This group project was completed to analyze the long term feasibility of AT&T Family Plan offering as it stood in 2011.

1. AT&T
FEASIBILITY PLAN
CSR 404 - Group 9:
James Turner
Arneetrice Thompson
Brittany Amari
Courtney Cox
Justin Siller
Patrica Chen

2. CSR: 404 AT&T: FEASIBILITY PLAN Group 9
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Introduction
Our business case takes a look at AT&T, INC position in the marketplace specifically concerning their
family plans targeted at the consumer market. AT&T is publically traded national provider of wireless
telecommunication services in the United States that was founded in 1983 from a combination of baby
bells. The company currently trades on the New York Stock Exchange and is valued at over 173.13 billion
dollars as of November 18, 2011. Their mission is to connect people with their world; everywhere they
live and work, and do it better than anyone else.
Technical
Technology has been at the forefront of the wireless communication industry for years. As the internet
changed from static webpages to large dynamic web environments, consumers desire to access them
increased, and the use of mobile broadband increased exponentially.
On June 29, 2007, AT&T and Apple took the first step to really address the changing wireless
environment by released a revolutionary iPhone that has continued to change how people use their cell
phone. Not only did this phone allow consumers to surf the internet easier that every before, Apple
introduced the concept of an application driven device to consumers for the first time. Since the release
of the original iPhone, applications have been a dominate force in the cellular marketplace. Different
operating systems have emerged such as Android, Blackberry OS 7, and Windows Phone 7 that all use
the same concept. AT&T has invested over 70 million into AT&T Foundry Innovation centers that have
been opening up worldwide to help create new development tracks which include teleHealth, HTML5,
new ways to deliver rich media, advanced check-in and location-based application, and application
programming interfaces (APIs) that make network services easily available to application developers.
Within these centers, developers to access to prime network capabilities, test beds, technology experts,
and project coaches which help them being their ideas to market faster than ever before.
Secondly, AT&T is rolling out a dynamic multi-layered 4G network that will allow consumers to surf the
web faster than ever before. This multi-layered network uses HSPA+ and LTE to deliver speed
performance on a larger scale allowing consumers to receive a most consistent mobile broadband
experience that supports simultaneous voice and data connections and higher speeds than the other
can provide outside their LTE footprint. 1
1
(More than one Acronym for Speed, http://shar.es/bBmO1)

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To accommodate consumer demand, AT&T partnered with different cell phone manufactures and
increased the quality of their network leveraging their technological benefits to their customers.
Financial
With execution across key business areas, AT&T has driven industry-leading growth in the past 5 years.
According to their 2010 Annual Report2
Wireless connections increased by 8.9 million which is the largest gain in history
Wireless data revenues increased by 28.7%, the strongest growth among major carriers
Consolidated revenues improved from 2009
Earnings per share grew by over 63%
Company raised its quarterly dividend for the 27th
consecutive year
In addition to the above highlights,AT&T committed nearly $70 billion to get more spectrum and
continue to build out its mutli-layered 4G network. Currently, AT&T and T-Mobile are in talks with
multiple government agencies as they work out the details of the proposed 39 billion dollar that would
combine companies and position AT&T as the largest carrier in the U.S.
Areas of concern for AT&Ts financial performance surround government regulations, labor contacts, and
competition. If AT&T network require that towers are build and wireless spectrum is allocated so they
may distribute it among their customers. Currently, the whole industry is experiencing spectrum church
which is a termed coined by AT&T to describe the large increase in demand for spectrum, but the
government lack of allocation. Secondly, AT&T is one of the largest union based employers in the
country. These contracts must be renegotiated every couple years and could risk strike in key business
areas, or increase salaries and wages in future. Lastly, competition is fierce in the wireless
telecommunication industry. If AT&T does not continue to innovate in terms of network technologies,
device offerings, and rate plans, they will see net losses in wireless subscribers for the first time in
decades.
Industry
The wireless telecommunication industry has seen amazing growth and will continue as many
consumers are disconnecting their landline services to be connected wirelessly.The major players in the
industry saw revenues of 204.5 billion dollars with profits of 13.9 billion in 2010 with annual growth over
2
(2010 AT&T Financial Performance Snapshot, http://www.att.com/gen/investor-relations?pid=19250)

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the last five years of 3.9%. 3
The chart below shows an overall view of the industry structure rated on
many different topics.
Figure 1.1 Wireless Telecommunication Industry Structure segmented by topics
Topic Stage
Life Cycle Stage Growth
Revenue Volatility Low
Capital Intensity High
Industry Assistance None
Concentration Level High
Regulation Level Medium
Technology Change High
Barriers to Entry High
Industry Globalization Low
Competition Level High
Source: Wireless Telecommunication Carriers in the US, ISISworld,
http://clients.ibisworld.com/industryUS/default.aspx?indid=1267
Currently the industry’s life cycle stage is within the growth stage which is determined by strong
consumer demand for wireless telecommunication services, main components of the industry receiving
technological innovation, new products and services beingproduced at a rapid rate, and industry
revenue is growing faster than the economy.
The Product
The purpose of its products has changed as technology has advanced over the years. It has developed
from a tool used to transmit voice and simple text based messages to a network can connects people,
places, and things using emerging devices and interactive applications. There are 3 segments of devices
that family can choose which include basic phones, messaging (feature) phones and smartphones. A
recent survey done by The Nielsen Company in September 2011 shows 52% of new cellphone buyers
choose a smartphone over a feature phone4
which deeply integrates the device into a consumer’s
lifestyle and reaps higher average revenue per subscriber for the wireless carriers. With this level of
innovation, adoption and increase revenues, their product is position to sustain their business within the
next five years.
3
(Wireless Telecommunication Carriers in the US, ISISworld, http://clients.ibisworld.com/industryUS/default.aspx?indid=1267)
4
(In U.S. Market, New Smartphone Buyers Increasingly Embracing Android, http://blog.nielsen.com/nielsenwire/
online_mobile/in-u-s-market-new-smartphone-buyers-increasingly-embracing-android/)

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Competition
There are 4 national players in the industry which include Verizon Wireless, AT&T INC, Sprint Nextel
Corporation, and Deutsche Telekom AG, better known as T-Mobile. Their market share can be found in
figure 2.
Figure 2. Wireless Telecommunication Market Share in 2010
Company Verizon Wireless AT&T INC Sprint Nextel T-Mobile Other
Market Share 32.3% 29.8% 16.3% 12.8% 8.8%
Source: Wireless Telecommunication Carriers in the US, ISISworld, http://clients.ibisworld.com/industryUS/default.aspx?indid=1267
Verizon Wireless is the only company fairy well among the competition. Sprint Nextel is still recovering
from a near bankruptcy during the initial downturn in our economy, and the owner of T-Mobile,
Deutsche Telekom AG, has been actively seeking approval to merge with AT&T for the last eight months
as it looks to exit the U.S. market. There are other regional carriers which account for 8.8% of the
market share in the U.S. but none of them hold a significant amount of market share as one company.
In terms of Family Plans, all major players are bundling voice, messaging, and data packages together to
save additional money as a family grows. Sprint Nextel and T-Mobile differentiates themselves based on
being a low –price providers while still offering unlimited data plans. On the other hand, Verizon
differentiate itself on the tiered data plans with thereliability of its 3G network and the speed of its new
4G LTE network.
AT&T looks to differentiate itself across all three packages by allowing your unused minutes to rollover
to the next month called Rollover Minutes, allowing plans with unlimited messaging to have unlimited
calling to any mobile carrier called Mobile to Any Mobile, and using lower cost tiered data plans called
Data Plus, Data Pro 2GB, and Data Pro 4GB. These methods allow the customer to select a plan tailored
to their current needs.
Conclusion
Through embracing technological change, and being at the forefront of emerging devices, they have
given themselves a head start among their competitors. In this fast paced industry, they are making the
right choice by continuing to invest billions of dollars in innovation and mobile broadband. These things
will allow them to continue to connect their to their loves ones for many years to come.

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Bibliography
In U.S. Market, New Smartphone Buyers Increasingly Embracing Andriod. (2011, September). Retrieved
November 07, 2011, from Nielsen Wire: http://blog.nielsen.com/nielsenwire/online_mobile/in-
u-s-market-new-smartphone-buyers-increasingly-embracing-android/
Wireless Telecommunication Carriers in the US. (2011, September). Retrieved November 7, 2011, from
ISISWorld: http://clients.ibisworld.com/industryUS/default.aspx?indid=1267
AT&T, INC. (2011). 2010 AT&T Financial Performance Snapshot. Retrieved November 08, 2011, from
AT&T 2010 Annual Report: http://www.att.com/gen/investor-relations?pid=19250
Nonovan, J. (2010, December 01). More Than One Acronym for Speed. Retrieved November 8, 2011,
from AT&T Innovation Space: http://shar.es/bBmO1