AT&T executives flagged wholesale deals as an opportunity to boost revenue in its wireless segment, as net profit plummeted in the final quarter of 2019 due to heavy losses in its Entertainment and WarnerMedia divisions.
The mobile segment delivered a net increase of 3.6 million connections: 229,000 of this were phone subscribers, a 75 per cent increase year-on-year. But while wireless service revenue increased nearly 2 per cent to $13.9 billion, overall revenue for the Mobility segment was flat at $18.7 billion.
Preparations for a new HBO Max streaming service expected to launch in May weighed on WarnerMedia, dragging revenue down 3 per cent to $8.9 billion. Entertainment division revenue fell 6 per cent to $11.2 billion, as the company’s pay-TV services shed a combined 1.1 million subscribers.
The impact of this was plain: the operator’s net profit dropped 51 per cent to $2.4 billion, on revenue of $46.8 billion, down 2.4 per cent.
On an earnings call, COO John Stankey noted the operator aims to increase its presence in the wholesale market, stating this is “a really important aspect of how we’re going to grow wireless revenues”.
While AT&T’s activity in the wholesale market was historically constrained by spectrum limitations, Stankey said network enhancements completed over the past year and half have put it in prime position to play a larger role.
Potential deals with cable companies are being considered, but Stankey stressed “there’s a lot of other wholesale options out there that we expect to link into and step up into in the most accretive fashion possible”.