How AT&T, Comcast Are Creating a New Industry: Jeff Kagan

Jeff Kagan  |

Image: HBO Max, from AT&T WarnerMedia; Xfinity X1, from Comcast. Sources: AT&T, Comcast

AT&T and Comcast are the two key companies that are transforming and expanding the telecommunications industry. This started 15 – 20 years ago and is continuing today. Looking backwards, we see all these different industry segments as separate. Looking forward, they are all coming together and expanding. Let’s take a closer look at AT&T and Comcast as leaders of the changing industry.

In the 1990s, each industry segment was separate. Different companies competed in each segment like local telephone, long distance telephone, wireless, internet, cable TV and more.

Then local and long-distance companies started to merge. This blended these two industry segments once again — something that was broken up during the divestiture of Ma Bell in the early 1980s.

Suddenly a single company could offer both local and long distance. This time, however, there were several different companies that offered both.

After the divestiture, there were seven Baby Bells, but through acquisitions, they became three. AT&T and Verizon are the largest and most successful.

Wireless, which was a separate industry, was acquired by the Baby Bells, and the many smaller mobile carriers became fewer and larger service providers.

AT&T became the first juggernaut in telecom

Then a very big step changed things about fifteen years ago when the smallest Baby Bell called SBC acquired BellSouth, AT&T and Cingular. That was when AT&T had become a shadow of its former self. As the baby bells offered long distance, AT&T dwindled.

At the time, AT&T was also the largest cable TV company after its acquisition of Tele-Communications Inc. AT&T Broadband was sold to Comcast, transforming it overnight into the largest cable TV industry player. Cable TV continued to consolidate over the next several years.

This new, larger and more diversified company changed its name from SBC to AT&T, moved from San Antonio to Dallas and started its next major growth wave.

Today, AT&T is a major success story once again in many industry segments.

This industry shift includes the move to smartphones like iPhone and Android and the explosion of wireless data from a few hundred apps to millions today.

Comcast NBC Universal is a juggernaut in news, communications, entertainment

In the years since, we have watched the industry continue to change and expand in new and different directions.

Comcast acquired NBC Universal and continued to grow. Today, it is no longer just a cable TV company like competitors Charter Spectrum, Altice, Cox and others. Today, Comcast is a juggernaut in the communications and entertainment space.

The company also offers VoIP telephone and wireless service called Xfinity Mobile, and it's an MVNO reselling Verizon Wireless services.

On top of that, Comcast is introducing Peacock, which is its entry into the streaming TV services world.

AT&T WarnerMedia is now a juggernaut in the same realms as Comcast plus wireless

During the last several years, AT&T has made similar major acquisitions that position it alongside Comcast in terms of services.

First, AT&T acquired DirecTV, which grew and transformed its position in pay TV and that now includes AT&T TV.

The company is introducing HBO Max today, which is its entry into the streaming TV world that will be boosted next year by the release of the long-rumored and long-awaited Zack Snyder cut of Justice League.

So, AT&T is no longer just a phone company or wireless company like Verizon and CenturyLink.

By the way, the four major competitors into this new streaming services space to date are HBO Max, Peacock, Disney+ and Apple TV+.

Streaming TV services may be next big growth wave

This may be one of the next big areas of growth. So, we will have to keep our eyes on it.

Next, AT&T acquired Time Warner which was renamed WarnerMedia. This includes companies like Warner Brothers, CNN and so much more.

AT&T direct competitors used to be Verizon, CenturyLink and T-Mobile.

However, going forward AT&T continues to be a juggernaut in the wireless, telecom, Internet, pay TV and entertainment space.

AT&T and Comcast are now direct competitors

That means AT&T and Comcast are new and direct competitors in this larger industry.

There are differences, however. Comcast does not own a wireless network. It is an MVNO reselling Verizon Wireless, so it does not have the control over that service that it would if it owned it.

AT&T owns AT&T Mobility. That means it controls its wireless network and future. That control gives AT&T the ability to roll out blended services which will be important moving forward.

These are some of the reasons I say AT&T and Comcast are the two most important companies in the changing and expanding industry. They are transforming the world from what we knew to something completely new and different moving forward.

Just like these industries look completely different from the way they looked ten years ago, they will look just as different moving forward over the next decade.

AT&T and Comcast are creating a new, expanded industry

Both AT&T and Comcast compete in multiple industry segments. Going forward they will also compete with each other as juggernauts in this new and expansive industry.

They also compete with their historical competitors like Charter, Altice, Verizon and T-Mobile. Don’t forget Disney+ and Apple TV+ and others.

Each of these other companies is a threat, but (currently) only in the spaces they have always occupied.

Both AT&T and Comcast, however, are growing far beyond this limited space. These are the two companies to watch. They are re-writing the entire industry.

It will be interesting to watch how AT&T uses its advantage in wireless. AT&T Mobility could be a crucial differentiator.

These are some of the reasons I think AT&T and Comcast are two companies which are transforming and expanding the industry of yesterday into the wireless, telecom, Internet, pay TV, streaming services, news and entertainment giants of tomorrow.

Now we sit back and watch what happens next.


Jeff Kagan is an Equities.com columnist. Kagan is an Industry Analyst, Thought Leader and Influencer focused on Wireless, Telecom, Pay TV, Cloud, AI, IoT, Tele Health, Healthcare, Automotive and Self-Driving cars. Email him at jeff@jeffKAGAN.com. His web site is www.jeffKAGAN.com. Follow him on Twitter @jeffkagan and LinkedIn www.linkedin.com/in/jeff-kagan/

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Equities Columnist: Jeff Kagan

Source: Equities News

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer. The author of this article, or a firm that employs the author, is a holder of the following securities mentioned in this article : None

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