Supply Chain
AT&T maintains certain parts of its value chain in house and outsources other parts. In the operations arena, network equipment manufacturers are key suppliers for AT&T’s wireless network. Similarly, transmission line constructors are crucial for AT&T’s wireline businesses. The level of involvement of outside companies can vary and may be as simple as providing copper wire or as complex as the installation of cell phone towers. AT&T has spent an average of $18.9 billion a year on construction and capital expenditures over the period spanning 2007-2010. This smount of capital expenditure highlights the importance of the buying side of the value chain. Alcatel-Lucent and Ericsson are the two network equipment suppliers for AT&T’s current 3G network and AT&T has leveraged those existing relationships by selecting both suppliers for the construction of its next generation wireless network. Ericsson is also a key supplier for AT&T’s wireline business. With extensive relationships with large suppliers, AT&T is able to take advantage of economies of scale by outsourcing certain operations to the firms that dominate the global network equipment industry. While the company’s internal research and development activities have primarily supported the wireline business, wireless technologies such as GSM, UMTS, and Long Term Evolution (LTE) were developed by others and are generally widely adopted in the industry.