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2007 Group 8 Oh Kwang Shin Peng Yee Nar Tong Nguyen Quynh Tram Tran Nguyen Thuy Duong Tran Quang Hien Vu Tung Lam US Mobile Service Industry
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2007
Group 8Oh Kwang ShinPeng Yee NarTong Nguyen Quynh TramTran Nguyen Thuy DuongTran Quang HienVu Tung Lam
US Mobile Service Industry
US Mobile Service Industry 14 Nov 2007 2
AgendaAgenda
• Background• SWOT Analysis• Recommended Strategy• Current Pricing Plan• Unique Pricing Strategy• Final Remark
US Mobile Service Industry 14 Nov 2007 3
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
US Mobile Service Industry 14 Nov 2007 4
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)
US Mobile Service Industry 14 Nov 2007 5
Background –Background –Stock PriceStock Price
AT&T Inc.
Sprint Nextel
US Mobile Service Industry 14 Nov 2007 6
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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US Mobile Service Industry 14 Nov 2007 7
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
US Mobile Service Industry 14 Nov 2007 8
AT&T Pricing PlanAT&T Pricing Plan- - IndividualIndividual
US Mobile Service Industry 14 Nov 2007 9
AT&T Pricing PlanAT&T Pricing Plan - - FamilyTalkFamilyTalk
US Mobile Service Industry 14 Nov 2007 10
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
US Mobile Service Industry 14 Nov 2007 11
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
US Mobile Service Industry 14 Nov 2007 12
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
