AT&T has reported its quarterly figure at $39.8 billion, a 1.8% year-on-year decline. There was good, bad and mediocre, but there is reason to be hopeful if you’re an AT&T fan.
In the core wireless business, AT&T looks to have produced a relatively solid performance, despite competition intensifying across the states. It did continue to drop customers, 89,000 postpaid subscribers in the US, however this compares to predictions of 256,000 from analysts. If you include the less lucrative prepaid customers, the team added 178,000 phone subscribers across the quarter.
It might be considered damage limitation as T-Mobile US runs riot across the states, but for some it could be a good result of sorts. At least the trends are kind of heading in the right direction.
“While the second quarter provides a good snapshot, the year-do-date view actually provides a more complete picture of how we are performing in a challenging and competitive environment,” said CFO John Stephens on the earnings call.
“Year to date, revenue has been pressured by fewer phone upgrades and declines in legacy services. At the same time, our cost containment efforts are paying off, and it’s showing up in our margins and our earnings.”
One area which AT&T does seem to be seeing more positive news is focused around its DirectTV Now offering. While the traditional TV space does continue to decline, its OTT TV proposition is continuing to attract customers. The positive are just about covering the leaving cord-cutters, but that’s good news for the moment.
Total video subscriber numbers were essentially flat, which the team seem relatively happy with, of which 491,000 belong to DirecTV Now. In truth, the OTT offering is relatively competitive, and could be seen as attractive for current postpaid subscribers which has the option of a zero-rating contract for the content.
The US market for OTT TV is pretty competitive with some established names flying around. The likes of Sling TV, YouTube TV, Sony’s Vue, and Hulu Live TV, will make it a tough ask for DirectTV Now, though it priced quite competitively at $35 per month to start, featuring 60 channels including big-time broadcasters such as NBC, ABC, and Fox.
Another segment which is heading in the right direction is the broadband business. The team boasted of 112,000 IP broadband net adds for the quarter, taking the total number of fibre customer locations to 5.5 million. Total broadband net adds were a bit less attractive at 8,000, but on the whole, the entertainment group (video and broadband) has a bright future for AT&T.
On the network infrastructure side of things, there does seem to be some progress there as well. Its ‘5G Evolution’ plan (which does seem to be a bit of buzzword capitalization) is underway in Austin and Indianapolis, with the team expecting to hit 20 markets by the end of the year. It’s not 5G so don’t get fooled by the advertising spurge, but another incremental step towards the holy grail. Despite the efforts of the marketing team to soil the project, it is good progress.
On the virtualization from, its SDN project is, again, making good progress. By 2020, the ambition is to have 75% of traffic on its software-defined network; the team has claimed to have hit 40%, which is encouraging.
Overall, we’re not really too sure what to say here. There are some positive areas, but we kind of have the feeling the team is running around plugging holes in the hull. There needs to be a bigger swing in momentum if AT&T is to stop the ship from sinking further.