AT&T reports continued gains following DirecTV deal - Mobile World Live

AT&T reports continued gains following DirecTV deal

27 APR 2016

AT&T saw big gains in profit and revenue driven by its earlier DirecTV acquisition, with head Randall Stephenson stating that “we’re seeing good momentum with our initial integrated wireless, video and broadband offers”.

“And we’ll expand the integrated choices for customers in the fourth quarter when we launch our new video streaming services,” the CEO continued. AT&T is looking to launch an “OTT” video service later this year, to extend the reach of its media services.

The company reported a profit of $3.8 billion for the first quarter, up 16.5 per cent year-on-year, on revenue of $40.54 billion, up 24.4 per cent.

In the company’s conference call, John Stephens, its CFO, noted that the growth came despite lower equipment sales and foreign exchange pressure. Aside from growth via DirecTV, the company also noted upticks in video and IP-based services.

While the company now splits its mobile business between its Business Solutions and Consumer Mobility groups, it still provides a breakdown based along the lines of the former AT&T Mobility business.

On this basis, it saw income from the mobile activities of $5.27 billion, up 12 per cent year-on-year, on revenue of $17.95 billion, down 1.3 per cent. Service revenue of $14.8 billion was essentially flat.

It said that stabilisation in service revenue was due to its migration of subscribers to its Mobile Share Value plans, as well as adding new customers. The company has also shifted away from subsidies, with more than 90 per cent of smartphone sales not on subsidy plans.

The company ended the period with 130.45 million “subscribers and connections”, including 27.76 million which were attributed to “connected devices”. Total net additions for the US during the period stood at 1.8 million, driven by the addition of 1.6 million connected devices.

AT&T also now has 9.2 million wireless customers in Mexico. This unit saw an operating loss of $251 million in the first quarter on revenue of $537 million, as the company invested in operations, networks and subscriber additions.

Stephens also said that the company is on track to reach a run rate of $1.5 billion cost synergies from the DirecTV deal, and is “taking cost out of the business and driving greater savings through efficiency initiatives such as Project Agile, and transforming our network with software”.

This is giving it “financial flexibility” to invest elsewhere, such as in Mexico.

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Steve Costello

Steve works across all of Mobile World Live’s channels and played a lead role in the launch and ongoing success of our apps and devices services. He has been a journalist...More

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