Marketing Section

Marketing Section

As a service industry, telecommunications companies often compete in the marketplace over who has the newest, fastest, or most reliable service to offer. Because infrastructure is so expensive and reputation is so important, new companies have a hard time breaking into the telecommunications industry, creating a minimally competitive landscape for companies.

Consumers in the telecommunications industry are consistently looking for the company that is offering the best combination of new technology that is also fast, reliable, and affordable. As Alicia Hinds, Online Marketing Manager for Comcast Corp. said, “People are just starting to embrace technology. People are always looking for ways to simplify their time and people want information. Now they’re starting to realize that technology is the way to get both.” (Hinds, 2010). Therefore, mobile and wireless services have been booming in telecom. Consumers have also embraced high-speed cable Internet over slower DSL and dial-up. Cell phone service seems to be quickly moving from 3G to 4G, with major companies like T-Mobile USA and Sprint Nextel Corp. already embracing the new technology (Cheng, 2010). Television is also moving from the traditional subscription service to offering shows on-demand or online, fitting with consumer want for greater ease in accessing media.

The telecommunications industry in the United States is not nearly as competitive as most other industries because of how difficult and expensive it is to enter the industry. The technology and infrastructure needed to operate as a telecom company makes it extraordinarily difficult as a starting company. Also, most telecom companies rely on their reputation to set them apart from other companies and a fledgling company obviously lacks this. However, consumers definitely influence prices and service choices as there are, generally, enough companies offering similar services so consumers can comparison shop. This can be seen in the market of cell phone service providers. AT&T, for example, offers a plan of 450 minutes for $39.99 (8.89 cents per minute) (“Individual cell phone,” 2010) and T-Mobile offers a 500-minute plan for the same price (8.00 cents per minute) (“T-mobile cell phone,” 2010). The difference in price per minute is minimal, and AT&T gets away with charging slightly more it has a reputation for more reliable service and offers greater choices in phones.

Telecommunications companies differentiate themselves based on what services they offer, what price they are offered at, and what products are offered with certain services. For example, AT&T is the only company that provides service for the iPhone, which has proved to be very profitable for the company. It is estimated that three-quarters of its net new monthly bill-paying customers are iPhone users (Carew, 2009). This is a huge number as AT&T had 92.8 million subscribers reported in September 2010, closely trailing Verizon Wireless for having the most wireless subscribers (“Mobile world live,” 2010). Sprint and T-Mobile have been feuding as T-Mobile began advertising that it owns “America’s largest 4G network.” Sprint advertises itself as “the first wireless 4G network” and has been doing so for the past two years. Sprint claims that T-Mobile’s advertised 4G is actually well disguised 3G service, knowing that this was an important feature to differentiate their service from other wireless providers (Cheng, 2010).
In the TV sector, cable companies, such as Comcast, differentiate from satellite companies, such as Direct TV, by offering on-demand service for their shows (Hinds, 2010). This advantage allowed many cable companies to stay afloat during the recession when many consumers “promotion hopped” to cheaper satellite companies but soon returned to cable companies for service that was more reliable and offered more features (Hinds, 2010).

Carew, S. (2009). At&t profit boosted by iPhone, video, Internet. Reuters, Retrieved from http://www.reuters.com/article/idUSTRE53L29L20090422
Cheng, R. (2010). T-mobile, sprint sow confusion over '4g'. Wall Street Journal, Retrieved from http://online.wsj.com/article/SB10001424052748703506904575592700833942346.html

GSM world. (2010). Retrieved from http://www.gsmworld.com/

Hinds, A. (Interviewee). (2010, November 12). Interview with Comcast online marketing manager.

Individual cell phone plans - AT&T wireless. (2010). Retrieved from http://www.wireless.att.com/cell-phone-service/cell-phone-plans/individual-cell-phone-plans.jsp?_requestid=244610

Mobile world live. (2010). Retrieved from http://www.mobileworldlive.com/default.asp
T-Mobile cell phone plans. (2010). Retrieved from http://www.t-mobile.com/shop/plans/Cell-Phone-Plans.aspx?catgroup=Individual&WT.z_shop_plansLP=individual