MWC: AT&T’s Stephenson takes three screens philosophy global

BARCELONA – AT&T (NYSE:T) is fond of talking up its ‘three-screens’ strategy wherever its executives go, but at his mini-keynote today at Mobile World Congress AT&T Chairman and CEO Randall Stephenson put a new spin on an old tale. Rather than touting AT&T’s own multi-device convergence efforts he implored the industry to pursue the same strategy.

Citing a recent study AT&T conducted of consumer Internet behavior, Stephenson said half of all mobile data customers are consuming the same content on three or more different devices. Whether it’s watching Netflix on their PCs, tablets and TVs, or downloading music they then distribute between their digital media players, cars and stereo systems, AT&T has realized that in order for mobile data to be successful the industry has to make that transfer of content between platforms seamless.

He named one example from the wireless industry, SMS, which failed to take off until the industry established interoperability between all devices and operators. And then he pointed to Apple’s (NASDAQ:AAPL) iTunes, which almost single-handedly created the huge digital music market in part by allowing music to flow freely between its different platforms.

“iTunes has really set the pace for mobile music,” Stephenson said. “You pay for music once and listen to it on multiple devices.” Of course, Apple for the most part also restricts that freedom to within its own platform ecosystem, but Stephenson said he believes iTunes has paved the way for other companies to innovate more open music and digital content distribution models.

Stephenson said that kind of free flow of content from all platforms needs to extend to every aspect of mobile data services. Apps downloaded on one smartphone need to be able to be transferred to other phones and other devices. Content can’t be locked down to a specific device or consumers will reject it, he said.

The biggest culprit in such lock downs are video providers, Stephenson said, which have been particularly vigilant in controlling their content often at the expense of any kind of multi-platform flexibility. Stephenson warned that if the movie studios and TV networks don’t find a way to distribute content between devices more seamlessly, consumers will find a way to bypass them just as Napster circumvented music distribution channels and new peer-to-peer services are circumventing video distribution.

“If the players in the industry are slow to develop a model, customers will develop a model around us,” Stephenson said.

Stephenson spoke at a five carrier session during the Congress’ Day 2 kick off, joining the CEOs or Chairman of Vodafone (NYSE:VOD), America Movil (NYSE:AMX), Telefonica (NYSE:TEF) and China Mobile (NYSE:CHL) in discussing the key issues facing their industry. One theme they all shared was the rising demand for mobile data services and the need for new business models to monetize them. A recent study by Tellabs and CCS found that carriers rapidly are seeing the amount of revenue they collect per bit of traffic drop, which may cause many carriers to actually start losing money on mobile data services as soon as 2013.

Though the heads of the world’s largest operators were obviously concerned about the explosion in mobile data traffic, not all of them were worried whether the industry was heading toward a breaking point. Vodafone CEO Vittorio Colao said that consumers have demonstrated they will pay for content in numerous ways—operator business models just need to evolve to allow them to tap into those revenue streams. He pointed out the huge level of paid downloads among app stores as well as the digital music market and the still nascent emergence of paid digital magazine subscriptions.

“One aspect that we historically got wrong was that consumers are willing to pay for their content services,” Colao said. “We presumed they wouldn’t pay.”