Leading telecom carrier,
) announced a reduction in pricing for family plans on Feb 1,
including data on its G LTE network. Customers with a family of
four can now switch to AT&T's family plan that offers
unlimited talk and text, and 10GB of data for $160 a month. The
reduced rates are likely to draw more customers to AT&T.
The competitive pricing will also give AT&T an edge over
Verizon Communications Inc.
T-Mobile US, Inc.
The street reacted negatively to the price cut and AT&T's
share fell 4.11% at closing on Monday.
Reportedly, Verizon offers a similar package for around $260
per month. As a result, AT&T is targeting those customers
willing to switch to AT&T from other operators like Verizon
and save around $100.
AT&T is looking at opportunities to improve its growth
profile and competitive position through a number of strategic
initiatives. Last year, the company began offering AT&T Next
that allows subscribers (both new and existing customers) to
change their old smartphones or tablets every year without any
upgrade fee or down payment. The company's Mobile Share plan is
also gaining popularity with growing post paid subscribers.
Moreover, the company is also strengthening its network
quality by its project Velocity (IP) initiative, which targets
business expansion. This includes expanding 4G LTE, enhancing
spectrum and network capabilities, expanding U-verse services to
8.5 million new customer locations and expansion of broadband
services to 57 million users, covering 75% of the company's
wireline footprint by the end of 2015.
The company is also seeking to expand its fiber network to 1
million additional customer locations by 2015. This project
underlines the company's efforts to meet the growing demand for
high-speed Internet. We believe that this investment program will
provide AT&T with a high-potential growth platform for
revenues and earnings.
AT&T currently has a Zacks Rank #3 (Hold).
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