Who is AT&T owned by?
AT&T Inc. is a registered holding company in America with its operational hub in Dallas, Texas. It is the world’s largest telecommunications company and the second-largest provider of mobile telephone services. Who, in other words, is the brains behind AT&T? Let's take a look.
Origins
The history of AT&T can be traced back to the late 1800s and the work of Alexander Graham Bell. Bell in 1882 formed the Bell Telephone Company that started offering telephone service in some of the major Eastern cities. In the next few decades, Bell Telephone acquired other small telephone companies and grew across the nation.
Bell Telephones in 1907 became part of a single ownership by a company known as AT&T Internet (American Telephone and Telegraph Company). AT&T became the parent company of local Bell operating companies that were offering telephone services throughout the United States.
Breakup and Rebuilding
Until the mid of the twentieth century, AT&T dominated telephone services in the United States. All this changed in 1982 when AT&T was ordered by the government to split into smaller units in an anti-trust measure. Paralleling this historic division we have the formation of the seven “Baby Bells”, which are seven regional telephone organizations derived from the original AT&T.
In the next twenty years, many changes occurred in the telecom industry. It was with new technologies that the clear distinctions between local and long-distance telephone services – or between telecoms and cable companies – started to fade. There were also new giants created through mergers and buyouts like SBC Communications.
In 2005, SBC purchased the original AT&T and took the well-known corporate name. The new post-breakup AT&T then acquired BellSouth in 2006. Thus, through a series of mergers, AT&T was restructured as the primary Baby Bell company regaining full control over their former local divisions.
Current Ownership Structure
The AT&T Inc. of today has evolved into a US$180 Market Capital company that boasts more than one hundred million wireless customers. But who exactly is behind this colossal telecoms empire?
By being a corporation that is listed on the New York Stock Exchange, AT&T has many masters, or shareholders, in the form of its stock owners. However, a few large institutional shareholders and funds own a large percentage of the AT&T shares.
The company’s current largest shareholder is The Vanguard Group, an investment company, which is an indirect owner of AT&T stock with more than 7% of its shares through its various funds. Other large shareholders and managers comprise BlackRock Funds, State Farm Mutual Funds, and Wellington Management Funds. Many tens of millions of other Americans also own shares of AT&T stock indirectly through mutual funds and pensions invested broadly in the economy.
In addition to public stock ownership, AT&T has some critical strategic investment partners and co-owners in specific business areas.
- DIRECTV: In 2015, AT&T bought satellite TV provider DIRECTV in a deal that was considered a record-breaker worth $50 billion. When AT&T acquired DIRECTV, TPG Capital which had invested in the company retained a minority holding in the business.
- WarnerMedia: In the year 2018, AT&T bought TimeWarner which is a media company for $85 billion. It was renamed to WarnerMedia which included brands such as HBO, CNN, and Warner Brothers. To finance this particular deal, AT&T embarked on considerable debt levels.
- Mexico Wireless: In 2015, it acquired a deal with the American Movil company to equally invest and co-own the AT&T Mexico wireless operation. This led to the acquisition of a powerful Latin American associate.
Lastly, as it is evident from the current structure, the public market shareholders and major fund companies hold a significant stake in AT&T today; however, the company has opened its arms to strategic partnerships in its divisions. As technology and media continue to grow more rapidly, do not be amazed if there are more co-owners and stakeholders to be included in the future.
The Scale of AT&T
In summary - after various breakups and mergers spanning 40 years - AT&T stands immense, integrated, and owned by a mix of players.
- Individuals through direct share investments
- Vanguard, Blackrock, and Wellington are some of the prominent large asset management funds.
- Participants of DIRECTV (TPG Capital) and Mexico Wireless (America Movil)
- How the $180B tech & media empire is financed by the long-term debt holders
In all respects, today’s AT&T Inc. might be considered as owning itself as a vast, yet purposely diverse and loosely controlled conglomeration company that reports mainly to millions of dispersed shareholders. It remains a giant now with an integrated position in mobile, Internet, pay-TV, and content categories to address the digital divide and entertainment in the 21st century.
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