Q1 Wireless Gains Can’t Help AT&T Chase Down Verizon

AT&T slightly missed analyst expectations on its first quarter earnings report this week, despite solid growth on the wireless data side of the business and record smartphone sales.

The company reported net income of US$3.7 billion, a slight increase from the $3.6 billion it reported a year earlier. At $31.34 billion, revenues were down 1.4 percent from the previous year.

AT&T’s quarter was especially helped by the consumers that continue to turn to their smartphones and tablets for their connectivity needs. The company’s wireless data revenues were up 21 percent from the same time a year earlier, with overall total wireless revenues also up 3.4 percent compared to a year ago.

Many of those wireless customers were new ones. AT&T added 296,000 wireless postpaid customers and 1.2 million new smartphone subscribers. Smartphones accounted for 88 percent of AT&T’s postpaid phone sales. The company said it sold 6 million smartphones during the quarter.

To get a more detailed picture regarding AT&T’s new customers, it’s important to consider another big data-eater — tablet computers, said Jonathan Chaplin, director of equity research at Credit Suisse.

“Net adds of 296,000 were above our estimate. However, stripping out the 365,000 in tablet adds reveals that phone net adds were negative,” he told the E-Commerce Times. “AT&T attributed the anemic postpaid phone net adds to lower promotional activity. We expect net adds to remain flat sequentially as these trends continue.”

AT&T did not respond to our request for further details.

Taking on the Competition

AT&T stock took a hit in after-hours trading Tuesday and continued to trade down to about $36.80 per share going into Wednesday afternoon.

“We remain cautious on AT&T, given unsurprising operating trends and a high valuation,” Chaplin said.

Adding to the caution with AT&T is the company’s ongoing battle with Verizon for the top spot in the wireless market. AT&T is showing it can outcompete T-Mobile and Sprint, but it hasn’t been able to win against the nation’s largest provider.

With the market becoming more saturated, well-established companies like AT&T must switch focus with their strategy, said Jeff Kagan, tech analyst and consultant. AT&T is doing a decent job of converting its longtime consumers to more lucrative smartphones and tablets, while its competitors might still be simply trying to draw as many customers as possible.

“AT&T was the first company that started the trek into the smartphone world,” he told the E-Commerce Times. “Years later Verizon joined in. So if AT&T is years ahead of Verizon, it makes sense that their customer base would mature more quickly. The wireless industry is a rapidly growing place that changes regularly. That means over the next few years Verizon will look similar to AT&T today.”

Evolving Market

That market change means AT&T can focus on leveraging market changes such as LTE and other wireless opportunities that are just beginning to emerge in industries such as retail, healthcare and automotive, said Kagan.

“Wireless is not just about wireless any longer,” he noted. “We see AT&T expanding into other areas. Growth in wireless will come from helping other industries transform and use wireless to grow, such as automotive, where the Internet is in the dashboard.”

It’s important to keep long-term growth possibilities in mind when considering AT&T’s place in an evolving market.

“I don’t see any real problem here,” Kagan said. “This is the way the industry has always grown and changed. Industry after industry needs wireless, and that will be one significant and new growth engine for the industry going forward. This is something that AT&T has clearly in their focus.”

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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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