2007

Group 8Oh Kwang ShinPeng Yee NarTong Nguyen Quynh TramTran Nguyen Thuy DuongTran Quang HienVu Tung Lam

US Mobile Service Industry

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AgendaAgenda

• Background• SWOT Analysis• Recommended Strategy• Current Pricing Plan• Unique Pricing Strategy• Final Remark

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Background - USBackground - US• Area

– 3.79 million square miles (9.83 million km²)– Singapore: 271.8 square miles (704 km²)

• Population– Over 300 million– Singapore: 4.68 million

• Federal Constitutional Republic– Comprising 50 states and a federal district– Different rules in different states

• Largest national economy in the world

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Background – Background – US Mobile Industry US Mobile Industry

• Many mobile operators– Nation-wide: cover >80% population area

• AT&T Inc., Verizon, Sprint Nextel and T-Mobile– Region-wide: within several regions– Mobile Virtual Network Operators (MVNO)

• Do not own or operate a wireless network• Resell wireless service under their brand name

• Heterogeneous technologies– 3rd generation: UMTS, CDMA 1xRTT/EV-DO– 2nd generation: GSM, CDMA, TDMA, iDEN– 1st generation: analogue technology (AMPS)

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Background –Background –Stock PriceStock Price

AT&T Inc.

Sprint Nextel

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Strengths

SWOT AnalysisSWOT Analysisof AT&T Inc.of AT&T Inc.

Helpfulto achieving the objective

Harmfulto achieving the objective

International coverageEnterprise experienceStrong market strategyInnovative products

High churn ratePoor customer satisfactionCash flow problem

Acquisition planSales of iPhones

iPhone security hackThreat from competitorNon-telecom industry(Google Inc.)Saturated market

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Recommended StrategyRecommended Strategyfor AT&T Inc.for AT&T Inc.

• Continue strong market strategies and innovative products to attract customers

• Focus on young customer to achieve higher growth of subscriber

• Customer loyalty program• WiMAX – emerging technology

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AT&T Pricing PlanAT&T Pricing Plan- - IndividualIndividual

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AT&T Pricing PlanAT&T Pricing Plan - - FamilyTalkFamilyTalk

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Pricing StrategyPricing Strategy- AT&T Inc.- AT&T Inc.

• Grouping targeted users– Individual users– Business users– Family users

• Versioning in monthly minutes– 500 ~ 6000 minutes nation plans

• Bundling in FamilyTalk plans– First two lines for one low price– Each additional line for US$9.99/mth

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Unique Promotional Unique Promotional Strategy - AT&T Inc.Strategy - AT&T Inc.

• Exclusive deal with AT&T and Apple– Grab iPhone with any two-year contract

• Apple iPhone– US$399 requiring 2-year plan– 1.1 million subscribers– Roughly 40 percent of those subscribers

were new AT&T customers

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Final RemarkFinal Remark• Decrease of mobile phone subscribers growth rate• Strong competition

– 75% market share: AT&T Inc., Verizon Wireless and Sprint Nextel

• Heterogeneous technologies– AT&T Inc.: GSM– Verizon Wireless and Sprint Nextel: CDMA with 3G (1xRT

T and EV-DO)– T-Mobile: W-CDMA– Sprint Nextel: WiMAX-based 4G platform