AT&T Inc has just revealed its quarterly report, and it is not looking good. The actual earnings are lower than expected and they don’t reflect the work the company put in several projects across the first quarter. While the company offered a broader range of services than usual, customers preferred to stick to their phone plans. As such, despite efforts, AT&T remained just a phone company. At the same time, rivals managed to gain more influence due to new campaigns on unlimited data plans.
The Phone Company Pulled Its Last Ace up Its Sleeve, Namely Unlimited Data Plan
Om Tuesday, the Number 2 wireless carrier in America reported lower than expected performance during the first financial quarter of the year. The company showed that it lost 191,000 monthly postpaid subscribers. AT&T, as well as the leader of the telecom industry Verizon, is competing with ambitious companies such as Sprint Corp and T-Mobile U.S. Inc for market share. U.S. consumers are now just a mature target public for companies. People are already in possession of cell phones which leaves little room for At&T and others to develop their businesses. At the same time, Verizon reported the first loss during a financial quarter in its history.
To revive public enthusiasm once more, companies resorted to their ultimate strategy, namely unlimited data plans. Even the number one carrier in U.S. had to join the movement and offer limitless resources for customers for the first time in more than five years.
Randall Stephenson, the Chief Executive at AT&T, explained the low quarterly performance as a slow adaptation to the latest trends. The company decided to first cut its prices before moving on to what customers really wanted, which is unlimited data plans.
“Our response to the unlimited data plans was probably a little slow.”
AT&T Hopes to Attract Momentum in the Television Industry
As a consequence, AT&T wants to distance itself from the image of just a phone company. The organization has invested large funds in other industries as well. Through its DirecTV Now service, AT&T wants to obtain more influence in the streaming domain. Moreover, it wants to become the owner of the “Game of Thrones” pop culture movement by purchasing the ownership over Time Warner.
As such, the total operating revenue slipped almost 3% to $39.37 billion. However, behind this stagnation were poor sales of wireless handset products. Moreover, the company refused to calculate full-year revenue estimations as they are too volatile to take into consideration.
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