MoffettNathanson analyst Craig Moffett warned AT&T’s road to recovery as a pure-play telecom operator could be rocky due to competition in its core mobile sector and a need to modernise fixed-line infrastructure.
But he noted AT&T’s core mobility segment is likely to be a long-term share loser, “notwithstanding its highly promotional stance”.
In the mobile market, T-Mobile US is a rival with “a better network and much lower prices”, while MVNO’s Charter Communications and Comcast are also threats, Moffett wrote.
AT&T mobile subscriber gains are coming “at a very high cost, leaving ARPU stagnant”, he added.
Moffett noted AT&T’s fixed-line consumer unit accounts for 11 per cent of its revenue and is still mostly comprised of copper.
He asserted ambitious fibre plans would do little more than offset copper declines resulting in “low single-digit growth”.
Moffett stated AT&T’s revenue split will be about 66 per cent mobile and 33 per cent fixed, with the majority of the latter coming from enterprise customers.
MoffettNathanson rated AT&T’s stock prospects as neutral, with a price target of $19 per share.Subscribe to our daily newsletter Back