YOU ARE AT:Analyst AngleKagan: AT&T going back to the future for growth

Kagan: AT&T going back to the future for growth

Let’s take a look at the present state of AT&T and take a look at their plans for growth moving forward. The AT&T brand name has been around forever as a leader in telecommunications, wireless and internet. Investors have seen wave after wave of growth and change over many decades. To keep their investors satisfied, they do things their competitors don’t. They continue to make big, bold bets that take them in new directions.

Many moves AT&T has made over the decades have been positive and led the company to growth. They started out as the phone company but have evolved into a powerful provider and leader in other areas like wireless and Internet services and more.

AT&T history of change over decades in wireless, Internet, telecom

Remember, AT&T was the first to launch the Apple iPhone when it first appeared and hung onto it exclusively for a few years. This was a big win and led to a huge success for the company.

However, every growth wave has a limited life span. Every growth curve rises, crests then falls. That’s why successful companies keep introducing the next growth wave before the current one starts to weaken.

As an example, remember the Apple iPod. This music device was an incredible success story, but it had a limited lifespan. Today, the features of the iPod are on the iPhone. So, the standalone iPod had a growth wave that rose, crested then fell.

Every growth wave rises, crests then falls

Some growth waves are last a long time, while others are short. Example, the iPhone has been around for nearly fifteen years and it’s still growing.

In an effort to continue to show growth to keep investors happy, AT&T has had to introduce the next big growth wave on an ongoing basis, decade after decade. As each is successful and attracts users, eventually they must introduce the next big thing.

The problem is their most recent growth wave didn’t work out as well. Over the last decade, AT&T entered pay TV with Uverse. Verizon did the same thing with FiOS as did Comcast with NBC Universal.

AT&T move into pay TV, WarnerMedia did not work

During the last decade they acquired DirecTV then the WarnerMedia assets. That means AT&T became a behemoth in pay TV and entertainment.

That being said, they simply could not make this into a success.

If you remember, this was not the first time AT&T tried and failed at pay TV and entertainment. Before AT&T was acquired by SBC roughly fifteen years ago, they acquired TCI or Telecommunications Inc, the largest cable television company in the United States.

AT&T second attempt at pay TV

Doing so turned them instantly into the largest cable TV company in the country. However, that failed as well, and they eventually sold to Comcast. At the time, Comcast was a small, rural cable TV company.

This acquisition instantly transformed Comcast into the largest cable TV company in the country and that have retained that honor ever since. Next, Comcast acquired NBC Universal and are doing well.

During that time, AT&T sold off most of their business units and the company was a shadow of its former self.

It was then acquired by SBC, who also acquired BellSouth and wireless giant Cingular. The new AT&T became a leader in wireless and telecom once again.

So, as you can see AT&T has been to this rodeo before. Sometimes they win. Other times they lose. But they never stop trying.

This is something every investor, customer and worker likes.

AT&T is a gutsy 5G wireless growth company

This is the sign of a real, gutsy growth company. A risk-taking industry leader. As a matter of fact, if it was not for AT&T and the changes they have made to themselves and the industry over decades, other competitors would have been happy staying in their corners.

The changes we have seen in the industry have all started with AT&T. Wireless, internet, telecom have all changed and expanded dramatically over time.

Unfortunately, AT&T cannot understand or work with the entertainment industry. They tried it twice under different management groups with massive investments, and they failed both times.

So, that’s why AT&T exited pay TV and entertainment. Now they can focus on growth in their core business, wireless.

Investors like how AT&T getting back on core growth track

I think investors, customer and workers will like the new direction AT&T is taking. They are going back to the future. They are getting back on the growth track with their core services.

Wireless is going through an enormous growth wave with 5G, and I believe this opportunity will continue for many years to come. Before long we will start talking about 6G and growth will continue.

This is the area AT&T should be focused on. And thankfully, this is the area they are focusing on.

That’s why I think AT&T is on the right track once again. It may take them some time to deal with the debt they piled up over the last decade, but once they do, I see AT&T leading the way into the next generation of wireless with 5G, 6G and beyond in true AT&T style.

That does not mean CEO John Stankey can just snap his fingers and change everything overnight. It will take plenty of time and effort.

That being said, from what I can see right now, it looks like AT&T could finally be getting back on what may become a healthy growth track in the rapidly changing 5G wireless, telecom and internet space.


Jeff Kagan
Jeff is a RCR Wireless News Columnist, Industry Analyst, Key Opinion Leader and Influencer. He shares his colorful perspectives and opinions on the companies and technologies that are transforming the industry he has followed for 35 years. Jeff follows wireless, wire line telecom, Internet, Pay-TV, cable TV, AI, IoT, Digital Healthcare, Cloud, Mobile Pay, Smart cities, Smart Homes and more.

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