Verizon vs. AT&T

AT&T and Verizon are the top two wireless network providers in the United States. Each firm hopes to expand its coverage in order to maximize revenue. However, the cell phone market within the U.S. is mature, meaning that most potential consumers already own a cell phone. In this situation, the only way for firms to increase their sales is to compete with each other through combative advertising. In recent years, these two firms have pursued an “Ad War” in which each tries to convince consumers that their brand is superior. In order to differentiate its current offerings and grasp more market share, Verizon focused on utilizing combative advertising and claimed that it is the best provider of 3G coverage in the nation. The classic example of this type of advertisement is one in which Verizon uses maps of the United States to demonstrate the lack of coverage of AT&T. AT&T did not take light of this situation and responded with a series of television advertisement that stated facts about its service and down played that of Verizon Wireless.

These combative advertisements are economically irresponsible for both providers as the cost associated with these marketing efforts continue to rise. Furthermore, Verizon slashed prices for its unlimited phone plan services, and AT&T responded with the same price reduction. In the end both companies are losing when it comes to profitability, because the costs of these ad campaigns are likely higher than the revenues generated from the transfers of market shares.

This blog post was written by Stephanie Evans, Camille Pereda, John Haywood and Jim Flanagan