AT&T stock has been through the ringer. It has seen its share of ups and downs over the past two or three decades. During the last decade, the downward pressure has been intense. Even though I hoped to see their stock and their performance strengthen, it just has not happened. Not yet anyway. So can we finally expect to see growth, or will Ma Bell continue to struggle?
To answer that question, we need to have a longer-term, historical perspective of the company, the industry, the wireless and data network space, the new growth opportunities, the competition and whether AT&T T is set up to take advantage of them.
Let’s pull the camera back. All the excitement began roughly 20 years ago when SBC, the smallest Baby Bell of the seven, acquired AT&T, BellSouth and Cingular. That was a mouthful, and it took time for them to digest and re-order the company.
However, they did ultimately position the company to be a real player in the changing telecom industry, on a national scale, in wireless, Internet, telephone, data networks and more.
All in all, this was a good time for the company, their workers, customers and investors for a while anyway.
A Decade of Struggle With No End in Sight
Over the past decade, the wireless and telecom industry has been struggling with real growth. Don’t get me wrong, wireless, telecom and data networks are still a key part of our world. They spent time merging and showing growth.
In fact, they will always remain important as we move into new areas like AI. That will not change.
However, real, organic growth is another story.
You see, AT&T is a public company, so they need to show growth on an ongoing basis. Otherwise, they risk losing their investor base to other faster growing companies.
AT&T is not the only telecom that has struggled to find growth to keep investors happy.
Verizon, the nation’s other big wireless, telecom and data network company has shown the same weakness.
Both AT&T and Verizon VZ took some very strange new directions over the past decade. If you recall, AT&T acquired DirecTV, CNN, Warner Brothers Studio and renamed it all WarnerMedia. At the same time Verizon acquired AOL and Yahoo! with hopes of creating another Amazon.com or something crazy like that.
Both AT&T and Verizon’s ultimate goal was to expand their company to new industries. Ultimately, they both failed. And both eventually spun off what they had created.
I remember AT&T held an ”industry analyst and influencer briefing” at Warner Brothers Studio.
While it was impressive, even exciting to see the studio where so many great American films were created, it had nothing to do with the wireless, networking and communications business AT&T was really in.
Next AT&T Wave Struggles to Get Started
Now, after they got rid of this baggage that weighed them down, they had the ability to focus on wireless and the move to 5G and start their next growth wave.
Unfortunately, that did not happen. AT&T and Verizon both got new CEO’s and we hoped for the best, but growth has not returned.
There are many new areas like Artificial Intelligence, Chatbot technology and more which could all translate into real growth.
AT&T has been investing billions of dollars upgrading their network to 5G in order to keep up with competitors like Verizon and T-Mobile. However, they have not really seen growth in income to meet that expense.
Business Services, 5G Home Internet, Private Wireless
There are a few new areas which may have the chance to prove successful to AT&T.
One of these is the Business Services side of the house. Private Wireless is part of that group of services for the business community and the enterprise.
Another is AT&T 5G Home Internet. This service brings a high speed, wireless connection to the home or office to replace the traditional broadband line they offer, or which comes from a cable television company like Comcast Xfinity, Charter Spectrum or Altice.
These are two, hot areas that are seeing rapid growth and innovation from new competitors.
Private Wireless is for the business customer or enterprise, and 5G Home Internet is for the consumer or small business customer. So, they have two new services for the two sides of the house.
Competition from Verizon, T-Mobile, Dish, Qualcomm, Betacom
While these are two solid new areas for them to move into, unlike in the past, AT&T does face fierce competition already.
Private wireless competitors can and will most likely include companies like Verizon, T-Mobile TMUS , US Cellular, C-Spire, Cox, CenturyLink, Dish, Boost, Frontier, Xfinity Mobile, Spectrum Mobile, Altice and more.
Private wireless networking companies are also hot in this space. These include companies like Qualcomm, Betacom, VMWare, DELL, Cisco, Palo Alto Networks, HPE, Juniper Networks, Celona, Aruba, Fortinet and many others.
On the 5G Home Internet side, there are also many competitors including current or potential companies like AT&T, Verizon, T-Mobile, C-Spire, US Cellular, Xfinity, Spectrum, Altice or Optimum and more.
All these competitors in these two new growth venues mean two things. One, these may be real, new industry sectors in their very early stages. Two, being a winner in this area means competing against a growing number of others.
That means companies need to market, price, install and maintain these systems well.
AT&T sees these two new areas as potential growth avenues, which they are. They are talking about moving quickly into these new spaces.
The only question is, will they have the right messaging to the marketplace to position them as a leader in these new spaces? Or will competitors do better in those areas?
I don’t see vibrant messaging and marketing in the marketplace. Not yet anyway.
So, while AT&T does have two significant, potential growth areas in front of them, the big question is can they capture the attention of the marketplace and position themselves as a leader.
They must have both the technology, the manpower to make it happen and good marketing, messaging, public relations and advertising.
They are and will remain an important network. However, growth is another story and to keep investors happy, they must deliver it.
Some companies will and others will not. The only question I have today is which group AT&T will be in?
So, the real question is this. Is AT&T a bull or a bear?