Three companies, AT&T (T) , Verizon (VZ) and CenturyLink (CTL) , which started out very similar to each other a decade ago, are becoming very different. Not only are these companies starting to take different growth paths going forward, but the way they communicate with the marketplace keeping analysts, investors and the media up to speed is very different as well. Let me share what I see.
As an Industry Analyst I have been watching the companies and industry and sharing my opinion for more than 25 years. I’ve become a familiar voice in a noisy industry. I take this honor and responsibility very seriously.
The vast majority of competitors in the wireless and wire line space have always reached out to me, making sure I understand their positioning and their thinking. As the industry expanded and changed, more companies from other sectors like Internet, television, VoIP and assorted communications technology continue to jump on the same wagon train.
Funny thing, the companies who reach out and communicate well with the marketplace always seem to be the companies who are the obvious leaders in their sectors. They not only keep innovating, but they keep leading.
Changes Over the Last Decade
Let me share some thoughts on three companies, which illustrate what I am saying. They started out very similar a decade ago, but they have been growing on different paths ever since.
Telecommunications has always been growing and changing, but a decade ago the telecom industry went through an enormous transformation. Many acquisitions changed the fabric of the industry. The seven regional baby bells merged into three. Long distance giants like AT&T and MCI were acquired by baby bells. Wireless continued to grow and consolidate as well. New industry segments were created. And that transformation is still occurring today.
Today, the three leaders in the wire line space are AT&T, Verizon and CenturyLink. The four leaders in the wireless space are AT&T, Verizon, Sprint (S) and T-Mobile (TMUS) . So let’s take a look at the wire line side of the industry. This is both for the consumer and business side of the marketplace.
AT&T is the Industry Leader
Today, AT&T is the most innovative, aggressive and effective in terms of growth and transformation. They are first to market with many new industry-transforming ideas. Over the last decade they single handedly launched the iPhone and lead the transformation of the smartphone and app sector, which today leads the entire wireless industry.
Today AT&T is also actively investing in their new Mexican operation and getting ready for approval of their DirecTV (DTV) acquisition. They are leading the way helping other industries go wireless, like automotive, healthcare, retail and more. These are just a few of many major transformational growth opportunities the company is focused on and there are always more.
Over the last decade, AT&T has done a great job of communicating with analysts, investors and the media on their changing direction and strategy. That makes it much easier to understand their direction, the industry direction and where they are in the process.
With all that said, AT&T is the industry leader with their open and growth oriented approach.
Verizon is a Fast Follower
Verizon has a similar story, however their blade seems to have dulled over the last few years. They are no longer a leader in the space like they were years ago. They would rather not change the industry dynamics. However when a changing industry begins to threaten them, they do step up.
Verizon is making growth moves like their recent AOL acquisition. Even so I would say Verizon is quieter and is no longer an industry leaders. Instead I would say they are a fast-follower. They react when they need to react, not to lead.
So I would say Verizon is in the middle of the pack when it comes to their ability to lead and communicate their vision with analysts, investors and the media.
They used to be much better and stronger. I hope they understand what I am saying and get back to doing things the way they always used to.
CenturyLink is Too Quiet
CenturyLink is the third baby bell and to tell you the truth, the mystery. I don’t know as much about them as I do about AT&T and Verizon. What’s interesting is, I always had great relationships with two of their acquisitions, Qwest and Embarq, which used to be Sprint local phone service. These were two local phone companies.
However once CenturyLink acquired them everything became very quiet. And quiet has hurt the company from a competitive and growth and point of view. They still approach the marketplace like it was twenty years ago. Back in the 1990’s local phone companies could be quiet and still grow. That’s because they had no competition and their industry was not in transition.
That is no longer the case. Today there is plenty of competition winning in the marketplace. The industry is changing and it is critical for CenturyLink to be seen in that light.
Things have changed and CenturyLink needs to wake up before it’s too late. Innovation and industry leadership are key. Good relationships with the analyst, investor and media community are key.
With all that said, CenturyLink may be waking up and starting to be more open. There are signs they are starting to understand the new rules of the game. They recently held an investor day and they will soon be holding an industry analyst day.
This sounds like a good first step, but there are so many more similar steps they must take. They must raise their profile with the entire analyst, media and investment community. They must focus on both the larger group and the smaller, more influential group of players as well.
I’ll be keeping my eyes open and hoping for the best.
The wire line, wireless, television, Internet and assorted communication companies continue to grow and to change over time. I wish every player success, however I know over time that every company performs on their own basis. There will be winners and losers. There always are. However the best result would be for all players to be winners to one extent or another.
Even when companies start out as a group of almost identical companies, over a decade they can become completely different. That’s what is happening in telecom.
With that said, growth is possible for every company. I wish every company success going forward in their quest for growth as the industry continues to change. With that said, there are always some companies who understand and get it, and others who don’t.
Equities.com columnist Jeff Kagan is a Wireless Analyst, Telecom Analyst, Industry Analyst and consultant. He shares thoughts on the changing industry, which he's been following for 25 years. He follows what's hot, what's not, why and what's coming next. Email him at jeff@jeffKAGAN.com.
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