Revenge of the Nerds: AT&T Proves It's Hip to Be Square

AT&T's new ad campaign and investments in Texas networks could help this telecommunications provider grow.

Mar 21, 2014 at 7:00PM

This week, AT&T (NYSE:T) proved it's cool to be a nerd, unleashing a new ad campaign designed to appeal to nerds, geeks, and everyday consumers around the world. This telecommunications provider's new commercials highlight two nerdy field-service technicians upgrading AT&T's network in an office, and explain how it works (in the simplest terms) to employees. Each ad concludes with the message, "Building a Better Network," a mission AT&T intends to follow now and into the future.

How is AT&T building a better network?
Building a better network starts from the top, and AT&T officials are investing in the company's everyday operations to ensure clients get the support they need. For example, AT&T invested $6.55 billion in wireless and wired networks in Texas from 2011-2013. These investments have brought more jobs to Texas and spurred business growth in the area.

AT&T Regional Vice President Holly Reed told the Dallas Business Journal that her organization will continue to invest in the Lone Star State. "Technology drives the speed of commerce," Reed said. "We're proud of this three-year investment that we've made. This continues to help us serve our customers and our business customers every single day."

Just as AT&T bolsters its wireless and wired networks in Texas, this telecommunications corporation could conduct similar upgrades in other areas to enhance service across the country.

AT&T is making waves among telecommunications providers
Network investments could help AT&T improve its global reputation and ensure that its stock price rises. Enhanced wireless and wired networks mean better service for AT&T's business and residential clients, which could translate into profit and revenue increases.

Verizon (NYSE:VZ) and T-Mobile (NASDAQ:TMUS) are two telecommunications providers that could be affected by AT&T's recent moves. While both of these companies are well-positioned for long-term growth, each faces unique challenges in the telecommunications market.

Verizon shares rose 18% last year, but CEO Lowell McAdam recently admitted that new products and reduced costs for consumers won't necessarily help Verizon boost its profits. Instead, McAdam said he anticipates that the appeal of delivering high-quality videos over wireless devices will help his company extend its reach. But, the telecommunications market offers no guarantees, and if Verizon cannot keep pace with AT&T's marketing efforts and network upgrades, it risks losing money in 2014.

Conversely, T-Mobile has been aggressive in its efforts to garner attention from consumers. T-Mobile is buying out rivals' customers from their contracts and providing cheaper alternatives, which has helped it add 2 million monthly subscribers over the past three quarters. In fact, AT&T has taken a page out of T-Mobile's playbook by helping customers get out of contracts with existing telecommunications providers. As a result, both companies could boost revenues soon.

The bottom line on telecommunications providers
AT&T and T-Mobile appear to be heading in the right direction, but Verizon has its work cut out if it hopes to keep pace with its chief rivals. Proactive marketing campaigns by AT&T and T-Mobile, combined with Verizon's poor response thus far, will influence the telecommunications market for years to come. If more consumers switch to AT&T or T-Mobile, Verizon could be forced to make drastic network or price changes to get consumers' attention in a highly competitive marketplace.

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Daniel Kobialka has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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