Glenn Lurie, AT&T's Head of Emerging Devices, Live at Dive Into Mobile
Glenn Lurie is the man who brought the iPhone to AT&T, taking a chance on the phone when other carriers wouldn’t. Its exclusive relationship with Apple has in the last few years meant a boon to AT&T’s bottom line–5.2 million new iPhones were activated on AT&T’s network in its most recent quarter alone–but not without hurting AT&T’s reputation for wonky service, especially in key markets like New York and San Francisco. Now its exclusive arrangement in the U.S. with Apple is expected to end soon. By one estimate, Verizon Wireless will attract 1.4 million subscribers away from AT&T.
Now Lurie is focused on emerging and embedded devices–tablets, netbooks, laptops and embedded computing devices. And that business is showing promise. In its third quarter, AT&T added 1.6 million of these. Not iPhone-like numbers, but it shows an important trend. The key question that will dominate the discussion: Can AT&T keep up with the growth in demand for data?
2:06 pm: About to get started. Walt is making some introductory remarks.
Walt: I want to talk about AT&T. Consumer Reports came out this week and said what a lot of people anecdotally believe, that AT&T has the least-reliable network. How did you end up being viewed that way?
Glenn: We get feedback from a lot of places. We get feedback that we pay for. We also get a lot of feedback from Consumer Reports. We just got some positive feedback from the Better Business Bureau about being the least complained-about wireless network.
2:11 pm: Glenn: The main point I’ll say, we’re always looking for feedback. Did we like what we read in Consumer Reports? No, but with a wireless network, it’s about where it’s not working.
I see reports every single day about every single part of our network. We have third-party drive tests that rank us higher than our competitors in terms of speed.
2:11 pm: Walt: Speed is one thing, but initiating and holding calls is another.
Glenn: We’ve spent $18.5 billion on our network this year; we’ll spend $18 billion next year.
Glenn: Data traffic has grown 5,000 percent over three years. Fastest in the world.
2:13 pm: Glenn: The applications that are being built are getting faster and faster. All the other carriers are starting to have to deal with this now. We’ve been fortunate to have to deal with it first.
Walt is talking about his experience having his voice calls dropped.
Glenn: Our vendors–those supplying the wireless networking gear–have never seen such growth in demand.
2:14 pm: Walt: I live in the Washington, D.C., area and the quality has improved. But I still have this thing where the call drops, and it’s not a rare thing. That’s not acceptable to a lot of people.
2:16 pm: Glenn: Here is my report card. My report card is our results. When you look at our third-quarter results, we added a record number of customers, our data growth set a record. Our revenue was at record levels. One of the things our senior team has said is that it’s not about money. We’re spending more than any company in America on our networks.
Walt: Is Verizon not spending?
Glenn: They are not spending what we are.
Glenn: The BlackBerry Torch is the best BlackBerry device I’ve ever used.
2:17 pm: Walt: What is going to happen to you when the iPhone goes to Verizon?
Glenn: That’s a rumor, Walt.
2:18 pm: We have 93 million customers.
Walt: You must be modeling how many people will desert you when this happens.
Glenn: We are not worried about it at all. We are in position to compete with anyone who has any device at any time.
2:20 pm: Glenn: There are a lot of variables inside our base. The key is having a lot of devices that people want. We’re very excited about the new Android devices. We’re excited about Windows Phone 7. We’re the only provider in the U.S. that has every OS.
Walt: For now.
2:21 pm: Glenn: On to emerging devices. We define it this way–take the phone out, and you have an emerging device. We’re taking a very different approach. I’ve been given the freedom to figure out how to make incremental revenue for the company.
2:22 pm: Glenn: Talking about the AT&T iPad activation process. The rate plans we put out there are prepaid in nature. You can go month to month. And we always tell you how much you’ve used. The feedback on rate plans has been phenomenal. We’ve got a game changer in just the model itself with that device.
Walt: I’m not sure I’ve seen that many tablets following that pattern. They’re following a more post-paid contract.
Glenn: We want to give customers the best rate structure. Some of my competition has made other decisions.
2:24 pm: Walt: And these other kinds of devices. Would e-readers be included in that?
Glenn: Sure. We have all three major e-readers–Kindle, Nook and Sony. It’s a wholesale model. Amazon built that model. Amazon didn’t care how that book got there. That model is simplistic and it’s a great customer experience and we learned a lot from that by watching that experience.
2:25 pm: Walt: How often do you talk to Apple?
Glenn: I talk to Tim Cook practically every day. We talk all the time.
Walt: You still devote the rest of your time when not talking to Apple to these other devices.
Glenn: Correct.
2:26 pm: Walt: With all this network congestion, why are you adding more devices before you get the devices you’ve sold us right?
Glenn: When you talk about Kindle or some devices, they are bursty not thirsty–they’re not big users. The biggest users are tablets, depending on who is using them. The smartphones are driving the growth and congestion.
2:27 pm: Glenn: We’ve made tremendous progress. Some of the perception lags reality.
2:28 pm: Glenn: We have managed a great deal of data on our networks. Our competitors have not.
Walt: But you act like you’ve solved it. Consider this me filling out the feedback form.
Glenn: We have done everything to improve it. The stats show massive improvement. We see it and we feel it.
2:30 pm: Walt: Now asking about 4G. You seem to be doing the least about it at the moment. T-Mobile has done a re-labeling with a souped-up 3G technology. You’ve made some statements you’ll have 4G in 2011. And you’ll have HSDPA+. When are you going to have 4G and in how many cities?
Glenn: I don’t think about Gs. Customers don’t care about Gs. Customers care about their throughput and the experience they get.
Glenn: The key for us–we’re going HSPA+ all over the country. We’re in the process.
Walt: Have you lit up a city?
Glenn: The key is a backhaul into the network. We’re doing that now. We’re very comfortable that we’re not going be behind anyone. It’s a type of 3G.
At the same time we’re going to move to LTE.
2:33 pm: Glenn: We’re very excited about the move to HSPA+ and LTE. I don’t believe you’ll see us behind anyone in 2011 and going into 2012.
2:33 pm: Now doing audience Q&A.
2:34 pm: Question from someone who says his BlackBerry holds on to the network as if its life depended upon it and that the iPhone doesn’t.
Glenn: It’s a great point. These are consumer electronics devices, and they are going to operate differently on the networks. Out of a lot of 100 devices, many are going to be different. Some may be bad.
2:35 pm: Question: I had to look pretty hard to find the AT&T logo on the iPhone. Same on the Kindle. Why is that trend good for AT&T?
Glenn: In a wholesale relationship, we leave that up to the customer. Some may want our branding, others may not. All the agreements I do are custom. I may have three e-reader agreements; they’re not the same. On iPhone, when we sat down and did the agreement with Steve and the team–the logo is there if you look on the box. On the phone, it’s in the corner next to the signal indicator. Some of it is about brand, some of it is about raising shareholder value.
2:37 pm: A question from someone in Chicago who says he doesn’t have many signal problems. To what extent do you see yourself making investments in higher-level media services?
Glenn: We have some apps in the iTunes App store. We also build some things custom for our customers. We give the customers some choice. Amazon is launching an application store for their devices. When you have 93 million customers, they key is to make them all happy.
2:39 pm: Question: In the context of emerging devices, when do you imagine offering family plans for devices?
Glenn: It’s a very good question. When it’s an AT&T branded situation, a tablet Aircard, a smartphone, we look at what’s the right rate plan. Family plans were born because there were three or four devices in the house. We’re obviously looking like that. Maybe a bucket with four or five devices eating from it. Nothing to announce today. But we’re looking to see where this will go. The pace of innovation is getting faster. We’re constantly talking to our customers. We’ve heard that question once or twice.
2:41 pm: And that’s all.
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