AT&T is among the leading telecommunications companies based in the United States. In the last few years, the company has made some strategic investments based on the changing market dynamics and consumer demographic changes which have started bearing results. However, the business of AT&T is not limited just to the United States but also spans several other markets in the world. It is a holding company and its sales and subsidiaries operate in the telecommunications media and technology industries in many parts of the world. During the last two years, the company has enjoyed consistent growth in its revenue. In 2019, the net revenue of the company was around 6.1% higher than the previous year. The company’s subscriber base of mobility services grew to 165.9 million compared to 151.9 million during the previous year. The company added around 14 million net new subscribers during fiscal 2019.
This is a marketing mix of AT&T highlighting the seven P’s that will help you understand AT&T’s business and marketing strategy.
AT&T is a leading telecommunications services provider based in the US. The company has enjoyed impressive growth during recent years. It provides a large range of communications and mobility products and services. The company has divided its business into four operating segments that include: (1) Communications, (2) WarnerMedia, (3) Latin America, and (4) Xandr. Communications is the largest operating segment of AT&T followed by Warner Media based upon annual net revenue generated by each segment. In 2019, the communications segment which includes the mobility services generated $142.4 billion in revenue compared to $143.7 billion in 2018. This segment experienced a decline of 0.9%% in the annual net revenue. However, the second-largest operating segment of AT&T, Warner Media experienced solid growth in 2019 compared to the last year where its revenue rose to $33.5 billion from $18.9 billion in 2018.
The communications segment of AT&T offers its services to businesses and customers in the US as well as overseas. It is divided into three subsegments that include mobility, entertainment group, and business wireline.
The mobility group which is the largest among the three subsegments provides nationwide wireless services and equipment. The mobility segment generated $71 billion in revenue in 2019 followed by the entertainment group which generated $45.1 Billion in the same year. The number of total subscribers of mobility services grew to 165.9 million in 2019 from 151.9 million during the previous year.
Apart from providing video, including over-the-top (OTT) services, broadband and voice communications services to residential customers, this segment also sells advertising on DIRECTV and U-verse distribution platforms.
This segment provides advanced IP-based services, as well as traditional voice and data services to business customers.
The Warner Media segment is the second largest segment of AT&T. It accounted for nearly 18% of the company’s revenue in 2019 compared to 11% in the previous year. This segment of AT&T develops, produces and distributes feature films, television, gaming, and other content over various physical and digital formats and is composed of three units. These units include Turner, Home Box Office, and Warner Brothers.
Latin America Segment:
The Latin America segment is the third-largest segment of AT&T that accounted for nearly 4% of the company’s revenue in 2019 compared. It is composed of two business units that include Mexico and Vrio. The Mexico segment offers wireless services and equipment to the customers in Mexico whereas Vrio offers video services mainly to the residential customers in the Latin American region and the Caribbean.
Xandr is the smallest business segment of AT&T which accounted for 1% of the company’s revenue in 2018 and 2019. It mainly provides advertising services and utilizes data to offer targeted advertising across video and digital platforms.
After wireless services, ‘subscription’ is the second-largest source of revenue for the company followed by advanced data and equipment. Advertising is among the smallest sources of revenue for AT&T and constituted just around 3% of its net revenue in 2019. Wireless which is the largest source of revenue for the company accounted for around 31% of its net revenue in 2019.
AT&T has also released 5G services globally. Consumers can access its 5G services using select 5G smartphone models across 190 markets.
AT&T has its headquarters in Dallas, Texas, United States. However, the company offers its services in more regions of the world apart from the United States. As already discussed in the product section, AT&T sells its services across Latin America and the Caribbean as well. Geographically, Europe, Mexico, and Brazil represent important markets for the company apart from the United States.
The global reach and industry leading position of the company give it some extra advantage in terms of pricing. The company uses its position to price its products and services profitably. However, the pricing pressure in the US and the global telecom industry has continued to grow and AT&T’s pricing structure somewhere leaves it vulnerable against competition.
The company continues to lose customers across several segments including post-paid to the competitors in the US and abroad that offer services at competitive prices. Government-owned or subsidized networks that are able to price their services more competitively also continue to pose a threat to the subscriber base of the company. The company will have to adopt a more competitive pricing strategy in order to reduce the churn rate. The residential customers are especially a bit price sensitive and retaining them requires customer-friendly pricing of products and services. AT&T utilizes various types of plans in varying price tiers to cater to its customers’ needs efficiently. Usage-based pricing has however proved favorable for the company helping it grow its customer base faster.
AT&T is a well-known name in the world of telecom not just in the US but globally. Its strong reputation in the global market offers it a strong advantage against the competition. Due to its strong image and reputation, the company enjoys a strong edge over its rivals in terms of marketing. It mainly uses digital channels for marketing and promotions. Apart from its own websites and apps, the company also uses social media for promotions and customer engagement. It also utilizes its online sales channel for sales and promotions. Its large size and global scale also offer the company heavy media publicity. The company has around 6.7 million followers on Facebook. Its mission statement is :
Inspire human progress through the power of communication & entertainment.
However, brand image and reputation have grown in value in terms of marketing. Stringer image is essential for customer retention and sales growth. Therefore, AT&T also invests in corporate social responsibility in order to strengthen its social image and grow its reputation stronger.
People or the human capital of a company is a strong source of competitive advantage for the brand and large companies like AT&T continue to focus and invest heavily in recruitment and employee retention. As of 2019, the company employed around 247,800 people. In January 2020, this number stood at around 246,000. The chairman and CEO of AT&T is Randall Stephenson.
Over the years, AT&T has continued to grow its focus on simplifying processes and upgrading the level of customer service. This has resulted in higher customer loyalty and continuous improvement in service quality. The company has also focused on managing its digital services in a manner that it can offer superior customer experience compared to its competitors. Simplification of processes has also resulted in higher customer convenience which boosts retention rate and revenue growth. The company now offers a large number of services online that customers can easily obtain and pay for.
The company has established a large network of branded stores in the United States that works to continuously grow its customer base and make its product and service available widely in every corner of the country. The United States is also the largest market of AT&T where the company has established an omnichannel distribution network. There are 5.678 AT&T stores in the United States. The AT&T logo differentiates its products and services from the crowd of telecom brands in the country and abroad. The company has also established a strong physical infrastructure overseas to strengthen its market position in other countries including China.