Cingular Sensation: Revenue, Profits Hit Record Highs
When Cingular Wireless bought the former AT&T Wireless for $41 billion a few years back and became the biggest cellular company in America, a lot of wireless wonks predicted the buyout would be a failure, and that Verizon Wireless would come back and catch Cingular.
Those wonks may still end up being right, at least about Verizon catching Cingular. During the third quarter of 2006, for instance, Verizon added 1.9 million customers. Cingular only added 1.6 million. But Cingular is no failure these days. With just-announced profit margins in the 40 percent range and a new Apple iPhone on its way in June, Wall Street loves Cingular and its parent company, which strangely enough is known as AT&T.
As Cingular adopts the AT&T brand, it would appear that the big are just getting bigger. Verizon and Cingular are at each other’s throats over who’s best, particularly in terms of coverage. T-Mobile. which has competitive signals in some, but not all, markets, can offer gimmicks like My Faves and tout the relative popularity of T-Mo’s cusomer service.
Carriers like Sprint, whose calling plans and data packages are some of the lowest in the industry, continue to struggle. Customers find out the hard way that Verizon, with its reputation for best coverage, generally has the highest prices. Cingular (AT&T) has poured millions into improving coverage and reputation the last few years, while generally undercutting Verizon’s prices.
As a result Cingular is enjoying the best of two worlds - it’s a “discount” carrier (compared with Verizon, anyway) with coverage that has improved to the point that a lot of customers can’t tell the difference between Verzon and Cingular. Until they look at their bills at the end of the month.
[via Business Week]
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