AT&T’s MISSED FORECASTS

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?

 

Sources:

 

http://www.bloomberg.com/news/2014-10-22/at-t-misses-estimates-cuts-forecast-amid-price-battle.html?cmpid=yhoo

 

 

11 thoughts on “AT&T’s MISSED FORECASTS

  1. I remember reading that Mckinsey was consulting for Att in 1980 telling them that by 2000 there would only be about 900,000 cellphone subscribers nationwide and that cell phone would not catch on. This forecast led Att to not invest in their cellular infrastructure and when cellphones took off in the 90’s Att was leaps and bounds behind the competition. Forecasting in this case hurt the company and those who forecasted correctly were rewarded with profits. Forecasting is one of the most important things for a businesses long term outlook.

  2. This is interesting. I do believe that they will win back their revenue stream, maybe even outperforming their growth estimates if they actually are able to install mobile internet service for cars. I do not know about the home security, though.

  3. I believe that they will win back their clients and meet their forecasted revenue with their existing plans. Home security is a great field for them to get into because they are already so well known and people tend to stick to a brand they are familiar with and that they relay on and mobile internet service is something that many consumers are looking for nowadays. Having that added to cars is a benefit for everyone at the right price.

  4. This was interesting to hear about AT&T. Lots of companies report right about now – and lots miss (including Apple, which I’m sure hurts AT&T). They also implanted Next for their phone plans to help increase sales. Fun fact: it’s actually cheaper to do these types of plans (Next and I forget what Verizon calls theirs). Interesting read and the comment about cell phone subscribers made me laugh. I’m currently in an airport and everyone is on their phone.

  5. I believe that AT&T will win back some of their clients. I also believe that they will be able to come up with new ways to earn revenue. They are already a well established company with access to a variety of resources. In this growing age of technology a company like AT&T can recover very easily.

  6. This is pretty interesting article you’ve chosen. I’ve been a Verizon customer as long as I remember, so I can’t speak from experience with them personally; however, I am surprised to see such a historically successful company take such a big hit. I think it is a risky move by AT&T to venture into other industries after taking such a big financial hit. One would think they would want to reel it in and reevaluate their current offerings, rather than expand and possibly spread themselves and their resources too thin. But just like anything with high risk, there is a possible high reward in store. I will continue to follow AT&T financial status and see how their new ventures work out. Thanks for a great post!

  7. HI. sunny..After reading you post. I think of what we learn in the class. Since this is just a forecast, so there are must be error. When we know the forecast is not that accurate, we can use another way to calculate, like move average method, least squares method or exponential smooth method. That is why we need to calculate the MAD statistic to determine the the forecast error. When we know about the MAD, we will know which way is best for calculate, then we will minimum the error.

  8. It was an interesting post as it relates to what we learned in class. As many others said, forecast is just an estimate of previous years. It must have been a big loss to AT&T that time. However, after this event, they must have figured it out why they did a wrong forecast. Maybe they forgot to analyze accurately from past forecast or there was a sudden event they didn’t expect to happen. It is AT&T after all and probably they learned their mistakes!

  9. This was news to me about AT&T. I believe that AT&T can definitely meet their forecasted revenues if they go based off their existing plans. I also think that by them implementing a new home security this will definitely catch the eye of some of the old AT&T customers to hopefully come back.

  10. AT&T has a lot of opportunity for growth in the mobile data industry. Tablets are selling more and more every year. They have to promote their tablets and new payment plans for their phones. The forecast must have predicted a positive trend but they were not doing a great job promoting their products and services compared to T-Mobile for example who has many different ads promoting all their different promotions and services.

  11. I think it is interesting that AT&T is still doing okay after all these bad forecasts. Even if they find a temporary fix to their finances, I think they will really need to work on fixing their forecasting techniques. Forecasting is something that will always be important and they will always have to do so they should improve their technique.

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