What’s Next for AT&T After Spinning Off WarnerMedia? Jeff Kagan

Jeff Kagan  |

Image: AT&T CEO John Stankey. Source: AT&T

AT&T ( T) CEO John Stankey has accomplished step one of his rescue effort for Ma Bell. So, what’s next? He spent the last couple years spinning off the WarnerMedia assets of CNN, Warner Brothers and also DirecTV. Now AT&T is back to being good old Ma Bell. Back to the basics of 5G wireless, telecom, broadband, Internet, data networks, fiber and the like. Now it’s time for the next step.

So, what is the next step for Ma Bell? Can Stankey take the company to the next step and restart its growth engines. We will see.

AT&T has been on a rocky road for a decade

AT&T has been on a hell of a ride over the last decade. You see, investors put incredible pressure for growth on every company and every CEO. Most investors simply do not care about the long-term viability and competitive nature of a company. Rather, most investors are focused on making money.

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The CEO, however, must focus on growth and stability of the company moving forward as well as stock price. And that’s the rub for many companies.

That’s where AT&T went off the tracks over the last decade. In search of growth, it wanted to expand into new areas. The company saw what Comcast ( CMCSA) was doing and wanted to duplicate the effort. Comcast Xfinity merged with NBC Universal and got into wireless and mobile services. So far, the combined entity has been doing a good job, even through the pandemic of the last two years.

AT&T, Verizon, T-Mobile back on growth track

AT&T could have been another big success story, but it was too highly leveraged. There was no room for error, and when the pressures of the last few years from business mistakes to Covid-19 hit, it was simply more than the company could handle.

AT&T was not the only victim of this volatile era.

Verizon ( VZ) also suffered greatly as well. Several years ago on CNBC, its CEO said investors should not expect growth for quite a while. Then the company acquired AOL and Yahoo in search of growth outside of wireless and telecom. Those acquisitions failed to deliver growth, however, and Verizon spun them off the way AT&T spun off WarnerMedia and DirecTV.

T-Mobile ( TMUS) was a mixed bag. It was the smallest and weakest of the four top wireless carriers at first, before spending years rebuilding its network and making up for lost time. Ultimately, the company acquired Sprint, which was good, but it also tried wireless pay TV, which, as with AT&T and Verizon, was a failure. So, Verizon got out of that business.

Shocked when AT&T dropped to number three after Verizon, T-Mobile

During the course of the last few years Verizon stayed as the number one wireless competitor, while AT&T was so distracted moving into the entertainment and news business that it took its eye off the wireless ball.

During that time, T-Mobile acquired Sprint and the combined growth let the company surpass AT&T as the number two wireless player.

This was a shock to the system for AT&T, its investors, workers and executives to find Ma Bell as the number three player in a three-way race.

So, AT&T was off track and something dramatic needed to be done to save it. That’s when John Sankey took over as AT&T CEO with a bold plan to undo all the changes the company had made in recent years.

What’s next for AT&T under CEO John Sankey?

So, hats off to John Stankey for this big win for him and for the company. The next question is what’s next for AT&T?

That’s what we have to watch. Wireless is once again a fast-growing industry as 5G continues to grow apace. AI, IoT, metaverse, broadband, data networks and so much more are going to be in the headlines going forward.

That’s a solid growth opportunity for Ma Bell, if it can leverage what it has and start its next growth wave.

That’s what I will be keeping my eyes open to see. Can AT&T do it?

AT&T needs to start next 5G, wireless, broadband, telecom growth wave

Now that AT&T has cleared away all the wreckage off the runway from the acquisition disasters of the last decade, perhaps the company can become a solid wireless, telecom and broadband growth engine.

I hope so. Nothing is guaranteed. It’s difficult to jumpstart a stalled growth engine, but if Stankey and AT&T can do it, then they could see a time of incredible strength and growth going forward over the next decade.

It is the same challenge all competitors face, including Verizon, T-Mobile and more. Finally, as we look forward and as we look at today’s service leaders, we see they are all in the right place and at the right time.

That could mean all of them could see incredible growth in coming years.

AT&T is in is the right place to launch its next generation. Hmmm. AT&T The Next Generation. That’s got a ring to it. Let’s hope it turns out that way.

 

Jeff Kagan is an Equities News columnist. Kagan is a Wireless Analyst, Technology Analyst and Commentator who follows Telecom, Pay TV, Cloud, AI, IoT, TeleHealth, Healthcare, Automotive, Self-Driving cars and more. Email him at jeff@jeffKAGAN.com. His web site is www.jeffKAGAN.com. Follow him on Twitter @jeffkagan and on LinkedIn at www.linkedin.com/in/jeff-kagan/.

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Equities News Columnist: Jeff Kagan

Source: Equities News

 

 

 

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