AT&T US Prepaid Mobile.
The world over, AT&T is the iconic telecommunications company. The story of AT&T and Cingular is a story of big US business – and high stakes poker. In 2004, Cingular purchased AT&T Wireless for a whopping $41 Billion. Cingular successfully won the bid against Britain's Vodafone. It's been estimated that the purchase price was nearly double the amount of the trading value of AT&T Wireless at the time of the acquisition. Analysts back then were divided regarding the purchase price and many insisted that Cingular overpaid.
The deal was so big and affected so many people that the Federal Communication Commission FCC had to approve the deal and give it its blessing. The deal catapulted Cingular to the top position within the US Wireless sector with an estimated customer base of 46 million customers. Cingular is jointly owned by Bell South Corp and SBC Communications Inc – two major telecommunication companies both publicly traded.
After much back and forth and a few hiccups and mixed messages around the new branding it was decided to brand the new company AT&T, thereby leveraging the iconic brand into the future.
In late 2005, SBC acquired the original AT&T, and rebranded the entire operation as "the new AT&T". Cingular became wholly-owned by the new AT&T in December 2006 as a result of the new AT&T's acquisition of BellSouth. Then finally Cingular was renamed AT&T Mobility in early 2007.Going forward when mention is made of AT&T – it is important to realize that this means Cingular and AT&T who are now merged.
The biggest buzz news around AT&T in 2007, was the exclusive launch of the iPhone on the AT&T network.The deal brought huge exposure to AT&T and further thrust the company into the limelight. It also positioned AT&T as a market leader for innovation and cutting edge technology.
As we look at the their prepaid business its interesting to note that recently AT&T chief Randall Stevenson commented at a CitiBank Telecom conference in 2007, that customers are not paying their mobile phone bills as well as they should be, and are subsequently getting cut off. He mentioned that the big growth sectors to watch out for would be wireless and especially wireless prepaid .
AT&T has a very good prepaid cell phone offering. It is called GoPhone. At the end of March 2007 Cingular (now AT&T) made the correct decision (although the harder decision from a roll out perspective) to no longer support the second generation network protocol time division multiple access (TDMA) for its GoPhone (prepaid) customers. All prepaid customers are now using the newer GSM technology, which is a benefit in our opinion.
AT&T has two primary prepaid offerings:
Pay as you go - unlimited talk
* 10 cents per minute.
* daily access fee $1.00 per day, ONLY on days you use your phone.
* Rollover balance included.
* No text message included – each text costs extra.
Pay as you go - $.25cents per minute
* 10 cents per minute.
* daily access fee waived.
* No text message included – each text costs extra .
Included in both plans are basic voicemail, call forwarding, call waiting, international calling, caller ID, three way calling, and nationwide long distance.
Their pricing is competitive and their consumer offerings are good but our analysts have pointed out that they are not as wide ranging as other networks.
AT&T also has a daily access fee – meaning that if you use your prepaid phone to make a call a $1 fee will be debited form your account for that day. This does not apply to the $.25 cent per minute plan option – it is waived.
