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AT&T Battles Against T-Mobile with Aio National Launch
AT&T Battles Against T-Mobile with Aio National Launch

By Jennifer LeClaire
August 30, 2013 10:25AM

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Sprint has been especially successful when it has kept the marketing for its postpaid and prepaid brands separate, which it hasn't done over the last couple of years. Seeing the results, AT&T has apparently decided to keep its prepaid Aio brand very separate from its postpaid brand, says wireless industry analyst Roger Entner.
 



AT&T is making a nationwide push throughout the U.S. with its prepaid brand. After launching in key Southeast markets earlier this year, the carrier will roll out Aio Wireless nationwide beginning mid-September.

Following in the footsteps of Sprint and aiming squarely at T-Mobile, AT&T introduced Aio in May. AT&T is billing Aio as a wireless service for the consumer who is looking for a first-class experience at a value price. Like T-Mobile, Aio offers unlimited talk, text and data with no annual contract.

"We talked with no-annual-contract customers and created our service around what they want," said Jennifer Van Buskirk, president of Aio Wireless. In her research, she said, no-annual-contract customers want simple, easy plan choices with unlimited offers; first-class service at affordable prices; great devices; nationwide voice and data coverage; and no annual contracts.

What About iPhone?

"We are set up to win over value-conscious customers who are increasingly moving towards smartphones and mobile broadband," she said.

Aio has three rate plans to choose from for smartphones, tablets and feature phones. Plans range from $40 to $70 per month, with taxes and fees included. The company will offer devices from several manufacturers, including Samsung, Nokia, and ZTE, as well as Apple's iPhone.

Some may view the launch of Aio as ironic, considering AT&T's failed bid for T-Mobile. Will it work? The prepaid market is certainly growing rapidly, which is why the carrier dived into the segment. But jumping in, even with plenty of money to market the brand, doesn't guarantee success.

We caught up with Roger Entner, a wireless analyst at Recon Analytics, to get his take on AT&T's nationwide Aio push. He told us the carrier is executing a branded segmentation strategy similar to what Sprint has already done. But how it handles the marketing could make all the difference.

It's All in the Marketing

"Sprint was initially very successful with its prepaid strategy," Entner said. "And Sprint has been especially successful when they've kept the marketing for their brands separate, which they haven't done in the last couple of years. AT&T is not making the same mistake by integrating the marketing of the Aio brand with its postpaid brand."

Entner noted that when Sprint launched its prepaid effort with Boost and Virgin Mobile, the company kept the marketing efforts separate from its postpaid strategy. But eventually, Sprint brought all the marketing under one roof in Santa Monica, Calif. Entner said that ultimately hurt the third-largest carrier's prepaid business.

By contrast, AT&T's postpaid marketing group is in Buckhead, Ga. and the prepaid marketing group for Aio is in Alpharetta, Ga. Entner said it's important for AT&T to keep the two marketing teams separate otherwise one will always be subservient to the other -- and the postpaid marketing group generally wins the battle for dollars.

"When Sprint bought all its marketing under one roof, the company shot their prepaid momentum in the foot. Whenever they had the choice to focus on prepaid or postpaid, they opted for postpaid," Entner said. "Sprint didn't get the postpaid growth and they didn't get the prepaid growth either. So by keeping those two groups separate, AT&T is better able to maximize the success of both brands."
 

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Comment:

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Peter Marker:

Posted: 2013-08-31 @ 7:27am PT
There are other plans even cheaper, and there is Ting which offers a la carte monthly.

There is a reference guide of the prepaid resellers (25+) and categorized by network on http://www.allprepaidplans.com



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