AT&T Mobility CEO sees record customer loyalty by 2015

AT&T believes customers will stick even tighter to its wireless service over the next few years.

The company expects to hit a record-low rate of customer turnover by 2015, according to Ralph de la Vega, chief executive of AT&T's mobility arm. He was speaking today at the company's investor conference in New York.

De la Vega was his usual bullish self and threw out several stats to back up his optimism. In addition to the customer turnover rate estimate, he said he expects 90 percent of its customer base to own a smartphone by the same time, which would yield higher revenue and profit for the telecommunications giant.

De la Vega and the rest of the AT&T leadership were in New York to lay out its grand plan to invest $14 billion over the next three years to upgrade its wireless and wireline network under an initiative dubbed Project Velocity IP, or VIP.

AT&T was in town to address questions about where the company's growth would come from. With voice and text messaging services mature, the company will increasingly rely on what de la Vega calls a "fourth wave" of growth, which includes its home security initiative, nationwide alternative phone service, connected cars, and mobile payments through the Isis joint venture with Verizon Wireless and T-Mobile USA.

Meanwhile, the investment to expand 4G LTE, as well as the plan to pack in smaller cell sites to improve reliability and coverage in bigger cities, should lead to better customer loyalty through improved service, de la Vega said. Also designed to help build customer loyalty are its recently created family plans for data services.

In answering critics who may question his bullish projection, de la Vega noted that AT&T was able to weather losing its exclusive agreement to sell the iPhone, and in fact has continued to lead the country as the largest iPhone provider. In the last quarter, AT&T sold 4.7 million iPhones. That figure was disappointing to investors but more than any other U.S. carrier.

AT&T has 2 million data share customers, and 15 percent of them have come from legacy unlimited plans, de la Vega said. He believes those plans will also promote the use of other devices beyond smartphones.

"It's gonna be raining tablets," he quipped.

He added that two-thirds of AT&T's contract customers will be on capped data plans by the end of next year.

The focus on data has been a priority for wireless providers over the last few years, as growth and usage exploded. AT&T said that data use has jumped 25,000 percent over the last five years as the smartphone base has grown by 500 percent.

The use of data will only increase as AT&T starts to deliver other services beyond traditional cellular voice, text message, and data. De la Vega called it a "new opportunity that takes advantage of our data platform" and said it represented a "multi-billion dollar opportunity."

More importantly, customers who sign up for those different "Digital Life" services are even less likely to leave AT&T, de la Vega said.

"Believe or not, it gets even better," he said.