We previously analysed the SWOT Analysis of a multinational telecommunications company, Verizon. In this article, we’ll take a close look at the SWOT Analysis of AT&T, its competitor.
AT&T is an American telecommunications company that offers long-distance and other telecommunications services. It is the world’s largest firm and a telecoms industry benchmark.
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Before we begin with the SWOT Analysis of AT&T, let us learn more about the firm, its founding, services, financial status and opponents.
American Telephone and Telegraph (AT&T) is a public corporation based in the United States, Mexico, and Latin America that provides communication and digital entertainment services. Dallas, Texas, is where the company’s headquarters are located.
The company was founded by Alexander Graham Bell in 1877. Its distinct selling feature is that it is one of the country’s oldest and largest mobile and fixed-line telecommunications service providers and a pioneer in providing a wide range of services.
“To offer the best entertainment and communications experiences in the world,” says AT&T. For more than 140 years, AT&T has been altering the way people live, work, and play as the first genuinely modern media corporation.
|Founder||Alexander Graham Bell|
|Origin||New York, United States|
|No. of Employees||230,000|
|Market Cap||$177.66 Billion (2021)|
|Annual Revenue||$171.76B (2020)|
|Net Income||$-5.369B (2020)|
Services of AT&T
Following are the services provided by AT&T –
- Telephone services
- Long-distance calling
- Internet services
Competitors of AT&T
Following are the major competitors of AT&T –
- Frontier Communications
SWOT Analysis of AT&T
Conducting the SWOT Analysis of AT&T enables an organization to identify the internal strategic factors such as -strengths and weaknesses & external strategic factors such as – opportunities and threats.
1. Strengths of AT&T
- Market Leader: With a 44.8 per cent market share of wireless subscriptions in the first quarter of 2021, AT&T is the world’s largest telecommunications company and the largest supplier of mobile telephone services in the United States. As of FY2014, AT&T has 120.6 million cellphone customers, 19.9 million landline customers, and 16 million broadband customers. This allows the company to benefit from economies of scale, a quicker sales cycle as a result of increased market awareness, and automatic inclusion in product reviews.
- Increased brand value through CSR Initiatives: During natural disasters such as hurricanes, numerous earthquakes in Mexico, and wildfires in Northern California, AT&T provides substantial help by keeping customers connected to their friends, family, and companies via free call, text, and video. In order to aid recovery efforts, the company launched a number of text-to-donate initiatives for consumers and internal donating employees. AT&T aspire, their signature education programme has invested $400 million to promote access to education and career training. The Mexican Center for Philanthropy has named AT&T the most socially responsible company in Mexico.
- Huge Infrastructure: For the company’s back-borne, the corporation has a massive network of wireless and wired networks with the world’s most modern internet protocols. For the company’s flawless service delivery, this is a significant edge over its competitors. On a typical business day, AT&T’s global backbone network carries roughly 82.8 petabytes of data traffic. This network is capable of handling the company’s massive traffic volume.
- Reputable Brand: AT&T is ranked 11th on the Fortune 500 list of corporations. The corporation is ranked eighth overall on the JUST 100 list of America’s top corporate citizens, and first among telecom companies on the same list. In the Brand Finance directory, AT&T is ranked seventh. It is worth $59.904 billion in terms of brand value. This offers them a significant advantage.
2. Weaknesses of AT&T
- Increased Debt: AT&T has been taking on more debt in recent years to fund acquisitions and other incentives, such as the 5G rollout. With other financial responsibilities, this increasing debt might put pressure on AT&T’s balance sheet, potentially robbing it of cash that has allowed it to maintain its position as an industry leader.
- Limited R&D Investment: Some of the world’s most successful technology companies spend a significant amount of money on research and development to help them innovate and come up with innovative solutions to their customers’ problems. While AT&T spends more on R&D than the industry average, it falls short of what its competitors do.
- This can be seen in the way businesses like Verizon and T-Mobile have jumped ahead of the competition by launching new technology like 5G. AT&T needs to revamp its research and development approach to ensure that it helps the firm lead some of the important technological advancements.
- Lack of Flexibility: AT&T’s massive size and complex structure make it difficult for it to react to a rapidly changing cellular market. Other organisations can make changes to their discount payment plans and data services more regularly without upsetting their large consumer base. AT&T must also be aware of shifting FCC regulations that may have an impact on its ability to acquire spectrum and capacity.
3. Opportunities for AT&T
- Environmentally-friendly operations: As the world moves toward green solutions, AT&T can seize the chance to expand its green operations and position itself as a totally green firm. Companies like Google and Facebook have already made significant progress by ensuring their operations are completely environmentally friendly. While the company seeks to expand globally, there is an opportunity to prioritise this because it will benefit the brand and put it on the correct track to supremacy.
- Cloud Computing and Internet of Things: Telecommunications firms can no longer depend only on voice connectivity. The market for voice services is dwindling by the day, and such businesses must rebrand and reposition themselves as technological businesses. There is numerous potential for a behemoth like AT&T to enter new markets, such as cloud computing and the Internet of Things.
- They can use their existing customer base to bundle these packages with existing customers or rely on brand loyalty to attract a steady stream of new clients for these services.
- Acquisitions: The business just agreed to pay $48.5 billion in cash and stock to acquire DirecTV. The arrangement allows AT&T to grow its video offerings and negotiate content agreements with the country’s top media sources, despite the fact that the pay-for-television market is quite mature. In addition, the deal gives the business access to DirecTV’s 18 million Latin American subscribers, enhancing cash flow and providing yearly cost savings in the range of $1.5 billion over the next three to five years.
4. Threats to AT&T
- Increased number of competitors: AT&T is facing stiff competition, which includes not only industry giants like T-Mobile and Verizon, but also smaller players like Cricket, Sprint, and US Cellular. Because of their flexible plans and unbeatable rates, these rivals are increasingly eroding AT&T’s market share. Since the US market is currently saturated, AT&T will have a tough battle to maintain its dominance if it does not enter new regions.
- Price Wars Continue: Sprint has launched a new campaign specifically aimed at Verizon (VZ – Free Verizon Stock Report) and AT&T. If users switch to Sprint, their wireless bills will be cut in half. Customers who choose a plan and port their numbers to Sprint will receive unlimited speak and text on Sprint’s network, as well as data at half the cost of their previous plan. These agreements may hurt AT&T’s market share in the future.
- Reduced Regulation for Legacy Services: For legacy services comparable to AT&T, there has been a drop in regulatory levels. The expenses of alternative service providers in the telecom sector have been dramatically decreased as a result of this. With decreased entry barriers, the industry has seen an increase in new participants. This will not only continue to drive down revenues, but it will also drive down market share.
With this, we come to the conclusion of the SWOT Analysis of AT&T. In the below section, let’s summarise the takeaways of this case study.
The telecommunications business in the United States is highly volatile, and AT&T is up against some formidable competitors. It does, however, have some substantial advantages that keep it ahead of the stock, although only by a hair.
In certain ways, Verizon, the main challenger, is ahead of T-Mobile, and the contest might be termed a three-horse race, with each party having major advantages. However, this market is massive, and AT&T has the perfect mix of assets to maintain its position, owing to strategic acquisitions that allow it to enter new markets and expand its subscriber base.
AT&T already has a strong standing marketing strategy, however, if they up their digital marketing strategies, they won’t solely gain from its pocket-friendliness, but will reach a larger audience than normal via various channels such as SEO, emailing, content marketing, SMM and more.
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