AT&T pledged not to seek any headline acquisitions over the next three years, and detailed plans to generate between $5 billion and $10 billion by monetising non-core assets in 2020, as it responded to criticism of its recent strategy.

In a statement, the company said the next three years would see it conduct a “continued disciplined review of portfolio”, with “no major acquisitions”, while its non-core asset plan would add to $14 billion it expects to reap from a similar strategy this year.

It issued the statement alongside its Q3 financials, a period which saw it make significant strides towards the $14 billion target.

Late last week, it struck a deal to sell a majority stake in media unit Central European Media Enterprises for $1.1 billion to private equity company PPF Group, which followed a previous deal to sell fixed and mobile assets in Puerto Rico and US Virgin Islands to Liberty Global for nearly $2 billion.

Board refresh
In addition to the planned divestments, the company said it will continue to refresh its board, as two directors retire over the next 18 months.

It will appoint a new director at its next board meeting, followed by another in 2020. It also expects Randall Stephenson to remain as CEO until at least the end of 2020.

AT&T’s guidance came after its strategy was placed in the spotlight by activist investor Elliott Management, which reportedly demanded sweeping changes after criticising the US operator’s acquisition strategy, performance and long-term ambitions.

The operator defended its acquisition strategy at the time, but conceded it would look at some of the investor’s points.

In its statement today (28 October), Stephenson said it had benefitted from its engagement with Elliott Management, while adding its strategic investments over the last several years “have given us the essential elements to meet growing demand for content and connectivity”.

“Our three year plan delivers both substantial and consistent financial improvements”.

In terms of financials, the company is targeting growth in consolidated revenue of 1 per cent to 2 per cent per year, which it expects to generate EBITDA growth of $6 billion.

Q3 results
In Q3, AT&T’s revenue dipped 2.5 per cent year-on-year to $44.6 billion, impacted by declines in legacy fixed services, its Warner Media division and domestic video. This was partially offset by growth in strategic and managed business services, domestic mobile services and IP broadband.

Net income narrowed from $4.7 billion in Q3 2018 to $3.7 billion, impacted by a loss on benefit plans, merger-related amortisation costs and other integrated related expenses.

Mobile service revenue was up 0.7 per cent to $13.9 billion, with net additions of 255,000 phone subscribers, beating the 239,000 booked by rival Verizon during the quarter.

Numbers from AT&T’s entertainment group were less positive, with a net loss of 1.16 million premium TV subscribers, impacted by “focus on long-term value customer base and carriage disputes”.