AT&T Pricing and Competitive Advantage
AT&T’s pricing model has put the company ahead of its competitors for the longest time. The firm offers unlimited data plans that are almost free as compared to other telecommunication organizations. The company continues to offer better product deals for its clients, and this has made more people who had plans to purchase electronic devices to opt for trading with AT&T. the organization’s strategy to cut on the process as a competitive factor yielded positive results by reducing the data charges for the clients who depended too much on data. This initiative led to many people switch from other data providers to AT&T. The company’s new-market entry plans that involved the cut on data prices are known as an unlimited starter. This is whereby the organization provides its clients with fewer data costs that are unlimited. Low prices attract more clients hence offering an organization with an upper arm in the competition ( Grimm et al., 2006)
AT&T clients, including the ones still on the business plan, no longer face the fears of overcharges when it comes to data. This is after the organization reduced its data speeds with a reduction in the data charges as well. This move saw a cost-reduction in all data-related services such as the clients enjoying unlimited texts and talks, data that can be shared, and enabled their clients to access mobile hotspot services. The new prices announced by the wireless market went hand in hand with the mobile share advantage. This plan enables the clients to get an extra 1 GB monthly data for the same price they might pay when purchasing data. More customers opted to purchase more data, and this was a plan that generated more revenue for the company, putting it ahead of others in the competition. The fact that AT&T adjusted the general line access fees made it possible for its clients to pay much lower costs monthly per line.
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The competitive advantage earned by AT&T due to the low pricing strategy has enabled its clients to access wireless experiences without incurring overcharged prices. This enabled the organization to attract big businesses that depended on data among other consumers. Instead of incurring the previous average charges in data streaming, the company reduces its data usage to an incredibly cheap package affordable to all people from different economic backgrounds. AT&T also offers its clients value-added plans that include unlimited domestic talk data and sharable data, among other low price services.
Concerning the fact that cell phones have become a requirement by most individuals in the current era, AT&T provided lower prices for mobile phones as a way of meeting their clients’ needs (Besen et al., 2013) . Most customers get some of the best deals on phones, even those that work on a low budget. The organization provides its clients with the cheapest cell phone plans through an initiative known as AT&T prepaid. The low-price prepaid services offer the buyers a three-month offer of the prepaid wireless services at a low cost. This initiative has put the organization ahead of similar competition companies as more clients are attracted to the low-price offers, both on data and on the cellphones. Another price strategy that the company has adapted to is providing offers for clients who purchase phones through the organization’s online platforms.
The clients who pay an online upfront fee also receive cheaper data plans. This is convenient to customers because if a client pays an online upfront fee for the prepaid cell phones, they make more savings. Such price initiatives that provide an added advantage to clients have attracted a large pool of customers as other companies hardly provide such initiatives. This has gained the company a competitive advantage in the market because even with the low prices, the products and services continue to be rated among the best products globally.
References
Besen, S. M., Kletter, S. D., Moresi, S. X., Salop, S. C., & Woodbury, J. R. (2013). An economic analysis of the AT&T-T-mobile USA wireless merger. Journal of Competition Law and Economics , 9 (1), 23-47.
Grimm, C. M., Lee, H., Smith, K. G., & Smith, K. G. (Eds.). (2006). Strategy as action: Competitive dynamics and competitive advantage . Oxford University Press.
