American Telephone and Telegraph (AT&T) is a public company established in the United States, Mexico, and Latin America that offers digital entertainment and telecommunication services. The headquarter of AT&T is situated in Dallas, Texas. Alexander Graham Bell launched the company in 1877. Its unique selling point is that it is a pioneer in delivering a wide variety of services and is one of the country’s oldest and biggest mobile and fixed-line telecommunications service providers. (1). AT&T is valued at more than $266 billion and has more than 182.56 million cellular customers as of 2021. It is the most profitable telecommunications company in the United States, with average annual revenue of 171.76 billion dollars. It is ranked at the very top in terms of revenue and the number of consumers serviced. (2).
SWOT ANALYSIS OF AT&T
A SWOT analysis is an essential tool for any organization in today’s competitive market. By doing a SWOT analysis, AT&T will gather valuable insights that will be important for its competitive advantage. The SWOT analysis of a firm provides information on the company’s strengths, weaknesses, opportunities, and threats. AT & T will receive the benefits of operating at the highest efficiency level if they consider doing SWOT analyses constantly.
Strengths of AT&T
Brand Value: AT&T is placed 11th on the Fortune 500 list of the world’s most powerful businesses. As a result, it is placed eighth overall on the JUST 100 list of America’s most ethical corporations and first among telecom businesses on the same list. AT&T is placed seventh in the Brand Finance ranking of Fortune 500 companies. In terms of brand value, it has a market capitalization of $59.904 billion. (2).
Market Leader: With a 44.8 percent market share in the first quarter of 2021, AT&T is the world’s largest telecom company. As of 2014, the country has 120.6 million cellular subscribers, 19.9 million landline users, and 16,000 broadband. This increases market exposure, sales cycles, and product reviews. (2)
Large Customer Base: In the second quarter of 2021, AT&T had the largest number of customers it has had since 2017. By the end of the second quarter of 2021, the firm had 191.65 million connections and mobility customers. It has grown by 58 million users, as the firm has streamlined its approach to core telecom services and simplified its business model. (2)
Massive Infrastructure System: With the most recent internet protocols, the company has a large wireless and wired networks network. AT&T’s worldwide backbone network transports around 82.8 petabytes of data every day. This network can handle the company’s tremendous traffic. (1).
Related Reading: Strengths of Google
Weaknesses of AT&T
Lack of Flexibility: AT&T’s size and complexity may limit its flexibility. This is due to the unstable telecommunications and technology environment caused by global changes. Giant firms have a tougher time responding to minor changes than smaller companies. (3).
Limited Investment in the R&D Sector: While AT&T spends more on R&D than its competitors, it falls short of its competition. Companies like Verizon and T-Mobile have jumped ahead of the curve, introducing new technology like 5G. Aside from investment, AT&T has to rethink its R&D approach to lead important technology advancements, as other firms are doing. (3).
Increased Debt: Due to acquisitions and other incentives, AT&T has increased debt in recent years. Rising debt might stretch AT&T’s balance sheet with additional payment responsibilities, denying it of cash that has enabled it to remain an industry leader. (3).
Poor Demand Forecasting: Demand forecasting helps companies manage resources and avoid downtime. AT&T’s poor demand forecasting leads to additional missed chances. Their in-house and in-channel inventory increases. High-day inventory wastes resources. As a result, it is delaying AT&T’s long-term growth plans. (3).
Related Reading: Weaknesses of Microsoft
Opportunities for AT&T
Environment-Friendly Operations: In integrating sustainable solutions, AT&T may extend its green operations and establish itself fully green. Google and Facebook, for example, have already made tremendous headway in reducing their environmental impact. When a firm aims to develop worldwide, there is a chance to prioritize this for the sake of the brand’s dominance. (4).
Acquisitions: It recently agreed to buy DirecTV for $48.5 billion in cash and shares. The deal permits AT&T to expand its video services and negotiate content deals with key media outlets despite the mature pay-TV industry. The agreement also provides the company access to DirecTV’s 18 million Latin American customers, boosting cash flow and saving $1.5 billion annually for the next three to five years. (1).
Cloud Computing and Internet of Things: Providing simply voice connection is no longer viable. As demand for voice services declines, these companies must rebrand and become technology companies. A company like AT&T may enter new markets like cloud computing and IoT. (4).
Growth Rate Expectations: By 2028, the market is predicted to rise to USD 2,467.01 billion at a compound yearly growth rate of 5.4%. Despite the company’s best efforts, there is still room for development. (2).
Related Reading: Opportunities for Yahoo
Threats for AT&T
Intense Competition: T-Mobile and Verizon, as well as smaller companies like Cricket, Sprint, and US Cellular, are all vying for T&T’s market share. These competitors are eroding AT&T’s market share because of their flexible plans and incomparable prices. For AT&T to remain dominant in the US market, it will need to expand into other markets. (3).
Price War: Sprint has started a new ad targeting Verizon and AT&T. Switching to Sprint reduces cellphone expenditures by half. Customers who migrate their numbers to Sprint will get unlimited talk, text, and data for half the price of their old plan. These deals may eventually affect AT&T’s market share. (3).
Economic Recession: As a result of the US economy’s poor performance, AT&T’s revenues have been negatively impacted. As a result of the current economic recession, the firm has been forced to decrease its workforce and even lay off workers. AT&T’s long-term viability might be affected by these concerns, allowing the competitors to close the gap. (3).
The threat of Regulations: The prospect of future regulation will impact the company’s value and revenues. Any American corporation investing abroad must follow US laws. For example, AT&T must submit license and tax applications with the government to operate internationally. AT&T agrees with the US government to abstain from immoral measures such as eavesdropping and data tapping on the American public. (3).
Related Reading: Threats for SpaceX
Recommendations
After doing a SWOT analysis, we concluded that the telecommunications sector in the United States is very volatile and that AT&T is up against some powerful rivals in the market. AT&T already has a strong marketing strategy in place; however, by increasing their digital marketing strategies, they will not only benefit from the lower cost of digital marketing, but they will also reach a larger audience than usual through various channels such as SEO, emailing, content marketing, social media marketing, and more.
References
- https://www.reuters.com/companies/T.N
- https://www.grandviewresearch.com/industry-analysis/global-telecom-services-market
- https://iide.co/case-studies/swot-analysis-of-att/
- M. E. Porter, Competitive Strategy(New York: Free Press, 1980)
- https://finance.yahoo.com/news/sprint-offer-targets-t-t-195641701.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAIDkDlfvCJkqVBBQ9XmhEFUlMlsuV5nuSy8tBazGlb3i4Li1hwswWKUXVQWSOUcztJa575OMegLeDHLJTaZIK2h9zyNK-Ih9wggjv6CnGhI4uoHBkjCa93iebEJhIW4_fsAVzm0dBFshld9onXfy78sjuckkmeIsdI_3aEkxax_w
