It is interesting that AT&T is buying Mexican’s largest cellphone company Iusacell, hoping to go global. Though its previous target is to compete in the Europe market while buying Vodafone(British phone company).
The prime reason for going worldwide is that AT&T thinks that the global telecommunication marketplace is going to scale.
How will the market of global telecommunication system be in the future? Yet it may seem useless to most of us since it’s not related to our daily life, going global is indeed the trend of technology and development of goods. Companies in majority is always chasing to make break-throughs to make their product better, therefore keeping on using the latest technologies and ideas. AT&T’s taking over Iusacell is a great illustration of creating values for customers(to some in need).
However, as AT&T begins to use the global telecommunication system, it is also incurring higher cost. In this case, it spent $2.5 billion buying Iusacell and paying their debt. Then, the question arose, how will they break-even? And even if they can break-even, how long it would it take? At the same time, its original services is facing disruptive innovation, projecting protential lost in existing profit.
Work Cited:
“GTS|WMO” WMO <http://www.wmo.int/pages/prog/www/TEM/GTS/index_en.html> 2014
“AT&T to buy Mexican Wireless Provider Iusacell for $2.5 Billion” www.nytime.com <http://dealbook.nytimes.com/2014/11/07/att-to-buy-mexican-wireless-provider-iusacell-for-2-5-billion/?module=BlogPost-Title&version=Blog%20Main&contentCollection=Mergers%20&%20Acquisitions&action=Click&pgtype=Blogs®ion=Body> Nov 7, 2014
Source of Picture
http://www.forbes.com/companies/att/
http://www.netscribes.com/blog/recent-investments-telecom-industry-2/