As AT&T Inc.’s five-year quest to become a modern media giant comes to an end, it is refocusing on its original mission: being a telecom company.
John Stankey, AT&T Chief Executive Officer, spoke to investors and analysts about rebuilding the company’s “connectivity franchise” — and its brand. This talk comes a week after the company announced a plan to carve out it’s WarnerMedia operations and combine them with Discovery Inc. The effort to rebuild the company’s brand includes investing more heavily in its 5G and fiber-optic networks, as well as improving customer service.
“We’re still, you know, a little obtuse as to what the AT&T brand stands for, and we are about ready to do some things that are going to improve that,” Stankey said during an investment conference Monday, according to Bloomberg.
The company is cutting costs of $1.75 billion to $2 billion annually and that process isn’t over, he added. “We need to fit down this business to be more focused and agile.”
According to Bloomberg, at 12:44 p.m. in New York, on Monday, AT&T shares were down 0.2% to $29.94 and since May 14, the stock is down 7.1%, prior to the announcement of the Discovery deal.
The Discovery deal will unwind an $85 billion Time Warner acquisition that the American telecom company announced in 2016 and completed in 2018 — after overcoming antitrust objections. The deal loaded up AT&T with debt and it struggled to see much payoff from having media and telecom operations under one roof.
Now Stankey is working on slimming down the company. In addition to the Discovery deal, in February, AT&T agreed to offload its DirecTV operations after years of losing satellite-TV customers.
Meanwhile, its core wireless and landline operations have faced a few knocks as the company dropped to No. 3 among the top U.S. wireless carriers after T-Mobile US Inc.’s highly praised and effective acquisition of Sprint Corp. last year. And the company was also criticized for killing its DSL home internet service in October, a decision that left some customers with fewer broadband options.
Stankey said his objective now is to be “the best core connectivity provider.” But how the company does that isn’t yet clear.
Stankey said he is going to brainstorm with top management over the next three days to come up with ways to capitalize on “this connectivity franchise” by finding new businesses or “verticals” to layer on top of the network service.
“It’s time to think about an AT&T that can truly be a scale broadband provider for all customers everywhere in the United States, where it makes sense to do that,” he said.