Boston, MA 08/04/2014 (wallstreetpr) – The Dallas based company AT&T Inc. (NYSE:T) missed the Wall Street estimates for the second quarter earnings for the year 2014. It reported a profit of 62 cents a share excluding some items, a 7% decrease for the same in the quarter of the previous year. To compete with high successful rival Verizon Communications Inc. (NYSE:VZ), AT&T has cut prices on its service plans at same time providing unbundled service and device charges. Average revenue from subscribers of AT&T has fallen and the equipment revenue has risen. Seeing such figures and with its new service plans in place, AT&T expects two third of members to be on its unbundled plans by the end of the year2014.
The Phone Financing Effect
AT&T Inc. (NYSE:T) fell short of earnings estimates for the second quarter attributable to customers who are switching to pay for devices with installments, a trend started by T-Mobile US Inc. (NYSE:PCS) last year. Second quarter profit of 62 cent a share did not match the analyst estimate of 63 cent average as per the data compiled at Bloomberg. AT&T introduced the plan called the Next to counter the effect of T-Mobile that would refrain its existing customers from moving away to other wireless services. AT&T sales rose 1.6 percents to $32.6 billion not matching up to the average estimate of $33.2 billion. The company has raised its estimates for the year 2014 sales but cut its range of earnings due to the effect of the installment plans offered by Next plan.
Managing Cloud Bandwidth
AT&T Inc. (NYSE:T), International Business Machines Corp. (NYSE:IBM) and Applied Communications have recently teamed up to develop a new technology called software defined networking (SDN). SDN supports cloud service providers with a faster way to access extra bandwidth when servers are overloaded or when a disaster shuts down cloud server. Simply put, SDN operates to coordinate data flow and provide more bandwidth when needed. This teaming up is outcome of the U.S Government initiative DARPA CORONET program created in the year 2007 to innovate to better networking architectures.
Better Video Streams on Internet
AT&T and Netflix signed an agreement according to which Netflix would pay AT&T for smooth delivery of video content to Netflix members. Netflix and AT&T Inc. (NYSE:T) mutual subscribers would now have additional connectivity to better view the video streams. However, the agreement comes in view of the Netflix public campaigns it has been waging regarding such payments and to bring the same for Federal Communication Commission’s notice and review of the market.