What is next up with AT&T?
The organization has seen significant changes recently to plan and handle developing trends in the telecom industry. Considering that AT&T has been connected to mergers and acquisitions not once but rather what should the telecom behemoth do next?
5G Rollout
At now, AT&T Internet has many strategic objectives One of the main keys is the development of 5G networks. Currently among the main carriers implementing 5G service back in December 2018 and continuously expanding their network is AT&T. 5G should enable innovations and technologies such as virtual and augmented reality, smart cities, self-driving vehicles, and so on quicker it is developed. AT&T plans to invest a lot of money in 5G technology and keep its focus on network expansion in the next years. Based on business projections, by the first half of 2023, it hopes to have a 5G network rolled out throughout the nation.
More Streaming Services
AT&T has also been posturing for a streaming war having launched its streaming service known as WarnerMedia. The recent merger that occurred in 2018 was between AT&T and Time Warner which included famous entertainment brands such as HBO, Warner Bros., and Turner Networks. This set a foundation for HBO Max in 2020, which is the flagship streaming platform of AT&T. As competition in streaming intensifies from Netflix, Disney and Apple, the AT&T entity will not relent in expanding HBO Max’s content offer and subscriber base. Further consolidations of media assets, could also occur as well.
Direct-to-Consumer Focus
As expected from a streaming company, would-be-acquirers claim that AT&T seeks to move closer to establishing a direct relationship with its consumers. That is why one can expect AT&T to focus more on its brand and services to everyday people, in addition to ownership of must-have content properties. This strategy is evident in areas such as the company’s rebranding of its marketing and advertising messages, and remodeling of stores to focus on the experiences that customers can have with the services from AT&T. The ultimate goal is probably to transform AT&T into a lifestyle brand that would define how people’s connected lives are run.
Pay TV Decline
Cable and satellite television, often referenced as pay TV, has been a significant offering of AT&T for a long time. However, with the increased instances of individuals shifting from cable and satellite to online streaming services, pay TV is experiencing a high rate of churn. This is the same for AT&T which has been experiencing a decline in its TV subscribers; it has lost more than 6 million of them since 2018. Satellite TV today constitutes a significant portion of AT&T’s revenue but they are expected to decrease in the future. During the announcement of the quarterly and annual results, the company admitted that pay TV is a ‘declining’ business, and hence, its future emphasis is on the streaming service HBO Max.
Fiber Internet Expansion
To some extent, this trend will continue as AT&T refocuses on a business that is not its pay TV services, while broadband internet is still a crucial component. AT&T has been increasing deployment of service known as 100% fiber that provides internet connection with the high speed of up to 5-Gigs. In 2022, the company plans to deploy fiber to three million more locations in ninety metropolitan areas. As the internet business is particularly prospective for the provision of fiber internet, it will remain an investment focus for AT&T in the future.
More Mergers or Spin-Offs
Since its $US85 billion acquisition of Time Warner in 2018, AT&T has been offloading assets that were acquired earlier, such as DirecTV and gaming divisions. This was done to repay debts that had been incurred in acquisitions and to refine segments such as 5G and Streaming. However, some analysts have opined that the sort of divestitures being exemplified by the spinning off of DirecTV could well be the first step. Some of the strategies of AT&T in its M&A activities include content companies, technology partners, or other telecom providers hence there is a willingness of its leadership to acquire more in the future. This could be true, the constantly changing environment of streaming and the 5G may require such big moves in the future. Another proposal that has been suggested at some stages is the complete divestment of AT&T into two different legal entities – an operational telecoms company and an M&E conglomerate.
So, therefore, we have faster 5G networks, a growing STEAMING PLATFORM, an increased direct-to-consumer subscription strategy, decreasing pay-TV properties, thriving FIBER INTERNET, and probably more M&A OR SPIN OFFS in store for AT&T. The years to come will surely be filled with excitement as AT&T repositions itself to be a leader in the future of connectivity and entertainment.
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