Glenn Lurie has a lot of work to do. Successor to the longtime AT&T Mobility CEO Ralph De La Vega, Lurie is leading the carrier into uncharted territory — a land where glasses, watches, and even thermostats can all be considered connected devices. For years, AT&T Mobility has made its bones on the backs of cell plans and mobile phone subsidies, but Lurie isn't content with just focusing on phones and tablets with technology evolving so rapidly.
The former head of emerging devices — AT&T's IoT division — Lurie sees connected cars and homes as the next big revenue stream for AT&T, but he's also interested in seeing more wearables connected directly to his company's cell towers. The Verge sat down with Lurie after he spoke at AT&T's annual Developer Conference, held the day before CES kicks off.
When it comes to mobile plans, T-Mobile is cheaper than AT&T and Verizon. Do you see AT&T pricing coming down to match T-Mobile’s?
The competitiveness happening in our industry has been there forever. Is it a little more hyper right now? You may argue yes or no, but we’ve been the leader in investing in our networks — AT&T has invested over $140 billion over the last six years — and our networks are performing very well. We’re always going to look at what we have to do to be competitive — it’s not only about rates. We’ve been measured about how we decide to jump in or jump out of all the fun that’s going on in the industry.
Our customers are giving us good feedback. We’re seeing what others are doing, but we’re always going to look and make sure we’re talking to our customers and make sure we’re being transparent with our customers. When we have to be aggressive, we will.
Does T-Mobile worry you?
It’s competition. There’s four of us, and I think we respect all of our competition. We look at what they’re doing, as they probably look at what we’re doing. Like I said, we’re going to make very measured decisions about what makes sense. If you go back and look at what happened in 2014, we made our price moves when we felt it was necessary. If you go a few years back, we’ve always been incredibly aggressive, but we’ve also been really on point with what our customers want.
We talk to our customers a lot. As you think about some of the fun things we’ve done; Mobile Share Value — we went into that very hard. With AT&T Next — we’ve obviously gone hard into that — and the feedback from our customers has been really, really good. That’s what’s most important to us. It’s not necessarily about what everybody else is doing, it’s about our relationship with our customers, and that’s the focus.
AT&T Next seemed like a reaction to T-Mobile’s JUMP.
We actually have done financing in the past, it’s just a matter of how you do it and what the structure is. The concept of somebody using the "old way" to upgrade versus having a financing opportunity where customers can upgrade more often — our customers told us they wanted it. We went out and built the original Next and saw our customers loving it. We’ve obviously enhanced that, we’ve added Next 24, and some other pieces to it, but the reality is this is all about what our customers want.
Reaction? Competitiveness? Sure, there’s always pieces of that in anything you do. Mobile Share Value and Next have been home runs. They’ve been terrific for us, they’ve been terrific for our results, they’ve been terrific for our churn, and we’re excited about where those go going forward.
Let’s talk about a third OS, as Android and iOS obviously dominate every carrier. What do you think about Windows Phone, BlackBerry, and others?
As I think you know, we are the only carrier who, for really forever, has had every OS. The reason we do that is we have 118 million customers — you’ve got to give them what they want. Do I think OS competition would be good for the industry? Sure, absolutely.
Those are all important aspects of our business. I think if you look at BlackBerry’s success for a long time — and now they’re bringing out new devices — we have lots of folks on our network that still love BlackBerry. We have lots of folks on our network that think Windows Phone is terrific and easier to use than others. For us it’s about customer choice. If customers tell us they want it, we’re going to have it.
Now as far as what the folks at Microsoft are doing, and the folks at BlackBerry are doing, and the folks at Apple, we’re obviously working closely with all of them, and are going to continue to help them and be good partners to them based on what are customers tell us they’re looking for. It’s going to be interesting. I think OS competition is good for the industry.
Back in November, AT&T CEO Randall Stephenson responded to President Obama’s statements on net neutrality by saying it may cause AT&T to pull back on its fiber expansion. How does that outlook affect AT&T Mobility?
"This will land where it lands."
Net neutrality is a hotly debated topic right now; I think we all know that. The thing as a carrier we have to be focused on is if we’re going to invest $140 billion, we’ve got to be able to make a fair return. There are some pieces of net neutrality that — as Randall has said, and others in our business and around the industry have said — would make that very difficult for us. No matter what happens, no matter what the situation, we’re going to have to go out and — I’m going to go back to it — it’s about our customers, and we’re going to have to take care of those individuals.
This will land where it lands. The bottomline is, the FCC and Mr. Wheeler have some tough decisions to make, and based on whatever decisions they make, we’ll make some decisions and react.
What’s your stance on net neutrality?
Oh, I think our stance is well-documented. I don’t think we’re much different than others in the industry. It’s going to be interesting to see what happens.
AT&T has a lot of connected devices. Is the Internet of Things and the connected home the next big thing and big revenue stream for AT&T?
It’s big. It depends on how you define it — we define connected devices today as anything other than a smartphone or tablet. Obviously we invested much earlier than others, which is one of the reasons we have over 18 million connected devices on our network. It’s the reason we have a big lead in the automotive space. We announced in Q3 that we had 50 percent share. We’ve been saying for quite a while we think this is the next big thing for the business.
What’s exciting is, the whole show here at CES seems to be about it. Everybody’s talking about the home, cars, the industrial internet — I think we’re just scratching the surface of the opportunity. For me, I started the emerging devices business eight years ago, and to have us sitting here today and it really being the focus of CES is really exciting.
You’ve done some exclusive deals for smartwatches in the past, are you going after that more this year?
I think the wearable space is an exciting one. Whether you’re talking about an exercise band or glasses or watches, we see that space as being exciting because it needs to solve a problem. We announced our partnership with Timex for the Ironman watch — that is probably the best example of a standalone device. You can utilize it with your smartphone, but the reality is you’re supposed to leave your smartphone at home and go use that device. It does a whole bunch of great things because it is its own standalone device.
I think the health care space is an exciting one with wearables. The concept that you could have a band on your arm that really is the hub of your body and allows you to have digital bandages and other devices on your body: these are all things that are happening right now and happening really fast. We’ve partnered with a whole bunch of folks — you’ll probably see us make some more announcements, even here at the show — and we’re real excited to get a few of these launched that we have announced.
For smartwatches and wearables that aren’t standalone, that rely on tethering to a phone, is that good for AT&T?
It’s great. You look at whether it’s the Samsung Gear S or whether it’s Fitbit, they’ve done very, very well, and we do sell those. They are partners of ours. I think bluetooth devices are here to stay. I view the future as starting to go toward more standalone, but obviously it’s going to take time, but I think you’re going to start to see that transition happening in 2015.