Businessmodel of AT&T

Customer Segments

AT&T provides telecommunications services to the mass market as well as to large businesses. AT&T is the largest provider in the US of fixed-line telephone services and pay TV services, and is the second largest provider in the US of mobile network services.

Its products are frequently bought as part of a package, with customers receiving fixed-line, mobile, wireless and TV services, or a combination of the four.

Value Propositions

As a market leader, AT&T is attractive to new customers, offering reliable and established services. It enables customers to acquire a package of products at a discounted price.

The Company offers an extensive network of support, which can be accessed online, over the phone or in store at one of its numerous outlets. For businesses,

AT&T offers niche services that enable companies to connect with greater efficiency and security.

Channels

AT&T’s products and services can be acquired through the Company’s network of more than 2,200 stores and third party retailers across the US.

The Company also has a large sales team that can be contacted via phone or online, through whom a number of services can be bought, updated or adjusted.

AT&T accounts can also be managed and altered by logging in to the Company’s website at www.att.com, as well as through the MyAT&T app, which is available on iOS and Android.

Customer Relationships

AT&T’s services can be accesses either via direct contact with a sales representative – over the phone or in store – or can be bought through the Company’s website at www.att.com. Existing subscriptions and services can be managed on a self-service basis through the Company’s website and MyAT&T app. Business customers in general require a greater degree of personal service to ensure their specific needs are met, with all business products coming through a sales and marketing team.

AT&T interacts with its customers via social network profiles with Facebook and Twitter. It also maintains an extensive help and support section at its website and hosts a community forum where further issues can be discussed.

Key Activities

AT&T is one of the largest providers of mobile network, wireless broadband, fixed-line telephone and pay TV services to consumers in the US. It also provides connectivity and mobile security services to businesses.

Key Partners

AT&T partners with numerous businesses, including established market leaders and small businesses. The Company selects partners that are able to provide or enhance AT&T products and services, primarily comprising mobile service, cloud and hosting service and network service providers.

AT&T operates a network of partners through the AT&T Partner Exchange. These partners are authorised to provide AT&T services to their clients and in return receive discounts, marketing funds and support. Memberships of the exchange come in two tiers: Platinum and Platinum Elite.

All members of the exchange must support end user billing and billing enquiries and are required to complete a strict enrolment process. Partners include IT solutions company Merrill Hill Lynch, mobile data service provider DatXoom and IT infrastructure firm Alliant Technologies.

AT&T has a range of supplier partners, including large corporations and small businesses, included under the Company’s Small Business Program. The Company also maintains a number of technology partners, primarily comprising manufacturers of computing devices, storage devices, and network devices.

AT&T also provides Digital Life security and automation services, which includes third party integration. The Company announced in 2015 that it was to partner with LG, Samsung and Qualcomm as part of the service. AT&T also has an API available for further third party integration.

Key Resources

AT&T’s key resources are its personnel, its network services and its suppliers. The Company’s physical infrastructure, including its cell towers and cables, are key to the services it provides.

Its personnel, notably its sales and marketing team and installation workers, also play an important role in conducing the Company’s activities.

Cost Structure

AT&T incurs substantial costs through the sale of its services and products, as well as through the installation of various in-home services and external networks.

AT&T also accrues costs through its after sale support services and through the acquisition of mobile phones and accessories from its suppliers.

As one of the largest companies in the world, AT&T employs a significant workforce, incurring high costs through the payment of employee salaries and benefits. The Company retains a large sales and marketing team and operates a broad network of retail outlets across the US, all of which incur their own fixed costs.

Revenue Streams

AT&T generates revenue through its subscription mobile, fixed-line and wireless broadband services, and through the provision of business services.

AT&T’s Business Solutions segment is the Company’s largest, accounting in 2015 for more than $71 billion in annual revenue. The Business Solutions segment provides wireless network, high-speed broadband and mobile security services to businesses. The Entertainment Group, which provides television services and advertising solutions, is the Company’s second largest segment. In 2015, AT&T acquired DirecTV, through which it now also provides satellite television subscriptions, making it the largest pay TV provider in the US. The Consumer Mobility segment is AT&T’s next largest generator of revenue, comprising mobile and wireless subscription services.

AT&T also generates revenue outside of the US through its wireless subscription services in Mexico and its DirecTV service which is active across much of Latin America.