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Atlantic Tele-Network (ATNI) |
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WIKI ANALYSIS
Atlantic Tele-Network (ATNI) is a provider of wireless and wired communication services for underserved markets in the US, the Caribbean, Bermuda, and Guayana. The company operates in two main segments: Wireless, for cellular voice and data services, and Wireline, for hardwired communication services. Atlantic Tele-Network also sells wholesale wireless services, commonly known as roaming, to sixty-five other US based wireless communication providers. In the US, the company’s areas of wireless business are located in rural, underserved markets in the Southwest and Midwest US under the ‘’’Alltell’’’ brand; the company’s US wired operations are concentrated primarily in Vermont.[1] The company’s future success will depend on both its ability to maintain competitive pricing in its retail markets compared to other carriers and the expansion ambitions of larger wireless carriers as they build their own cellular infrastructure, reducing the need for ATNI’s wholesale services.
Business Segments[2]
- US Wireless Retail - 47% of net sales
- US Wireless Wholesale - 25.8% of net sales (53% growth)
- International Wireless - 8.3% of net sales (14% growth)
- Wireline - 13.6% of net sales (4.5% decrease)
- Equipment and Other - 4.8% of net sales
The company’s retail wireless segment was created with the acquisition of Alltell in April 2010. Equipment sales, which includes the retail sale of handheld devices, expanded exponentially due to the Alltell acquisition.
Business Growth
FY 2010 (Ended December 31, 2010)[3]
- Net Revenue more than doubled from 2009 to $619.1 million.
- Net Income grew 8% to $38.5 million.
The company's net revenue increased more than 250% in 2010 following the company's acquisition of parts of the Alltell network. ATNI acquired more than 800,000 wireless subscribers following its purchase of parts of Alltell after Verizon's purchase of the majority of the Alltell network. However, the increased revenue did not translate into significantly higher net income and the company expects the ongoing integration process to continue through the first half of 2011.[4]
Trends and Forces
Major Cellular Providers’ Network Expansion
Atlantic Tele-Network has thrived on providing wireless communication services to underserved areas within the US. However, as the country's wireless industry continues to undergo a consolidation driven by the three largest national carriers, these companies will continue to expand their geographic coverage and invariably encroach on ATNI's territory. In addition to operating in underserved areas, ATNI also provides roaming services to the larger networks, but this capacity would become redundant if the larger carriers expand into the same geographic area.
Maintaining Competitiveness in Underserved Markets
Atlantic Tele-Network has focused on geographic markets with little or no wireless competition. In order to grow their subscriber base and retain subscribers, the company has traditionally focused on providing cheaper plans than many of their larger competitors. However, when the larger companies move into ATNI's markets, the company will have to maintain its pricing and network quality competitiveness in order to remain an attractive option for many of its customers.[5] The company's prices must also remain competitive because many subscribers tend to drop smaller wireless providers in order to join a larger, national network like those provided by ATNI's competitors.[6]
Competition
Atlantic Tele-Network's services compete primarily with the three large telecommunication companies below, but also with smaller, regional utility companies.
- Verizon Communications (VZ) is the largest wireless telecommunication services provider in the United States.
- AT&T (T) is the second-largest wireless telecommunications company in the United States
- Sprint Nextel (S) is the third-largest wireless telecommunications company in the US, although it is significantly smaller than the two industry leaders.
The company's wireline operations compete more directly with other regional/local telecommunications utility providers in the various geographies served.
References
- ↑ ATNI 2010 10-K, p. 36
- ↑ ATNI 2010 10-K, p. 40
- ↑ ATNI 2010 10-K, p. 40
- ↑ Atlantic Tele-Network Shares Plunged: What You Need to Know, Motley Fool, 3/2/11
- ↑ Atlantic Tele-Network, Inc. Improves Network Coverage for Alltel Wireless Customers, WSJ, 3/14/11
- ↑ Atlantic Tele-Network Shares Plunged: What You Need to Know, Motley Fool, 3/2/11
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