When we discussed forecasting in class, we learned that many businesses have their own approach to achieve their goals and they do so by setting a forecast. However, forecasting is just a prediction. It may or may not reach its outcome.
As the second largest cellular provider in the U.S., AT&T happens to miscalculate their forecasts, which sets them below their profit estimates. It is unfortunate that while AT&T decided to cut prices and provided promotions to their customers, it hurt them quite tremendously financially. AT&Ts projection for revenue growth was 5%, however in 2014 they did not meet these projections. The result of not meeting the projections were because of a decrease installment plan sign-ups, which resulted in AT&T’s 2014 growth forecast to a range of 3-5 percent.
However, to offset this mistake, AT&T is coming up with new ways to earn more revenue such as providing home security and mobile Internet service for cars. These are just a few examples of the many the company has come up with so far.
Questions to think about:
Will AT&T eventually win back and meet their foretasted revenues if they go by what their existing plans are?