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Jeff Kagan: The Future of AT&T Looks … Bright?

AT&T is finally showing stronger than expected results. Does this mean the worst is over?
Jeff Kagan is a telecom, technology and wireless analyst and consultant. Follow him at and on Twitter @jeffkagan.
Jeff Kagan is a telecom, technology and wireless analyst and consultant. Follow him at and on Twitter @jeffkagan.

AT&T () is finally showing stronger than expected quarterly results. Could this mean the worst is over and they are turning the corner? Let’s take a closer look at the company formerly known as Ma Bell, the corner they painted themselves into, their painful attempt to recover and whether they may be starting a long-term recovery.

History has shown that for more than a century, AT&T has been one of the leading telecommunications companies in the United States. In fact, they once had the most recognizable brand name in business. But that level of success did not mean they were indestructible. In fact, AT&T was crumbling in the late 1990’s and had become so weak, it was a shadow of its former self.

At that point, AT&T was on life support. That’s when they were acquired by SBC, the smallest of the Baby Bells, out of San Antonio, Texas. It was 2005, and the acquisition breathed new life into the company giving it the boost it needed to not only survive, but to grow. In fact, it’s important to recognize that today’s AT&T is really a super-sized SBC. The AT&T many of us grew up with is no longer around.

Around the same time, the Apple iPhone and Google Android entered the wireless smartphone scene. The new AT&T managed to win an exclusive for a few years on the iPhone, which gave them another boost. After several years digesting their acquisitions, the new AT&T looked like a stronger competitor once again.

But it’s important to remember that the entire telecommunications industry went through a similar transformation. The industry — full of smaller and regional players — consolidated. Suddenly, there were fewer, but larger, national competitors.

The Crazy Times Began

Looking back over the past decade from today’s vantage, the writing has been on the wall: wireless growth was slowing. In order to keep their investors satisfied, AT&T — and in fact Verizon () and all similar companies — needed to expand in order to show continued revenue growth.

And so the crazy times in telecom and wireless began. AT&T acquired DirecTV, and WarnerMedia, including Warner Brothers Studio and CNN and more. Verizon acquired AOL and Yahoo. Both companies feared investor loss, so they tried to create something bigger than life. They both wanted to morph into a new kind of company. However, after several years of trying, it was clear they’d failed.

During recent years, both AT&T and Verizon got new leadership in hopes they could help the companies recover and grow once again. Under new CEO John Stankey, AT&T started to focus on its core — wireless, telecom, Internet and similar services for the consumer and business marketplace.

Stankey painfully learned it was difficult and time-consuming to turn a ship of that size around. So he focused on 5G, which is one of the biggest and newest growth opportunities AT&T has ever seen. Not only is it the upgrade path for users, but 5G is also a huge growth opportunity — because every business, government agency and service will be investing heavily to transform the way they do business.This impacts countless companies and industries and represents a huge growth opportunity for the next decade. Finally, something for AT&T to sink its teeth into.

That’s the good news. The bad news is this is also an opportunity for every competitor to AT&T as well. I do believe AT&T will eventually begin a recovery and once again be a strong competitor. The only question is when the turnaround will begin. The company’s current earnings report was better than expected. Could it be the start of a long-term recovery?

We won’t know for sure for a while. We’ll have to keep our eyes on their performance in the consumer market, the business market and the B2B market. We’ll also have to keep our eyes on their competitors and the changing marketplace.

Jeff Kagan, a telecom, technology and wireless industry analyst and consultant, is an columnist. He covers 5G, AI, IoT, the metaverse, autonomous driving, healthcare, telehealth, pay TV and more. Follow him at, and on Twitter @jeffkagan and LinkedIn.