AT&T Moves Aimed At Mobile Data

by , Feb 28, 2011, 6:00 PM
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AT&T Monday announced a pair of initiatives underscoring the company's efforts to boost its mobile data business and connected device strategy.  

One is a new location-based service powered by Placecast allowing users to receive alerts about sales or promotions from nearby retailers or brands. The other move is that AT&T will start selling the Amazon Kindle 3G at its retail stores nationwide on March 6, the first time it will sell an e-reader directly from its own stores. Amazon doesn't sell data plans directly to Kindle users. Amazon covers the data charges and passes on the cost to Kindle users through the e-reader's price and the price per book downloaded over AT&T's network or WiFi.   

As the first major carrier promoting a location service using geo-fencing to send messages to users passing by participating stores or brands, AT&T clearly wants to capitalize on the emerging technologies and apps of mobile shopping. That in turn will drive more mobile data activity among AT&T subscribers, and ultimately, more mobile data revenue.

AT&T isn't charging an extra fee for the new ShopAlert offering, but regular message and data rates apply to the opt-in service. High-profile brands such as Kmart, JetBlue and Hewlett-Packard are on board as launch partners, which could prove intriguing to at least some of the carrier's 95.5 million customers. For AT&T and its rival carriers, mobile data is the growth engine for their wireless revenues. Mobile researcher Chetan Sharma today reported total mobile data revenue in the U.S. last year increased 23%, to $55 billion.  

AT&T saw a 27.4% gain in mobile data sales in the fourth quarter, up $1.1 billion from a year ago. Contract customers with mobile data plans increased more than 20% in the last year. So the more the company can entice subscribers to send or receive text messages, use apps, barcodes and location-based services, the more it can continue to grow wireless revenue.  

Powering connected device such as the Kindle extends that strategy. Such gadgets, which also include tablets and netbooks, added 1.5 million subscribers for AT&T in the fourth quarter. The carrier earlier this year announced plans to support a variety of other devices, including the Pandigital Novel eReader and the Android Multimedia Tablet for connecting to Barnes & Noble's eBookstore.  

By selling the Kindle in its own stores, AT&T simply expands access to the e-reader and gives more potential buyers the chance to get a hands-on demo of the device. That should help in competing with the retail space Barnes & Noble has carved out in stores for the Nook. And the more shoppers who walk out with Kindles, the more AT&T can build its revenue from non-phone devices.

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