AT&T Tumbles Into a Ditch

The chickens came home to roost on Thursday when AT&T took a US$4 billion charge for the failure of its attempt to acquire T-Mobile.

While AT&T’s $32.5 billion in revenue beat estimates, and while the company reported 7.6 million iPhone activations — thanks to the iPhone 4S — it nevertheless suffered a fourth-quarter net loss of $6.68 billion, or $1.12 per share, compared with a profit of 18 cents per share a year earlier.

Share prices fell a dollar, from $30.5 to $29.5 on the news.

AT&T gained 717,000 subscribers on monthly contracts, far more than the half million projected by analysts. Its losses were due in part to better-than-expected success with the iPhone. Sign-ups prompt subsidy costs that are incurred before two-year subscription dollars are collected.

Going forward, AT&T will need to focus on the rollout of its 4G LTE network to keep pace with Verizon. Its 4G network currently covers less than half the number of customers as Verizon’s network.

An AT&T spokesperson was not immediately available to comment for this story.

Where’s the Bandwidth?

AT&T was seeking to expand its network through the accquisition of T-Mobile. Since the merger failed, it will have to find alternative solutions.

“At this point, the most likely course for AT&T seems to be to expand its own high-speed network assets and infrastructure,” Charles King, principal analyst at Pund-IT, told the E-Commerce Times.

However, a solution isn’t likely to come quickly, he said. “That sort of effort typically takes long term focus and investment that could impact the company’s financial performance and its ability to effectively compete against Verizon and others.”

AT&T has a number of options for adding spectrum, but some may be expensive.

“First, they could acquire spectrum in other ways, either trading spectrum with other operators or acquiring it outright,” Allen Nogee, principal analyst for wireless technology at In-Stat, told the E-Commerce Times.

AT&T may try to offload some of its data burden to WiFi. In the last few years, the WiFi in smartphones has much improved, usually not heavily impacting battery life, observed Nogee. “The more data that can be offloaded, the more the cellular network doesn’t need to handle.”

AT&T could improve ground stations by either deploying small cell base stations or by deploying distributed antenna systems, he suggested. “These solutions make better use of the spectrum that AT&T already has.”

The deployment of LTE will help, said Nogee.

“LTE is more spectrum-efficient than HSPA, so more bits can travel down the same size pipe — but the problem here is the iPhone doesn’t yet support LTE,” he explained. “But the next iPhone very well may.”

Competing Without Verizon

With T-Mobile off the table, AT&T will have to rethink its competitive strategy. That means taking a different tack regarding Verizon.

“AT&T is not doing so great compared with Verizon,” said King. “Despite enjoying a notable boost from holiday sales and the popularity of the iPhone 4S, AT&T only signed about two thirds as many new clients as Verizon did in the past quarter.”

That performance highlights just how important the T-Mobile deal could have been to AT&T in terms of both expanded bandwidth and new customers, King noted.

While AT&T may have sold more iPhones, Verizon has been cleaning up with Androids.

“Verizon’s iPhone activations were quite a bit less than AT&T’s, at 4.3 million versus 7.6 million,” said Nogee. “For Verizon, iPhones only represented 54 percent of the smartphone sales, but that is because Verizon does a better job selling its Android Droid line of phones, and maybe not so well with the iPhone.”

AT&T Going Forward

As for the future, “the challenges are supplying the data demand of all their customers while doing it profitably,” said Nogee.

SMS messaging is decreasing, while wireless data revenue should more than make up for that loss.

“As more other operators get their wireless 4G networks running, there may be more pressure on wireless data prices,” Nogee observed.

AT&T recently increased its base prices while upping the data caps for their data plans, he pointed out. “In general, that move should bring in more money for data plans, which will help pay for other network improvements.”

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Why the Real Estate Industry Should Embrace the Cloud

The increased adoption of cloud computing over the past decade has enabled businesses across industries to meet their growing technology needs while efficiently gaining access to exciting new tools.

However, not every industry has kept up with the evolution of cloud technologies brought forth by digital transformation. A prime example is the real estate industry. Overall, the real estate sector has been slow to digitize operations and move to the cloud; leaving agents, brokers and their clients underserved.

Cloud computing can cover a lot of ground, with both infrastructure-as-a-service and software-as-a service availability. There is great potential for the real estate industry’s future in both areas.

When properly implemented, cloud computing accelerates the innovation and digitization of real estate services, bringing new apps and tools to the market more quickly. This also adds even more value to the buying and selling experience for agents, brokers and consumers alike.

While the cloud offers much potential for the real estate industry, it is important for companies to have an informed idea of what they want to accomplish before moving some or all their IT functions to the cloud. Don’t just jump on the cloud bandwagon; instead, determine what goals you want to achieve by moving to the cloud and develop a plan for an orderly transition.

If a company’s cloud infrastructure ends up looking exactly like its previous on-premises setup, it’s probably not taking advantage of all the benefits the cloud can offer. Real estate companies moving to the cloud need to think strategically about adding value through the transition.

With that caveat, there are tremendous benefits for real estate companies that move to the cloud.

More Data, More Power

A seemingly immense obstacle real estate companies face is the daunting task of implementing cloud-supportive infrastructure. But the truth is that real estate companies don’t have to plan, build, or operate their own data centers.

Instead, the cloud infrastructure providers can set up and maintain the infrastructure while real estate companies focus on what they do best: selling properties, serving customers, and equipping agents and brokers with the best tools to help them do their jobs.

Cloud infrastructure also offers real estate companies the computing power to run modern tools like data analytics and artificial intelligence. These technologies can help real estate companies find new customers, identify people likely to be interested in buying or selling their homes, and match customers to the best real estate agents to service their needs.

Real estate organizations often have access to huge amounts of market and customer data. However, the sheer volume of data makes it difficult to capitalize on. With cloud computing, real estate companies can gain access to the massive computing power needed to crunch the data, while paying only for the time they use that infrastructure.

Mobility and Disaster Recovery Solutions

Another benefit of storing data in the cloud is that it’s accessible from various devices, which is a boon for the growing mobile workforce. Agents, brokers, and home buyers and sellers are increasingly using smartphones and tablets to get work done remotely. The cloud is much more flexible, accessible, and secure than being tethered to a physical hard drive or on-premises server.

Furthermore, companies that transition to the cloud don’t have to build and maintain a remote disaster recovery site, which can be labor-intensive and time-consuming. Instead, critical data in the cloud automatically fails over to a secondary site in the event of a disaster. All that is required to access data in the cloud — anytime, from multiple devices, anywhere — is a solid internet connection.

Budget-Conscious Security

Major cloud infrastructure providers have a security track record that most real estate companies can’t compete with. They have huge teams of security professionals and the best available security technologies, policies, procedures, and controls to protect the information on their servers and data centers 24/7 with little or no human intervention.

Cloud security measures also support regulatory compliance and establish authentication rules for users and devices. This high level of data security is particularly important in the real estate industry, with customers sharing banking and other personal data during what’s often the largest financial transaction of their lives.

Customers want their real estate transactions to be as secure as possible, and cloud infrastructure providers offer that higher level of protection.

Creating an Open Ecosystem

On the software-as-a-service side, the cloud is the perfect way to host multiple apps and software tools that improve agents and broker productivity. One way to approach this is through the development of a real estate app store that includes a range of software, including CRM tools, lead generation software, open house apps and productivity tools, with everything hosted in the cloud.

In doing so, this creates an open ecosystem, where agents and brokers have a choice of software tools to use, including some apps developed in-house and others from third-party partners. The cloud enables an open ecosystem in which agents and brokers simply decide which apps they want to use from a menu of options available. This provides flexibility while also empowering personal choice and customized solutions for home buying and selling and beyond.

Convenience Is the New Normal

The Covid-19 pandemic has forced real estate companies to conduct more business remotely, with documents shared online. Some firms have been moving a greater number of transaction steps to the virtual realm, using cloud-based services to host and gather documents and collect signatures.

While some customers will continue to demand face-to-face contact with agents and brokers, a significant number will embrace the convenience of a mostly online, cloud-based approach.

The industry is already seeing great benefits from cloud computing. Expect many more advantages to reveal themselves as the industry continues to digitize its operations.

Too often, we see that the failure to innovate today equates to playing catch-up tomorrow. The benefits of cloud technologies for real estate services professionals are clear, and the obstacles of price and infrastructure are entirely surmountable.

Business and information technology leaders in this industry must look beyond outdated legacy systems and begin embracing the cloud — now.

Rizwan Akhtar is executive vice president, chief technology officer of business technology, at Realogy. Akhtar holds an M.S. in Computer Science from the University of South Asia and an MBA from the University of Phoenix.

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