(Reuters) – AT&T Inc is considering offering cordless phone plans that are partially subsidized by advertising as soon as a year from now, CEO John Stankey said in an interview Tuesday.
The consideration, which has not previously been disclosed, underscores AT & T’s obligation to the advertising company as the U.S. telephone company reviews its portfolio to identify assets to be sold to reduce the debt burden. AT&T is considering selling its advertising device Xandr, sources familiar with the matter have told Reuters.
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Various companies including Amazon.com Inc, Virgin Mobile USA and Sprints Boost Mobile have been testing ad-supported phone services since the early 2000s, but they have not caught on. AT&T hopes that better advertising targeting can revive the idea.
The planned launch of an ad-supported version of AT & T’s video streaming service HBO Max next year will serve as a “basic element” that will provide new advertising inventory and will be the key to new phone plans supported by ads, Stankey said without offering details.
Stankey said ad-supported phone plans could be introduced in “a year or two.”
AT&T engineers create “total customer identifiers,” Stankey said. Such technology enables marketers to identify users across multiple devices and show them relevant advertising.
The ability to fine-tune ad targeting would allow AT&T to sell ads at higher prices, he said.
AT&T has invested in developing targeted advertising on its own media properties using data from its telephone, TV and Internet customers, but the company has been “slower in getting up to the curve” in expanding its marketplace, allowing advertisers to to use AT&T data to target the audiences of other media companies, Stankey said.
In March, AT & T’s Xandr entered into an agreement to partner with Walt Disney Co. and AMC Networks to allow advertisers to purchase television commercials across networks.
AT & T’s advertising market, which incorporates data outside of AT&T, may face privacy challenges as consumers express growing concern about tracking their media use across platforms and laws passed by the California Consumer Privacy Act.
“I do not know if we can trust it all the time,” Stankey said, referring to the use of non-AT&T-owned data.
Stankey, who last week wrote an oath to Politico that the US government should provide subsidies to encourage companies to build fiber broadband networks in underserved areas, said in the Reuters interview that AT&T believes it could double its fiber footprint , if it had financial incentive.
Fiber or fiber optics are thin cables that are often installed underground that enable businesses to provide Internet services for the home. AT&T uses fiber to provide Internet to homes and businesses as well as to operate its 5G network.
AT & T’s fiber currently passes 18 million homes in the United States. The company could grow that number by 3 million to 5 million homes a year, he added.
Reporting by Sheila Dang in Dallas; Helen Coster, Krystal Hu and Kenneth Li in New York; Editing by Cynthia Osterman