A declining economy is hurting AT&T’s consumer business, but IPTV...

he said. There may not be a “radical effect” since AT&T is shifting the business to a lower cost Internet Protocol infrastructure, he said. AT&T’s move to IP has been the enterprise business’ “primary driver,” he said, predicting continued revenue growth each quarter this year. Despite the economy, Stephenson expects AT&T revenue to keep growing. “The whole [AT&T] revenue story begins with wireless,” Stephenson said, citing the iPhone. “There is a lot of runway left in terms of penetration.” Revenue per user should also grow, fueled by increasing data revenue and accelerated switches to 3G and smartphones, he said. AT&T expects to finish its wireless 3G network this year, he said. AT&T will move to 4G Long Term Evolution technology “as quickly as we can, but that’s not going to happen tomorrow,” he said, noting that AT&T must wait for standards and LTE technology. Much of AT&T’s future wireless penetration will come from prepaid services, a “growing market,” Stephenson said. There is “still a lot of postpaid room, but as you move on it will be more and more prepaid,” he said. Meanwhile, “wireless, not cable” is the main threat to AT&T access lines, Stephenson said. Wireless broadband and video is where the industry is heading, he said. More AT&T integration along those lines is “coming,” he said. IPTV will spur AT&T growth in the next three years, Stephenson said. AT&T is unlikely to significantly change prices to increase its video market share in 2008, he said. AT&T is winning 10 percent of the market just by being an alternative, he said. The next 10 percent will come from “some serious marketing,” which needn’t involve price reductions, he said. AT&T is focusing on “enhancing feature functionality” and “getting more bandwidth into the home,” he said. AT&T wants to sell video to customers inside its U- verse IPTV service areas and out, Stephenson said. “You'll always see us have a TV product,” he said. Dish Network is meeting AT&T’s need “very well,” he said. AT&T is planning more assertive triple play bundles of wireless, broadband and IPTV in the U-verse region. Out of region, “we'll see,” he said. AT&T hasn’t “scratched the surface” on reducing costs, Stephenson said. AT&T plans to consolidate help desks and call centers across its divisions, he said. Stephenson doesn’t seek to sell businesses: AT&T has “yet to have found a benefit for selling off rural access lines,” he said. Stephenson also disagreed that AT&T should sell the YellowPages business. The directory business is “close to our core” and “represents a very unique distribution channel,” he said.