Week 3: Q&A with an AT&T Insider

 

Why is AT&T performing above break-even?

AT&T increased total wireless subscriber base to 107 million and continued to lead all major U.S. wireless providers in smartphone penetration and average revenues per wireless contract subscriber. Our mobile data revenues grew 17.8 percent to a $27 billion annualized run rate. We also had increases in other products such as U-Verse.  We posted the largest annual increase in total AT&T U-verse TV and broadband subscribers to date bringing the total to more than 8 million. Additionally, U-verse revenues grew 37.9 percent at a $10 billion annualized run rate.
 

Overall AT&T revenues grew over $127 billion, the highest total in the company's history which adjusted earnings per share increased 8.5 percent.  Cash from operating activities topped $39 billion, up 12.8 percent from the previous year.

 

 Why is AT&T doing better than planned?

As consumers increasingly embrace the mobile life, teams across the company are exploring new ways to put smarter applications and seamless connectivity, literally, in the palms of consumer hands.  This has led to an unprecedented social media video explosion.  Subscribers are using data at an exponential rate which has bolstered awareness of the new LTE network.
 

Why is AT&T doing better than last period?

 A year ago AT&T identified several issues the company faced.  Our number one priority was to add spectrum, the airwaves that carry our customers’ mobile communications. We also said we would accelerate our company’s shift to growth businesses. Additionally, it was made clear that AT&T would take steps to further improve capital structure and return value to our shareowners.  As such, we continue to increase revenue while driving down operational costs. 
 

 How do social trends impact AT&T?

AT&T is a leading innovator in the technology sector.  AT&T works diligently to make the products that customers can use to enhance their daily life.  It is no surprise that customers are connecting to the internet... and staying connected.  This social trend has been on the rise for a decade but Facebook, Twitter and Linkedin have put on the afterburners and data usage is approaching stratospheric levels. As more and more social media outlets emerge, the need for mobile internet access will exponentially grow. 
 

What are some of AT&T environmental factors?

AT&T has strong competition from good reliable companies.  The company offer customer value products that continue to test AT&T innovation and marketing sense.  Another large environmental factor is the government.  AT&T spent $4 billion dollars on a deal, while somewhat risky, to solve the companies spectrum needs for the foreseeable future.  Unfortunately,  the DOJ thought this deal may stifle consumer options in the wireless arena.  As such, the deal fell through but the $4 billion was committed regardless.  Not many companies can spend $4 billion let alone spend it and not get anything in return except a tax receipt.  Another environmental factor AT&T experiences is with the handheld devices.  As newer, better, faster phones are released quicker to consumer, AT&T must be dynamic is supporting the customer needs.  Not that long ago customers were locked into a 2 yr. contract and the same phone.  Since the smartphone makers to releasing new products sooner AT&T had to adapt its marketing scheme, planning, customer care relationships very quickly to ensure customer satisfaction. 
 

Marketing can be as much as an art form as it is a science.  The science will demonstrate if the company is meeting its objectives.  The science will reveal true breakeven and more importantly... profit.  However, there is an art to all this.  The brand manager doesn't just  look at numbers on performance statement.  The brand manager will conduct situational analysis and then look at the industry.  There are even the occasional inventions that analysis and research just go out the window.  Remember the story about a small company that built the first personal computer while working out of a garage because they could? Even thought others had research data that stated they shouldn't...