AT&T Company Analysis (Essay Sample)

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AT&T Company Analysis
History
AT&T is a US-based telecommunications company. It is listed on the American stock market as among the Standard & Poor’s 500 firms. According to S&P 500, it is the ranked 23rd globally using its revenues, profits, assets and market value. In the global telecommunications industry, it is ranks 18th with approximately 126.4 million clients as of 2015. Initially, AT&T was founded in 1983 as Southern Bell Communications Inc. being among the regional holding companies created to hold AT&T Corp.’s local telephone communication companies. In 1984, SBC Communications Inc. broke off from AT&T Corp. through a court ordered antitrust ruling. It became an independent telecommunications service provider before merging with one of the company’s branches in 2005. The company's name changed from SBC Communications Inc. to AT&T Inc due to the merger (Salamone 50).
In addition, it became the best providers in communications around the globe. SBC Communications Inc. was a monopoly in the industry until 1982,when other telecommunications firms including MCI and Sprint emerged. AT&T's headquarters is in Dallas, Texas and has a total workforce of 248,000 employees. The company’s mission is ”to be the world’s best at bringing individuals together creating a connection between them and availability of the services and information they want and need anytime, anywhere (Salamone 52).” It uses the AT&T brand name to market all the telecommunications services and products. Research indicates that AT&T Inc. generates annual revenues of $130 billion. The company attributes its success to a set of grand strategies and long-term objectives that have helped to achieve sustainable, competitive advantage and enhance its strategic position over local competitors.
The company’s operations are segmented into wireless and landlines where they sell their products and services. AT&T Inc. provides products and services ranging from wireless communications, local and long-distance phone calls, Internet, video, telecommunications gadgets, managed networking and wholesale services. The wireless segment deals with nationwide wireless voice and data communications services while the landline segment involves retail and wholesale communication services both regional and globally. An overview of the products offered by AT&T Inc. evaluated according to their strengths and weaknesses to help determine the future growth.
Wireless
This product is growing steadily in the market because of the high demand for speed by consumers. Unfortunately, AT&T does not offer varying wireless broadband capabilities, which exposes them to competition by other telecommunications companies. However, the company has initiated some grand strategies concerned with combining the communications services through landline and mobile broadband on an international basis (Schwartz 33). These initiatives will ensure that they keep satisfying their clients’ needs and wants, and continue to see increases in revenue in the coming years.
Dialup Access
Research shows that most people use dialup access to connect and transfer data. The performance of the dialup modems is limited; therefore, AT&T developed WorldNet ISP services that capture a broad area of the domestic Internet market. Consumers prefer this service because it is reliable and less expensive. In their report, AT&T stated that by 2015, close to 50% of online households would be using broadband.
Digital Subscriber
AT&T Inc. benefits from DSL in providing telephone network although in the future the cable network will overtake DSL in its total user provider utility. The company uses DSL service primarily for small businesses and corporate customers. Plans are in place to expand its markets from 17 to 100 by 2020 and include cable network in those networks. The added markets will increase the revenues and stock for the company significantly.
Long Distance
AT&T Inc. is the number one company providing long distance communications in the US. In North America, it is the largest, dominant network providing long-distance network services and the biggest digital wireless network. The broadband business has been facilitated by the strength and knowledge of the long-distance network. The company’s core competencies in this service include the provision of quality services to customers, offering reliable pricing, and latest technology in mobile service across continents.
Cable Access
Using the AT&T Labs, the company is concentrating on the use of telephone services and systems in favor of cable technology. The cable access is used to market other services, reaching a large population in a short period. However, a downside to this product is the degradation in performance due to the crowding on one cable distribution system by many users. AT&T is addressing this issue by developing strategies to mitigate the limitations, for example, LightWire. The more subscribers the company acquires, the higher the revenue in the near future.
The company’s objectives are to increase the share of access lines and broadband and help small enterprises to improve their operations by providing simple and effective solutions. AT&T Inc. has been developing new technologies to satisfy the changing demands of their customers. The company provides its communications services to over 80 million subscribers including customers, enterprises, and the government. Two years ago, they introduced a new wireless product named Aio that offers non-contractual purchase of services in advance for the users. Ultimately, AT&T Inc. is the prospect of the telecommunications industry.
Market Environment
The market environment has been favorable for the growth of the company. The company has been leveraging its current capabilities and opportunities and finding new applications for their existing products. It is using new development techniques to introduce new products in the market and change their existing products to satisfy the needs and wants of their customers. AT&T Inc. announced that later in the year,2015, they would offer a new product known as Remote Office Service (ROSE). The new product will use the AT&T network to transfer calls between the telecommuting work colleagues. In the two years, the company aims to offer its clients IP-based voice calls through its cable network. It will give the customers an alternative in the local market of telephony. The company faces the risk of implementation of regulations in the cable market to allow competitiveness in the use of cable lines. Competitors will use this opportunity to convince AT&T customers to switch by using their cable system. However, to prevent this from happening, regulations governing the communications industry should be implemented. AT&T Inc. will benefit from this because it will allow for the regulation of prices and thus keep the competition at bay.
The company utilizes the business strategy outlined in the mission statement to improve their position in the Internet market, especially the consumer market. The company’s market share in the cable industry is high. In a research conducted in 1999 before AT&T acquired MediaOne, the company held a 9% market share with Time Warner leading at 18%. The market share increased to 21% after the acquisition making AT&T Inc the leading cable operator in the US. In addition, the company has collaborated with Comcast in various initiatives. All these initiatives are aimed at broadening the market for the products and services.  EMBED Excel.Sheet.8 \s 

Comcast- 8%
AT&T- 9%
Rogers- 9%
Cox- 10%
Shaw- 10%
Time Warner- 18%
Others- 24%
Total- 100%
Due to the competition in the industry, AT&T has formed a broadband and Internet division to keep up with the demands of the market in this sector. The end consumer market faces a lot of competition from companies in the Internet provider industry. Therefore AT&T has ensured that their products, services, and capabilities complement their power to meet the market demand. An entry into the industry by more competitors will affect the company’s sales in the market negatively. AT&T was a monopoly before 1982, but research shows that the market in the cable sector will have more major players in the future. It will pose a risk to the market position of AT&T Company. The customer base is expected to increase in the future because AT&T is making efforts to achieve market share of the local market customer group.
AT&T has outlined in its grand strategy: the need to broaden its market areas to attract new customers through market development. The new market areas will be differentiated according to the geographical region or demographics. Improving on the existing products is underway to cater for all customers and satisfy the ever-changing demands. All of the company’s products, cable access and wireless, will be upgraded to incorporate new technologies. Product development involves incurring perils and higher costs in implementation to develop new products for the current markets, and improving or modifying existing products. AT&T has a wide market environment and offers services and products to a wide customer base regardless of the budget.
Competitive Strengths and Weakness
AT&T’s internal environment comprises most of its competitive strengths and weaknesses. The company’s competitors include Verizon, Sprint Nextel, and T-Mobile. Recent entrants into the market have been using lower prices to attract customers and other practices that regulatory agencies lack control over thus posing a cha...