Turning traffic into dollars

AT&T Mobility’s data traffic is “growing like crazy,” according to Mark Collins, the carrier’s VP of consumer data. But whether users will actually pay for this stuff is still far from clear.
Collins touted AT&T’s “quite staggering” growth in messaging, and continued to hammer away at the importance of offering users “the broadest possible choice” of services-a familiar theme from the operator. But while uptake of mobile data services may be encouraging, Collins implied the increased traffic isn’t necessarily being converted into dollars.
“Everything from mobile music to content to messaging is definitely driving the business forward, and in a big way,” Collins said. But “customers haven’t really shown us they have a willingness to pay for these types of services yet.”
Collins danced when moderator and CTIA VP of wireless Internet development Mark Desautels asked about the carrier’s potential involvement in the upcoming auction of 700 MHz spectrum, saying that, hypothetically, any operator of AT&T Mobility’s size would “at least be thinking about” being a bidder given the value of the spectrum at stake.
That spectrum-coupled with the 700 MHz licenses AT&T Mobility acquired in the recently $2.5 billion acquisition of Aloha Partners L.P.’s spectrum-could help deliver a wide variety of services, including both on-demand offerings via unicast and one-way multimedia broadcasts. Giving users those kinds of options will be key in monetizing the mobile data market, Collins suggested.
“We can’t just take a cable television or broadcast model and impose it on this business,” Collins said. “It’s not going to work that way.”
Collins opened the Mobile Entertainment Live event yesterday, using the platform to tout a new over-the-air download extension of its mobile music service.
The operator launched its full-track service last year, encouraging users to side-load tunes onto their phones.
ESPN’s John Zehr noted the technological advantages of mobile broadcast during a Q&A following Collins’ appearance. Zehr, who heads the company’s digital video and mobile businesses, said that one-way broadcast networks may be the best infrastructure for delivering a high-profile news conference, for instance, to a massive, cellphone-toting audience.
“Broadcast makes a lot of sense for the kind of content where a lot of people are going to tune in at the same time,” said Zehr, while unicast may be a better vehicle for short, on-demand clips and niche genres of content. And the executive stressed the need for content providers to optimize video offerings for mobile phones, saying repurposed offerings are “a big mistake people make.”
Core Capital Partners chief and former CTIA head Tom Wheeler pressed Zehr on ESPN’s mobile virtual network operator business, which tanked last fall.
Zehr said the company had underestimated the challenges of being a phone retailer, but added that the company has benefited from its “behind-the-scenes” look at the mobile world.
“It was really about trying to raise the game as far as mobile content and services stood vs. voice,” Zehr said of the effort. “We’re very proud to have taken that bet, to have taken that swing, and we learned a lot.”