The article describes AT&T’s new intention to expand its telecommunication services to Latin America by buying out the third largest wireless operator in Mexico, right after abandoning their intentions to deploy its plan for high speed in-flight internet.
Personally, I agree with this strategic business decision by AT&T. Firstly, I believe that this is a good decision by AT&T by purchasing ‘Grupo Iusacell SA’ because the company itself has already established a strong foothold within the industry as they currently have a subscription base of 8.2 million subscribers. This meaning that AT&T is going to invest less in resources for marketing and advertising to obtain customers. Instead, AT&T and dedicate its resources into technological development and research.
Secondly, I believe that, through analysing the articles with the PEST analysis, there are more opportunities in choosing to expand in Latin America politically. Especially after the 2014 World Cup, the region is politically stable, meaning it is a safe and wise place to invest in.
Thirdly, in terms of the social aspect there is an up and coming trend of growing middle class and population, and I think that allows for a great opportunity for AT&T to invest in due to the increase of potential consumers that would be willing to purchase AT&T’s subscription base.
Finally, economically, the region is projected to increase its economic growth by 3.6% this year, and 4.1% in 2015, meaning that the economy is expanding, which I believe implies a possible increase in the consumption of goods. In today’s new digital era, telecom services are more popular than before and this will only increase in demand.
As a result, with AT&T’s strong brand image entering a fairly untapped market, especially with its capital and resources to invest in further technological advancements, there is large potential that AT&T could control a large segment of the market in Latin America.
http://nationalinterest.org/blog/the-buzz/2014-latin-americas-big-year-9629