* Sees iPad buyers using Wi-Fi, prepaid
* Does not see a lot of subscriptions for iPad
* AT&T shares close down 0.48 percent
NEW YORK, March 2 AT&T Inc (T.N) expects users
of Apple Inc's (AAPL.O) iPad to connect to the Internet mostly
using short-range Wi-Fi networks rather than AT&T's cellular
network, the chief executive of AT&T said on Tuesday.
While AT&T has agreed to provide wireless connections to
the iPad tablet computer, Randall Stephenson said he does not
expect the device to result in many new service subscriptions
for AT&T as consumers will instead use Wi-Fi or prepaid
services, where they do not have to sign a service contract.
"My expectation is that there's not going to be a lot of
people out there looking for another subscription," he said
during a webcast of an investor conference, adding that the
device would be a mainly "Wi-Fi driven product."
Many consumers have their own Wi-Fi networks at home or go
to coffee shops where they can avail of free Wi-Fi.
When asked about AT&T's exclusive rights to U.S. sales of
Apple's iPhone, Stephenson said iPhone would be "an important
part" of AT&T's phone line up "for quite some period of time."
But he did not comment on timing related to the exclusivity
agreement, which has helped AT&T win customers from rivals such
as market leader Verizon Wireless, a venture of Verizon
Communications (VZ.N) and Vodafone Group Plc (VOD.L).
Some analysts expect the exclusivity agreement with Apple
to end this year, but others expect AT&T to do anything it
takes to extend the deal because iPhone is integral to its
AT&T has admitted to network problems in markets such as
New York City and San Francisco where there are a large number
of bandwidth hungry iPhone users.
Stephenson said the company would show considerable
improvements in its network in those metropolitan areas.
"We've got a ways to go, but we think this quarter will
really move the needle considerably in both of these markets,"
Stephenson expects changes in how the wireless industry
prices its mobile data services going forward, with heavy data
users being charged more. Smartphone users currently pay a
monthly fee of about $30 for unlimited data.
"For the industry, we'll progressively move towards more of
what I call variable pricing so the heavy (use) consumers will
pay more than the lower consumers," Stephenson said.
He expects the Federal Communications Commission to focus
on how to push mobile broadband further when it announces a
National Broadband plan later this month.
Stephenson also said he was optimistic about how the
telecom regulator would deal with the issue of net neutrality -
the idea that carriers should not be able to control which Web
services consumers can access.
"I'm actually fairly optimistic net neutrality will land at
a reasonable place," Stephenson said.
But he questioned how the FCC would achieve its proposed
goal of putting Internet connections of 100 megabits per second
to U.S. homes.
"If the objectives are 100 megabits capability to every
home in the United States that is going to require a lot of
investment. To drive that kind of investment will require a
redirecting of the subsidies that exist today," he said.
AT&T shares closed down 12 cents at $24.88 on New York
Stock Exchange on Tuesday.
(Reporting by Sinead Carew)