. In a similar vein, keeping faith with subscribers by adhering to a code of full transparency is one of the surest routes to high retention rates, so Lurie’s repeated use of the word “transparency” indicates how much of a priority this issue has become.
The above item appeared in a recent issue of Tarifica's "The Story of The Week", a weekly report that analyzes noteworthy developments in the telecoms industry from around the world. For past issues or to learn more about The Story of The Week or to contact the Tarifica Research department: http://www.tarifica.com/contactus.aspx