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A company's business practice in the United States today has found itself in a trend to become globally competitive. The trend to be competitive has forced companies to expand its business overseas. Several choices are to be made by company executives when a company like AT&T ventures into business in a global market. Venturing overseas to countries such as Japan, China, India, Great Britain and Cuba can be a tough task. The global business system comes with many challenges that are inevitable. Cultural differences require an understanding of the market where a company such as AT&T wants to do business. A determination to succeed in the global market is the key to overcoming obstacles when venturing overseas. It takes time to bond and to form a foundation that is strong enough to progress in a global market place.
The partnership that is developed in a country is crucial to receiving support from local governments. The negative partnership developed could hold back the progress that the company seeks to attain in short period of time. Patience in this process is an important part of that process, because if a company is interested in building a long standing successful business in another country it needs to think big and preserve its patience. An overseas venture requires employees, and being well connected to those employees is also an important part of the process to be successful. Building relationships with other countries is not only important, but obtaining qualified people that speak the language and are familiar with the culture where a company wishes to do business makes all the difference in the world. Having the right management figures on staff during the building and establishment of the business is important, because it will give employees that have the right people behind them to be successful in the launch or sustainment of the company business model.
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Purpose of Study
The purpose of this paper is to analyze the international business practices of a publicly traded company and to understand where that company's strength and weaknesses lie in the study of international business practices. The publicly traded company that is described in this paper is the historic American communications company known as AT&T Communications and formerly known as the parent company American Telephone and Telegraph. A company such as AT&T has competition globally; this paper will address the business practices that AT&T has taken to make itself a competitive figure in the global communications market.
Limitations of Study
The limitations of this study were due to analyzing the validity of data and eliminating information deemed as unreliable and irrelevant data. The business reports and media news room reports of AT&T Inc. contain large amounts of information making it a time consuming task to obtain relevant data for the purpose of this paper.
Definitions of Terms
For the purpose of this paper, the term American Telephone and Telegraph Inc. is recognized as the original AT&T Inc. (1885-2005) and the term AT&T Inc. is recognized as the new AT&T Inc. (2005-2010) owned and operated under the parent company name Bell Telephone. The name Western Electric Company is recognized currently as the company of AT&T Inc.
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The sale in 1925 of the affiliate company of American Telephone and Telegraph Inc. known as Western Electric Company, resulted in a sole detainment of the AT&T name and Bell Telephone System (AT&T Media News Room, 2010, p.1). All other terms utilized in this paper are to be viewed within their generally accepted definition and meanings. Terms that are relevant to the telecommunications and the information systems technology industry will be clarified within the text. Review of Literature
In 1927, AT&T Inc. inaugurated commercial transatlantic telephone service to London by use of a two way radio. Initially, these calls cost seventy five US dollars each for three minutes. Service spread to other countries, both via London and through direct radio links. Radio telephone service to Hawaii and Cuba began in 1931, and to China and Japan in1934. The conversation crossed North America by wire and over the ocean by radio telephony. In 1935, two AT&T executives made the first around the world phone call. They two spoke from adjoining rooms in New York City, but their voices circled the globe. The network expanded in scale as well as the scope of AT&T's vision to become the premier global company. AT&T added additional circuits as traffic and demand had grown. In 1940, four separate transmission routes between the east coast side of the globe and west coast side of the globe. Telephone service continued to spread via available radio technology. It was far from what we know it as today, because it was subject to fading and interference with strictly limited capacity. In 1956, service to Europe moved to the first transatlantic submarine telephone cable, with transpacific cable service beginning in 1964 (Krupa, 1992, p.9).
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AT&T recently returned to the global arena, adding plants, subsidiaries, and several more joint ventures in the countries of Netherlands, Japan, and China. AT&T Inc. continued its historic story in the telephone and communications industry as its original name American Telephone and Telegraph until 2005. In 2005 AT&T Inc. was acquired by SBC Communications. The AT&T name was retained for its global reputation, and quickly became known as the largest provider of local and long distance telephone services in the United States and is publicly traded with the T symbol for telephone (NYSE: T) on the New York Stock Exchange (Forbes, 2008). Under the new name success would require no less than the most drastic change in corporate culture ever undertaken by a major American corporation. The old AT&T and the old Bell System as a regulated monopoly had been protected from market pressures for most of its history. The new AT&T Inc. boasts that they are "Putting it all together for their customers" (AT&T Media News Room, 2010, p.1). And that is just what AT&T's management is has been doing since its collaboration with Apple Inc. The company's success is due to strategic acquisitions and exemplary management decisions. The new AT&T has evolved in to what it is today in 2010 from years of is sought at acquisitions of eleven of the original Bell Operating Companies all referred to as MA Bell (Dragna, 2010).
AT&T was involved in an antitrust suit with the United States government which ultimately led to the conglomerate breakup of the original Bell Operating Companies in the year 1984 (AT&T Media News Room, 2010, p.1). In the past 26 years, a lot has happened with this global iconic American company, SBC Communications Inc. has steadily reassembled the massive company starting with the purchase of the original (MA Bell) AT&T Corporation in the year 2005 for $16 billion US dollars and became the newly merged company called AT&T Inc.
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In the last two decade the strategies that the former AT&T used in its corporate structure became problematic and were deemed detrimental to the new AT&T's positive global growth. Therefore, AT&T Inc. worked hard to succeed in the changing global market. The company began to invest over 35 billion dollars in acquisitions and upgrades to its infrastructure, both to manage an increasing internet demand of data traffic to establish direct local connections to its customers globally. In 2003 AT&T Inc. began to outsource twenty percent of its information technology staff to a Bangalore, India firm. The total job losses reached nearly 5000 jobs losses, boosting profits to a high of forty percent (Cook, 2003).
The new AT&T Inc. is headquartered in the former SBC Communications headquarters in Dallas, Texas. The merger came eight years in 2005 after the two companies attempted talks of their first discussion of a possible merger. One year later in the year 2006 AT&T Inc. acquired Bell South Corporation after the Federal Communications Commission approved another acquisition for the amount of $86 Billion US dollars (Dragna, 2010). The acquisition of Bell South Corporation resulted in a 100% ownership of the Cingular Wireless and the Yellow pages companies, which currently operate under the new AT&T Inc. name. AT&T Inc. employs 282,720 employees worldwide (AT&T Media News Room, 2010, p. 2). Due to the companies mounting legacy costs to retirees AT&T Inc. is plans to accept a $1 billion charge against earnings tied to the federal health care overhaul, joining a number of other companies in reporting an impact from the bill signed into law in March 2010 (Wall Street Journal, 2010).
AT&T Inc. has a technology division is formerly known as Bell Laboratories now known as AT&T Laboratories has been pioneers of technology over and over since 1961, with the introduction of the revolutionary T1 digital signal line.
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The pioneering of products has helped AT&T Labs research and development team further revolutionize the industry with (iptv) internet protocol television. While AT&T is a big player in the communications industry, they still have lots of competition to tend with internationally and globally.
AT&T offered industry analysts multiple presentations on May 19, 2010 that provided a detailed view of the mobility services and applications, global networking, cloud computing, managed services and service bundles that the company today offers to its more than 3 million global business customers. In addition, AT&T Labs technologists shared insights into how AT&T Inc. is implementing the next wave of innovation in its business services for the global market. With the introduction of AT&T's Labs proprietary Uverse internet protocol market has been a major source of revenue for the company since its implementation in Texas in the year 2006. After, its research and development run in the Dallas, TX market, AT&T Labs created a successful lifeline to a new emerging global technology into consumer homes (Forbes, 2010). According to AT&T Inc. spokes person Virginia McLean, Hilton Worldwide announced in July, 2010 that it has entered into an agreement with AT&T inc. for a managed suite of Wi-Fi and internet services. AT&T Inc. named one of the largest providers of hosted internet access in the hospitality industry will provide Hilton Worldwide and its ten different hotel brands with a high quality online experience for guests in more than 3,200 hotels in the United States, Canada, India and Puerto Rico (McLean, 2010).
AT&T Inc. is currently offering services in thirteen markets in the Asia pacific region, with sales teams targeting these markets in order to promote growth in their overseas business.
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AT&T is marked as the world's largest communications company, offering the world's most advanced IP based business communications services. The company offers what they consider the best cellular 3g network in the United States and the best wireless coverage throughout the globe. For business clients AT&T inc. offers high capacity and high speed internet based solutions, the leading voice services in all of it overseas markets (Fortune magazine, 2010).
AT&T's global marketing and research and development has enabled its operations to implement a solution called Telepresence.
"With the growing awareness and adoption of Telepresence globally, we have seen increasing interest from customers in India in AT&T's capabilities in Telepresence solutions. The fully managed AT&T Telepresence Solution provides customers with powerful and cost effective collaboration tools to speed business transactions and time to market, improve relationships and collaboration, while reducing the impact of carbon emissions on the environment by reducing the need to travel for meetings. Such benefits are being recognized by more of our customers," stated Gopinath. "The Bangalore telepresence facilities present a great opportunity to showcase how efficient and cost-effective this solution is for our business partners and customers (Gopinath, 2010)".
In addition to India, Telepresence has global footprint availability to seventy five countries and territories. Thirty seven of the countries have experienced a fully manageable remote monitored video conferencing services, with twelve countries just added in July 2010.
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The services allow AT&T customers to have a cost effective reliable solution to a face to face meeting experience while collaborating with their employees, their customers and their suppliers (Brutus, 2010).
AT&T Inc. is named the industry leader by Fortune magazine for serving millions of customers, including the Fortune 1000 companies and offering its services and operating in six continents. Due to these achievements Fortune magazine has ranked AT&T Inc. no: 1 in the telecommunications industry's most admired companies (Fortune Magazine, 2010). AT&T Inc. reported a 26 percent increase in its second quarter earnings despite its rising investment costs. The lowering of costs and fewer customer disappointments it increased the rate of growth in new contract customers despite the new Apple Inc. iPhone 4 problems (Cheng, 2010).
In the country of India, AT&T has a foreign direct investment and substantial foot hold on the corporate enterprise network which includes multinational customers, primarily due to AT&T's overseas strategy and sales teams targeting companies that are headquartered in India. AT&T Inc. holds licensing for long distance services in India also giving them the capability to offer competitive rates and high standards of services to their customers with headquarters in India as well.
While AT&T Inc has been growing in new overseas markets and has continued to hold the crown as the biggest premiere phone company by revenue, the company has reported to have struck a deal to sell off its Japanese market to Nippon Telephone and Telegraph for a staggering $101 million dollars an equivalent of 9.17 Billion Yen.
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AT&T Inc. recently in the middle of the 2010 year has been looking to reduce its footprint in overseas market where there is a high level of competition. The Nippon Telephone and Telegraph Company in Japan is a local well established player in the telecommunications market of Japan. It is reported that AT&T Inc. will use the asset reduction to fund project upgrades in their United States wireless operations (Economic Times, 2010). Discussion
Review of Findings
In my assessment of AT&T Inc. and its global presence in other markets of the world are impressive in my opinion. The company has ventured into the global market place several times since Alexander Graham Bell invented the telephone and created a foundation for the company 134 years in history. Conducting business in other countries is a very difficult task and not always a profitable venture. The aggressive change the corporate culture of AT&T has been nothing less than drastic.
The new AT&T has figured out and determined how to deliver to its international and overseas customers what they want. The long distance telephone and data service market is very competitive and AT&T has a substantial presence in the global market. The financial success of AT&T and its overseas ventures are supported with revenues created from other markets and with sales of current assets. AT&T's financial strengths have helped in the company's growth and improvement initiatives.
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The company has been considered a monopoly for most of its existence, with new management and innovative services the company has excelled and found itself in a competitive market. It is a much different place from what the company is used to. The competitive global presence has prompted AT&T to expand to the Middle East and Africa regions with a new network node in Jeddah, Saudi Arabia. The largest economy in the Middle East will benefit from AT&T's investment of the new infrastructure expansion creating partnerships with local governments in the middle as well as Africa. AT&T has also created a partnership with Saudi Telecommunications Company (STC), furthering its alliances with other players in the Middle East market. AT&T has continued its ongoing efforts to build its footprint in the Middle East regions, with the addition of a new office located in Dubai, Saudi Arabia. This is a commitment that AT&T is making in order to prove and continue that success it is looking for in Africa and the Middle East. The new investments in Africa and the Middle East are continued evidence of the expansion and build out of AT&T's global network, delivering services and applications to the markets and geographic locations where multinational companies are doing business or housing their operations.
As customers upgrade from old and outdated legacy network equipment AT&T has an opportunity to take advantage of delivering services to current and new customers with multi protocol label switching and virtual private networks. In addition to its new markets AT&T has plans to expand its data capacity to its current customers in Europe, Hong Kong, China and Taiwan. Presently the company is installing a subsea fiber optic cable to locations including Alaska, Europe, Australia, Asia Pacific, India, Puerto Rico, and the Caribbean.
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Currently AT&T has ownership interests in 83 subsea fiber optic network cable systems which cover 488,000 route miles. AT&T's international and global network spans over 888,000 route miles of fiber optic network cable. Besides AT&T's obligations to itself and to its stock holders it felt the American company owed support for the United States military and people around the world of minorities as well. The AT&T global infrastructure enables it to deliver its data and voice services to 149 countries. AT&T has been capable of offering United States military personnel the ability to call all over the world for a very affordable rate. The company has established fifty two calling centers in Afghanistan, Kuwait, and Iraq for United States military personnel to call their loved ones. The navy personnel can save over 50% off calling rates from any United States military ship if they run out of their donated minutes. The United States military personnel also can enjoy a 15% home and away discount for their cellular phone plans. AT&T is a supporter of the United States Military and in continuing effort to better the quality of life for the men and women of the military service personnel it has raised and donated millions of dollars and donated 6 million dollars in pre paid calling cards. This would not be possible if the company did not expand its operations to London, China, Saudi Arabia and the Caribbean (usa.att.com/mil, 2010). Several of the diverse companies in AT&T's supply chain have successful worldwide operations that compete globally and are increasing their international footprint to serve their own customers as well as the customers of other clients. AT&T continues to be a member of WE Connect International, a nonprofit organization that facilitates helping sustainable economic growth by increasing opportunities for women owned businesses around the world. According to CEO Randall Stephenson, AT&T has achieved some of the highest supplier diversity spending results in the world.
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AT&T increased its supplier diversity spending by nearly $2 billion from 2007 through 2009. We have spent $50 billion with these businesses since our Supplier Diversity Programs began in 1968 (Stephenson, 2010).
In conclusion, the research conducted in this paper has helped me learn more about my former employer of nearly eight years. The research has helped me understand the companies direction and future plans to change the way we as people of this earth communicate and do extraordinary things in the business world. With AT&T securing the rights to be the exclusive carrier of the Apple iPhone and Apple iPad services, AT&T has proven its ability to secure market share in the competitive telecommunications cellular market. But, at the same time AT&T did not expect the popularity of the Apple iPhone and the Apple iPad to nearly cripple its cellular network. The company is stated that it will add 2 million dollars to the funds already set aside to upgrade their cellular network. In addition to updated the 3g cellular network AT&T has decided to change its data plan costs from unlimited data to limited data for iPhone and iPad users. The $30 a month unlimited data plan will now change to $15 a month for 200 megabytes of data or for $25 a month 2 gigabytes of data, relieving the network from high amounts of usage (Blodgett, 2010). I honestly don't see this as a benefit to iPhone or iPad customers, it appears that AT&T has taken the path of least resistance. With AT&T's exclusive rights to sell the iPhone ending soon, the company will be making every effort probably to retain that exclusive right to sell the iPhone and iPad with its service along with it.
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If AT&T loses the contract with apple it will still be able to sell the iPhone and iPad on their network, but other carriers in competition with AT&T internationally will also be able to sell the iPhone and iPad on their service. Overseas AT&T does not have exclusivity with the iPhone and iPad, but this would definitely hurt their market share if they were to lose the Apple contract. As AT&T progresses into the future I believe the company will further revolutionize the way the world communicates. AT&T has furnished the world with technologies that are important to communicating with managements, employees, and colleagues in daily business practices here at home and away.
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