Kagan: What the AT&T of tomorrow will look like


AT&T is a company in transition. Then again, it has always been a company in transition for the last 15 years and that is only continuing. So, let’s pull the camera back and take a look at who they were, who they are today and who they will be going forward. This is important information for investors, workers, executives, customers, partners and competitors.

I’ve been an industry analyst for more than 30 years and have followed the companies and industries including wireless, telecom, Internet, pay TV and more. I believe what this industry will look like and what the key industry leaders will look like will be very different going forward.

Today, AT&T is one of the key industry leaders. They have the guts to make big changes, then other industry players follow them. They have done business this way for the last fifteen years and that will continue going forward.

Yesterday, wireless, telecom, Internet and pay TV were all separate sectors that have shown strong and steady growth for quite a long time. In fact, until the late 1990’s, even local and long-distance telephone were separate sectors. Companies competed in one sector. Period. Then things started to change.

Fifteen years ago, the AT&T of today started out as SBC, the nation’s smallest Baby Bell from San Antonio, Texas. SBC CEO Ed Whitacre acquired AT&T, BellSouth and Cingular and became one of the two heavy-hitters in wireless and telecom.

Ed Whitacre left AT&T to Randall Stephenson to grow

Then Whitacre retired and handed this new and massive group of companies and industries to Randall Stephenson as the next CEO. AT&T continued to grow and lead the wireless and telecom industry.

In fact, AT&T Mobility was not only the first, but the only carrier to offer the Apple iPhone when it launched. In fact, they had that honor for a few years before it was available from other carriers as well.

That’s when wireless was a voice business compared to today where it is a data business. Back then there were only a few hundred apps. Today apps are counted in the millions. That’s what has happened over the last decade.

AT&T grew into one of the two wireless powerhouses in the United States. Then over recent years, Stephenson started the next major transformative move.

They made several major acquisitions like DirecTV and Time Warner and became the parent company to CNN, Warner Brothers and so much more. They changed the name of this division to Warner Media.

They have introduced AT&T TV and are getting ready to launch a new streaming television service called HBO Max.

Plus, they will bring 5G wireless nationwide by summer.

Randall Stephenson leaving AT&T to John Stankey to grow

Today, AT&T is a much larger and much more powerful competitor in a larger new industry space. Very few companies had the guts to grow like this.

Now Randall Stephenson is handing AT&T to new CEO John Stankey.

Today, AT&T is one of the top two leaders in 5G wireless, telecom and pay TV. And moving forward they will continue to be a leader in pay TV with HBO Max, their new streaming service. This will compete with other new players like Disney+, Apple TV+ and Peacock.

Plus, there are other important services and growth sectors like the AT&T FirstNet network, built for first responders and emergency workers like police, fire, ambulance, health care, and more. This is still building and growing.

Or AT&T Fiber, which so far has reached more than 14 million locations. This too continues to grow.

Today AT&T is a leader in 5G wireless, telecom, AT&T TV, HBO Max and more

That means this new package of companies and services under AT&T’s belt is getting ready to grow once again. The next wave of growth will be led by Stankey and the future potential looks very bright.

Going forward, while there is potential, however ongoing success won’t be a cakewalk. There is still plenty of hard work to do over the next several years by Stankey.

Just as Stephenson worked hard and transformed AT&T from the smallest Baby Bell to one of the two largest wireless and telecom networks in the United States, Stankey has the same opportunity and challenge in front of him with the wireless, telecom, pay TV, communications, news and entertainment businesses of Warner Media.

AT&T is a communications, news and entertainment giant today

Stankey has all the pieces in front of him right now to build AT&T into an even more important and impactful company going forward. Plus, there will be more color to add to this painting as we move forward.

It took several years for Stephenson to blend AT&T, SBC, BellSouth and Cingular. I think it will also take Stankey several years to fully blend AT&T with Warner Media.

While we will have to wait and watch how Stankey does, I have followed him for years and believe he has the right stuff to do just that.

Alexander Graham Bell started AT&T in 1877

Yesterday, all these different sectors were separate. They have been blending for a decade or two and are continuing to do so. Today, a very few companies are leading the charge into this new business space.

AT&T is one of these leading companies. They are now building a powerhouse communications, news and entertainment company that will let them continue to grow for the next decade and beyond.

Then, Stankey may very likely make other acquisitions, expanding AT&T into other powerful industries before handing the company to the next CEO in the long line since Alexander Graham Bell started it in 1877.

So, what will AT&T look like a year from today and going forward? This is a very important question for every investor, worker, competitor and industry watcher to ask.

Expect them to continue to build out their 5G wireless and HBO Max plus many other transformational changes in communications, news and entertainment under Warner Media.

I hope this explanation of who AT&T was, who they are today and who they will become tomorrow helps you better understand both this company and the entire changing industry as well. AT&T has been with us for more than a century, and it is stronger and larger than ever before. And their future potential looks very bright indeed.

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