Q1 Wireless Gains Can’t Help AT&T Chase Down Verizon

AT&T slightly missed analyst expectations on its first quarter earnings report this week, despite solid growth on the wireless data side of the business and record smartphone sales.

The company reported net income of US$3.7 billion, a slight increase from the $3.6 billion it reported a year earlier. At $31.34 billion, revenues were down 1.4 percent from the previous year.

AT&T’s quarter was especially helped by the consumers that continue to turn to their smartphones and tablets for their connectivity needs. The company’s wireless data revenues were up 21 percent from the same time a year earlier, with overall total wireless revenues also up 3.4 percent compared to a year ago.

Many of those wireless customers were new ones. AT&T added 296,000 wireless postpaid customers and 1.2 million new smartphone subscribers. Smartphones accounted for 88 percent of AT&T’s postpaid phone sales. The company said it sold 6 million smartphones during the quarter.

To get a more detailed picture regarding AT&T’s new customers, it’s important to consider another big data-eater — tablet computers, said Jonathan Chaplin, director of equity research at Credit Suisse.

“Net adds of 296,000 were above our estimate. However, stripping out the 365,000 in tablet adds reveals that phone net adds were negative,” he told the E-Commerce Times. “AT&T attributed the anemic postpaid phone net adds to lower promotional activity. We expect net adds to remain flat sequentially as these trends continue.”

AT&T did not respond to our request for further details.

Taking on the Competition

AT&T stock took a hit in after-hours trading Tuesday and continued to trade down to about $36.80 per share going into Wednesday afternoon.

“We remain cautious on AT&T, given unsurprising operating trends and a high valuation,” Chaplin said.

Adding to the caution with AT&T is the company’s ongoing battle with Verizon for the top spot in the wireless market. AT&T is showing it can outcompete T-Mobile and Sprint, but it hasn’t been able to win against the nation’s largest provider.

With the market becoming more saturated, well-established companies like AT&T must switch focus with their strategy, said Jeff Kagan, tech analyst and consultant. AT&T is doing a decent job of converting its longtime consumers to more lucrative smartphones and tablets, while its competitors might still be simply trying to draw as many customers as possible.

“AT&T was the first company that started the trek into the smartphone world,” he told the E-Commerce Times. “Years later Verizon joined in. So if AT&T is years ahead of Verizon, it makes sense that their customer base would mature more quickly. The wireless industry is a rapidly growing place that changes regularly. That means over the next few years Verizon will look similar to AT&T today.”

Evolving Market

That market change means AT&T can focus on leveraging market changes such as LTE and other wireless opportunities that are just beginning to emerge in industries such as retail, healthcare and automotive, said Kagan.

“Wireless is not just about wireless any longer,” he noted. “We see AT&T expanding into other areas. Growth in wireless will come from helping other industries transform and use wireless to grow, such as automotive, where the Internet is in the dashboard.”

It’s important to keep long-term growth possibilities in mind when considering AT&T’s place in an evolving market.

“I don’t see any real problem here,” Kagan said. “This is the way the industry has always grown and changed. Industry after industry needs wireless, and that will be one significant and new growth engine for the industry going forward. This is something that AT&T has clearly in their focus.”

Leave a Comment

Please sign in to post or reply to a comment. New users create a free account.

Related Stories

How often do you update your passwords?
Loading ... Loading ...

CRM Buyer Channels

SPONSORED CONTENT

Implementation of a New CRM Should Be Easy

Zoho - CRM Should Be Easy
When CRM implementations fail, it's often because the product and its setup process are too complicated, time-consuming, and difficult for users to buy in. (Image Credit: Zoho)

Did you know that a third of all CRM implementations fail? That’s the conclusion of research cited by the Harvard Business Review. The same study found that one of the main reasons CRM implementations fail is that they’re too complex and don’t have a clear focus.

This is hardly surprising. Many CRM applications are highly complex. Migrating data to a new CRM, and getting everyone to use that CRM, is an involved task at the best of times. And the way many CRMs are built, and the way they require users to interact with them, means that implementation really isn’t the best of times.

The Problem With Piecemeal

Many CRMs consist of different applications that have been bolted together through a process of mergers and acquisitions. This makes the initial implementation complicated. Technical and line-of-business staff are forced to interact with different elements of the system in different ways, which makes the learning curve steeper.

It can also lead to duplication of effort, and asking people to repeat time-consuming tasks is sure to cause frustration and put them off using the system. A CRM implementation relies on engaging with and convincing users, from the C-suite right down to the people on data entry.

The more difficult that process is, the less users are likely to complete it. And even if they do complete the initial data migration and set-up, if your users find the CRM complex, disjointed, and time consuming, they won’t keep it up to date. This is possibly the main reason why CRM implementations fail: users simply refuse to use the new platform. As a result, the data it contains soon becomes outdated and incomplete.

So, what’s the best way to avoid this and ensure your investment in a new CRM pays off?

For a start, the CRM you choose should consist of applications and functions which have been designed from the ground up to work together. Migrating data should be easy, and wherever possible, users should only have to do it once to get their data populated to all relevant apps with the right permissions.

Companies should also look for signs that the relationship will be based on trust, right from the start. For instance, if the CRM vendor wants to charge a lot of money to help you overcome the complexity of the integration process, that’s potentially a sign that they view their customers as an ATM.

Users should find the CRM easy to get to grips with. Entering data should be an intuitive process that fits organically into each workflow. It should also be quick to do. Only this way will it become second nature to your colleagues, so that the data in the CRM is kept constantly up to date, making it relevant and actionable.

Zoho - CRM implementation

Image Credit: Zoho


Designed for Success

To make these benefits a reality, it usually works best if a CRM has been developed as an integrated and seamless whole. At Zoho, all the features and functions in our CRM suite have been built, not bought, by our own development teams. And they are all designed from the concept stage onwards to work seamlessly together.

This level of integration results in a smoother implementation process. We calculate that the average implementation of Zoho CRM takes 50% less time than it would to implement our closest competitors. Over the last two years alone, we have helped users implement our CRM 30,000 times.

With the right technology, the right approach and the right partner, your CRM implementation won’t just succeed. It will give you the agility your company needs to respond faster to changing customer trends and preferences, in a market that evolves more rapidly with every passing day.

Get your free eBook from Zoho:
Top five things to consider when choosing a CRM System in 2022

Zoho Corporation

About Zoho
Software is our craft and our passion. At Zoho, we create beautiful software to solve business problems. We believe that software is the ultimate product of the mind and the hands.

Leave a Comment

Please sign in to post or reply to a comment. New users create a free account.

Related Stories