Silicon Investor - AT&T

[Jon Koplik] SpaceX isn’t the wireless threat that investors fear -- unless someone breaks th...

Jon Koplik — 7/27/2026 12:57:23 PM

SpaceX isn’t the wireless threat that investors fear -- unless someone breaks this unspoken agreement.

It would likely be too expensive and time-consuming for SpaceX to build a mobile network on its own. But the major wireless carriers have to hope one of their rivals doesn’t sell out.

By Julian Torres

July 25, 2026

Ever since T-Mobile and Sprint merged in 2020, the U.S. wireless-communications market has operated as a comfortable oligopoly. But lately, investors have worried that Elon Musk’s SpaceX plans to disrupt what’s been a predictable market for telecommunications services.

SpaceX’s Starlink business has so far been a niche provider to rural areas. But the company’s initial-public-offering prospectus in May revealed that Starlink Mobile has ambitions to massively penetrate suburban and urban markets too -- with the goal of providing better connectivity than what can be offered by cell towers on the ground.

Building that sort of network is far easier said than done, requiring a lot of time and a lot of spectrum. And it assumes SpaceX would even want to do the intensive buying and building work itself; its other option would be to strike a deal that allows it to buy network capacity from one of the current major players. Such an agreement would likely spur an industry-wide price war and fierce competition for customers -- the main reason why the biggest three operators have vowed not to ink this sort of partnership.

Executives at the established wireless providers have generally shrugged off the Starlink threat. SpaceX’s direct-to-cell constellation “will never be an effective competitor to a mobile network,” T-Mobile US CFO Peter Osvaldik told MarketWatch earlier this week.

“It’s basically not possible because of physics,” Verizon Communications CEO Dan Schulman added on his company’s Friday earnings call. “It’s very difficult for satellite providers to provide a service even close to what we can provide with our broadband services.”

Still, it’s clear that investors in recent months have felt unsettled. AT&T shares have fallen 8% since the time SpaceX publicly filed its IPO paperwork in May, while shares of Verizon are off 8% in the same span and T-Mobile’s stock is down 10%. SpaceX isn’t the only thorn in the sides of those wireless companies, which also must deal with higher interest rates and fierce pricing competition between carriers. But Morningstar analysts said they suspect that the SpaceX threat has been a major source of the valuation pressure.

Telecoms aren’t scared

There’s a reason the telecommunications business is dominated by a few major players. Effectively competing is expensive, requiring persistent participation in spectrum auctions and constant investments in network competitiveness.

SpaceX’s route to achieving its grand connectivity vision for Starlink is riddled with multibillion-dollar problems and would require decades’ worth of catching up, according to MoffettNathanson analysts. Starlink’s satellite spectrum capacity doesn’t come close to matching ground connectivity speed, their research recently highlighted.

Even after paying $19.6 billion for 65 MHz of spectrum from EchoStar last fall, SpaceX still meaningfully lags behind the big three carriers’ low- and midband capabilities, which MoffettNathanson estimates are still 10 times more than SpaceX’s.

Low-band spectrum travels far and goes through walls easily, but offers slower connectivity. Midband is faster and carries more data, but does not travel as far or go through thick walls as well. Wireless providers need balanced portfolios in order to serve customer needs effectively.

SpaceX would need to spend billions at Federal Communications Commission auctions to acquire spectrum and establish the bands needed for a reliable connection, according to MoffettNathanson. T-Mobile CFO Osvaldik doubts that SpaceX has a credible path to low-band spectrum, since upcoming auctions are focused on mid- and higher-frequency bands.

Operating a satellite-only network, meanwhile, would come with geographic and signal constraints. The signal from a satellite in low-Earth orbit is about 48,400 times weaker than the signal from a ground tower located one mile away, before accounting for crucial obstacles like ceilings or walls, MoffettNathanson’s research indicated.

These limitations are why large carriers have actually been willing to partner with Starlink or rival AST SpaceMobile, viewing their direct-to-device satellite mobile services as a niche complement to existing terrestrial coverage. T-Mobile partnered with Starlink in February 2025 to offer these capabilities to its subscribers, but the company says it’s seen little usage outside of national parks.

This summer, T-Mobile’s satellite usage represented just 0.0003% of total network usage, according to Osvaldik, who said it would drop even further as colder seasons progressed.

“We just fundamentally understand they’ll never be a substitute product,” he said.

A quicker way to gain stature in the wireless market would be to merge with one of the big three providers. But experts say that’s a less plausible option, as any such combination would face regulatory and financial hurdles.

One big caveat

Moffett Nathanson analysts said that each of the three major wireless companies have to trust that their rivals won’t agree to let Starlink partner with them as a mobile virtual network operator, or MVNO.

That refers to a model whereby companies can rent network capacity from established providers and sell wireless plans under their own brands. It’s how budget carriers like Consumer Cellular can pass cost savings on to their customers by foregoing large-scale infrastructure buildouts.

If Space X were to strike an agreement with one of the major wireless networks, it would suddenly be able to offer customers terrestrial coverage and overcome the major roadblock keeping it from competing effectively in the U.S. wireless market.

For that reason, the three big providers seem to have an unspoken agreement to prevent disruption: Never give Starlink an MVNO deal. Executives at each of those companies clearly indicated in May that they had no intention of granting Starlink this sort of arrangement.

Verizon has already learned the pain of letting cable competitors rent out network capacity, after it signed MVNO agreements with Comcast and Charter Communications in 2011. Those companies then went on to launch their own wireless brands, undercutting Verizon on pricing and gaining market share.

SpaceX’s position creates a classic prisoner’s dilemma among the big carriers, noted Julie Zhu, a senior research associate at MoffettNathanson. She told MarketWatch that if a mobile-network operator were to crack and sign an MVNO agreement with SpaceX, the entire industry would lose out from letting an aggressive competitor come in and dramatically lower the bar on pricing. The partnering company would lose too, Zhu noted -- just perhaps not quite as much.

Telecommunications investors likely wouldn’t take kindly to a SpaceX MVNO partnership, further lowering the odds of this sort of deal, Moffett Nathanson said.

While the big three providers have signaled that they don’t want to do business with SpaceX in this capacity, that won’t necessarily stop Musk’s company from trying to force their hands.

One way SpaceX could attempt this is by using its “deep pockets” to make expensive bids at FCC spectrum auctions, according to a Morningstar report. The company could get aggressive at these auctions by not only collecting spectrum as a potential bargaining chip, but also by bidding up prices and raising the cost of business for its rivals, Zhu noted.

Whether that strategy would pay off is still an open question. It’s tough to say if SpaceX will amass enough spectrum that it becomes attractive to one of the big network carriers as they consider their future bandwidth needs.

But regardless of SpaceX’s viability as a mobile competitor, wireless investors may still worry about when the next shoe will drop with a notoriously volatile company.

Wolfe Research analyst Peter Supino suggested as much when he upgraded AT&T’s stock to overweight earlier this week.

“Yes, Starlink may bully its way into mobility, but it would take years to acquire and clear the right spectrum,” he wrote. “Unless Starlink behaves very aggressively, the Big 3 will probably not provide an MVNO.”

Yet Supino added that he now values AT&T’s stock at an earnings multiple “below historic averages to reflect a stubborn Starlink overhang.”

marketwatch.com

.
.
.

[Jon Koplik] Reuters -- new idea : SpaceX may ruin Verizon, AT&T, T-Mobile .....................

Jon Koplik — 6/3/2026 1:54:25 PM

Reuters -- new idea : SpaceX may ruin Verizon, AT&T, T-Mobile ..........................

Reuters

June 3, 2026

SpaceX will disrupt $1.6 trillion US communications industry, Oppenheimer says

By Kanchana Chakravarty

June 3 (Reuters) -- SpaceX will disrupt the $1.6 trillion U.S. communications industry as the Elon Musk-led company’s satellite broadband unit Starlink expands, Oppenheimer said in a note on Wednesday, adding that legacy broadband providers like AT&T may be most at risk.

The brokerage raised its estimate for 2035 space revenue to $800 billion from $500 billion earlier, ahead of the company’s highly anticipated IPO this month.

• The expansion of Starlink is expected to further pressure cable firms, which are already losing subscribers.

• Oppenheimer said companies such as AT&T, Verizon Communications, and T-Mobile could see faster declines in subscribers and revenue going forward.

• The brokerage expects Starlink to "entrench itself in many critical applications, reducing churn and increasing pricing power."

• Oppenheimer raised its 2030 estimates for U.S. broadband subscribers to 15 million from 10 million earlier.

• SpaceX’s rise could also tap into the half-a-trillion-dollar handset market as the company aims to replace smartphones, Oppenheimer said.

• "Should SpaceX execute on its mission...it will be the modern-day East India Company of space, controlling routes, infrastructure, and commerce of an entire frontier and giving it a quasi-sovereign reach, far beyond that of any ordinary corporation," Oppenheimer said.

• The company is set to debut on the Nasdaq on June 12 and is aiming to reach a $1.75 trillion valuation in the IPO, Reuters has reported.

• SpaceX’s valuation is grounded in Starlink, which has over 10 million subscribers, and a launch business that analysts and investors say has transformed access to orbit.

© 2026 Reuters.

.
.
.

[Sr K] The directors listed for the AT&T vote include Marissa A. Mayer.

Sr K — 4/8/2024 3:23:17 PM

[Sr K] New CNN Boss Shakes Up News Operations, Explores Digital Subscription Model One...

Sr K — 1/17/2024 4:11:10 PM

New CNN Boss Shakes Up News Operations, Explores Digital Subscription Model

One combined unit will serve TV, streaming and digital platforms, while a new division will explore growth opportunities

By
Isabella Simonetti
Updated Jan. 17, 2024 11:03 am ET

Share

Resize

Listen
(7 min)

Mark Thompson is looking to monetize CNN’s offerings, potentially through subscriptions. PHOTO: SANJIT DAS/BLOOMBERG NEWS
Will people pay to watch CNN videos on their phones? New CNN boss Mark Thompson seems eager to test that idea.

When he took over as the network’s chief executive in October, Thompson warned staff that CNN was nowhere near ready for the future and needed to step up its digital game. One hundred days later, he is laying the groundwork to do that.

Exc.

[Sr K] Re: Ericsson AT&T Snubs Nokia and Strikes $14 Billion Supplier Deal With Ericss...

Sr K — 12/5/2023 3:24:35 PM

Re: Ericsson

AT&T Snubs Nokia and Strikes $14 Billion Supplier Deal With Ericsson

Telecom giant’s move to replace existing equipment with open-standards gear deals blow to Finnish company’s stock

By
Drew FitzGerald
and
Dominic Chopping
Updated Dec. 5, 2023 9:48 am ET

Share

Resize

Listen
(4 min)

AT&T said its shift to Ericsson will fast-track its network overhaul and allow it to buy hardware and software from a broader range of suppliers in future years. PHOTO: PATRICK T. FALLON/AGENCE FRANCE-PRESSE/GETTY IMAGES

AT&T struck a deal with Ericsson to buy up to $14 billion of its hardware and services after the Swedish equipment supplier pledged to open up its software to competing systems.

The five-year agreement would move virtually all of AT&T’s new purchases of certain cell-tower equipment to Ericsson, replacing existing machinery from Finnish rival Nokia in many markets.

Exc.

[Bill] Here we go again.

Bill — 10/19/2023 7:14:02 PM

[Sr K] FCC Revives ‘Net Neutrality,’ Proposes New Regulations for Internet Service. C...

Sr K — 10/19/2023 4:40:20 PM

FCC Revives ‘Net Neutrality,’ Proposes New Regulations for Internet Service.

Comcast, Charter, AT&T and other telecom giants are expected to wage a legal fight with Democratic-controlled agency over regulatory push
By
Ryan Tracy
Oct. 19, 2023 1:08 pm ET

Share

Resize

Listen
(6 min)

FCC Chairwoman Jessica Rosenworcel says Internet service has become as essential as electricity and deserves stricter government oversight. PHOTO: TOM WILLIAMS/CQ ROLL CALL/ZUMA PRESS
WASHINGTON—The Federal Communications Commission proposed to apply utility-like regulations to America’s internet service providers, a policy change expected to raise costs for Comcast, Charter Communications, AT&T and other blue-chip companies.

The proposal, adopted by the agency’s Democratic majority Thursday in a 3-2 party line vote, opened another chapter of a long-running dispute about how Washington should oversee internet service. At stake: Whether the FCC will expand its power to regulate some of the largest U.S. companies providing a service that has become essential to modern life.

Exc.

[Sr K] Why Verizon, AT&T and T-Mobile Want to Access Your Bank Account And what you ne...

Sr K — 8/30/2023 11:18:26 AM

Why Verizon, AT&T and T-Mobile Want to Access Your Bank Account

And what you need to know before accepting the discount they are offering in return

By

Shara Tibken

Aug. 30, 2023 10:07 am ET

Share

Resize

AT&T offers a $10-a-line monthly discount for customers who automatically pay their paperless bills with a debit card or bank account. PHOTO: JEENAH MOON/BLOOMBERG

Wireless carriers want to give you a monthly discount. You just have to pay them with your bank account.

Exc.

[Jon Koplik] most interesting reader comment ( I thought ) .....................................

Jon Koplik — 7/22/2023 2:18:56 PM

most interesting reader comment ( I thought ) .......................................................................

Henry Kolpin
19 July, 2023

As a former chemical plant employee and purchaser of chemically resistant materials. I can say that every location of the lead shielded cables can be different. The fear of lead leaching into water, soil and air could well be different for every location. As crazy as it sounds lead in Lake Tahoe may be perfectly safe and the lead in the rivers and swamps of the south could be very dangerous due to those variations of conditions, water PH, temperature, etc. etc. and a variation of the lead manufacturers composition of shielding could also be a factor. So right now there is no clear answer.

A complete study and case by case review needs to be done just as ATT says.

Everything could turn out to be perfectly safe, so lets do the science.
Reply
58
1
Share

.
.
.

[Jon Koplik] Barrons / reader comments / re : AT&T and Verizon’s Dividends .....................

Jon Koplik — 7/22/2023 2:16:29 PM

Barrons / reader comments / re : AT&T and Verizon’s Dividends ...........................................................

Sort by
Newest

Manning Outen
5 minutes ago

I agree, nice dividend and cash flow. Buy V. Lead wire is coating is not in water or friable
Reply
Share
Nick Politakis
37 minutes ago

Both T and VZ are awful investments and the reason is they are in a no growth business that generates a lot of cash. I wish Apple or Microsoft would acquire them both and put the out of their misery.
Reply
Share
Katherine Delorenzo
45 minutes ago

A few points:

This is a problem with a long timeframe toward resolution. Company response aside, the potential for health-related lawsuits, congressional action, etc will likely hang around for a couple of decades. Other companies (JNJ, 3M, etc are useful examples).

A company that has already cut a dividend is generally viewed as more likely to do so again, regardless of reassurance.

Current leadership is still cleaning up the cost of past poor management mistakes.

The stock may look like a good deal for opportunistic investors and a value trap for longs, but those holding at a loss are likely to see it as a TLH candidate before year's end.
Reply
Share
Nils Wessell
2 hours ago

From $43 stock in 1999 to $14 in 2023. What's not to like about T's management.
Reply
2
Share
ANGELO KOKENAKIS
3 hours ago

In 1999 T was a 50 dollar stock. Dead money since 1999.
Reply
Share
George Chimento
16 hours ago

Every basis point of dividend cut will cause the stock to appreciate by much more. Management compensation is tied to stock price and they probably get new grants every year. Repricing by a compliant Board also likely in order to "retain talent." The dividends will be cut. Count on it.
Reply
Share
Gregory McCulley
16 hours ago

My advice after the WSJ article came out was to buy VZ and not eat lead wrapped cable, which I followed.
Reply
1
Share
Nils Wessell
2 hours ago

LOL
Reply
Share
David Walker
19 hours ago

Make sure to remember the analysts cited in the article jumping on board

with no hesitation for an immediate downgrade for both telecoms based on

lead cable liability ..Cusick, Rollins and Heger ... check back how well they

did a year from now... if you have investments with their respective firms .. or

are just curious
Reply
Share
Patrick Frank
2 days ago

Try my math. There are four prominent 8% out there: T, VZ, BTI, MO. Consider them as a group and make equal weight investments in them, as large or as small as you have stomach for. I like the idea of either 1% or .5% of your portfolio. That means either 2% or 4% of your portfolio is drawing over 8%. Consider: 1) all dividends are covered by cash flow. 2) Each board is well aware the market price of their stock is tied to the dividend. 3) there is no immediate risk of cut for any of them.

Riskless risk. Better than a junk bond, because none of them is going to zero.
Reply
12
Share
Timothy Mortimer
2 days ago

I would think that T and VZ mgmt would do everything they could do to spread-out the costs of remediation so that the companies' dividends aren't seriously threatened. Since the companies' dividends are relatively so high, and their growth prospects relatively so low, their mgmt surely understands that the dividends are the primary reason for the market's demand for the stocks -- and, therefore, any serious cut in dividends would really tank the stocks. Therefore, mgmt is surely loath to cut the dividends (...any further than they've already been cut, that is).
Reply
2
Share
George WEHRLIN
2 days ago

If all these Cash flow etc type numbers are so wonderful.... Why was the stock selling so cheap prior to this lead issue??
Reply
1
Share
Timothy Mortimer
2 days ago

Ans: Relatively meager prospective growth in a stock market obsesses with growth?
Reply
1
Share
Philip Reed
2 days ago

This is not nuclear waste, it is very tradable copper and lead. Put a containment sleeve on the ancient cable as it is rolled up and take it to local metal recycle facility.
Reply
5
Share
David Abel
19 July, 2023

AT&T shares having one of their best days in some time.
Reply
1
Share
Stanley Davis
19 July, 2023

Did anyone take into consideration that all of the "toxic lead" in telephone cables would still be leaching into our soil, ground water, rivers and lakes if the lead ore had remained in the ground locations they were taken from?
Reply
3
1
Share
Dan Laramie
19 July, 2023

It's a lead-pipe-cinch that all of those medical ailments will be blamed on the lead. Its not just getting the lead out you're betting on, it's also the health effects that it is accused of. Most of us had mercury, in our teeth, which is well known to cause insanity (how would we know?), just ask the Mad Hatter. But the dentists quietly ground it out, and flushed it down the drain, into the water table. Nobody was held responsible because nobody had deep pockets, like AT&T does. So you're not betting on the health effects, you're betting on what the courts will decide, and if anybody is going to lose, its the one with the most money, who put the cables there in the first place. Here in California we are trying to decide whether to pay the ancestors of the slaves we never had, and we just might. So I wouldn't bet against T paying for the lead poisoning, because they can.
Reply
13
2
Share
Rich Dobson
19 July, 2023

VZ and T already have concerns about growth, due to competition. This is just another thing to worry about. I would want to know first where the growth is going to come from. The competitive landscape is changing and that is a negative for them. I would study it all very closely before going in.
Reply
2
Share
Leonard Pham
19 July, 2023

Another risk could be class action lawsuits. I wonder if the calculations above take into account the potential for future settlements with plaintiffs.
Reply
2
Share
1 reply
Bill Lyerly
19 July, 2023

This might make it harder for these companies to upgrade their networks and offer services in the future?
Reply
3
Share
Henry Kolpin
19 July, 2023

As a former chemical plant employee and purchaser of chemically resistant materials. I can say that every location of the lead shielded cables can be different. The fear of lead leaching into water, soil and air could well be different for every location. As crazy as it sounds lead in Lake Tahoe may be perfectly safe and the lead in the rivers and swamps of the south could be very dangerous due to those variations of conditions, water PH, temperature, etc. etc. and a variation of the lead manufacturers composition of shielding could also be a factor. So right now there is no clear answer.

A complete study and case by case review needs to be done just as ATT says.

Everything could turn out to be perfectly safe, so lets do the science.
Reply
58
1
Share
Frank Anderson
19 hours ago

What is your best "guess?"
Reply
Share
Ernest Montague
19 July, 2023

I agree with doing the science, but "Everything could be safe is a trope." There are problems, how big they are remains to be seen.
Reply
1
Share
Dan H
19 July, 2023

Thank you.
Reply
Share
Edward Winslow
19 July, 2023

Somebody is certainly short both T and VZ.

No doubt someone got wind of this WSJ article prior to publishing and made a fortune by shorting.

At some point the shorts will have to cover.

Maybe it's me, but it sure seems like more often than not Wall Street analysts lower their rating near the stock bottom and increase their rating near the top.

Could part of their compensation be based on stock price performance vis a vie their opinion and rating???

Of course.
Reply
13
Share
MIKE DIMASE
2 days ago

So true, so true! In the last couple of years Barron's recommendations have followed the same path. A stock will get recommended at its 1, 3, and I've even seen 5 year high. Ridiculous!
Reply
Share
Ronald Schipper
19 July, 2023

This is why no one can trust WS
Reply
4
2
Share
Gary Leonard
19 July, 2023

How many stocks are at a 30 year low? T is. The dividend has already been cut.

Why even bother with this stock?
Reply
10
4
Share
Warren Rossenberg
19 July, 2023

From legal point of view, the costs of potential damages caused by the Bell Comp. will share the successor company and the US Government because at that time the lead cables were considered safe.
Reply
13
Share
----------------------------

END.

.
.
.

[Jon Koplik] Barrons -- Are AT&T and Verizon’s Dividends Safe ? What the Math Says .............

Jon Koplik — 7/22/2023 2:13:14 PM

Barrons -- Are AT&T and Verizon’s Dividends Safe ? What the Math Says ........................

Barrons

July 19, 2023

DIVIDENDS
INCOME INVESTING

Are AT&T and Verizon’s Dividends Safe? What the Math Says.

By Al Root

Just when you thought it couldn’t get any worse for AT&T and Verizon Communications, shares of the two telecom titans have been hammered in recent days after The Wall Street Journal reported on copper telecommunications cables that had been wrapped in lead. Though it didn’t contain any numbers, it warned about the potential health impact of the decades-old wires and the potential costs to clean them up.

AT&T shares (ticker: T) are off 13% since the article ran on July 9, and Verizon stock (VZ) is down about 10%. The S&P 500 index has gained 3% over the same span. The drop has sent the dividend yields of both stocks soaring, with AT&T and Verizon now yielding 8.3% and 8.1%, respectively. Those are attractive dividends -- if they are safe.

At the risk of sounding Panglossian, they just might be. The market is taking a sell-first-and-ask-questions-later approach to AT&T and Verizon shares. Yet the math shows that both companies have the cash flow to support their payouts. For income investors with a strong stomach, they might just be worth taking a flier on.

Of course, doing the math requires numbers, and that’s where the uncertainty starts. Lead-wrapped cables aren’t a new issue -- the industry phased them out decades ago. The cables are actually so old that it’s unclear even where they are located and who owns them. “So how big a deal is this?” asked MoffettNathanson analyst Craig Moffett in a Monday report. “The unsatisfying, but honest, answer is that at this point we have nothing but unknowns to work with and no real way to quantify the companies’ exposures.”

Other analysts felt similarly -- and turned their concerns into actions. J.P. Morgan analyst Philip Cusick downgraded AT&T stock on July 14, despite a “record-low valuation,” citing slowing growth as well as the “overhang from potential lead liability.” Citigroup analyst Michael Rollins downgraded AT&T shares on Monday for similar reasons. Verizon stock also caught a downgrade Monday from Edward Jones analyst David Heger.

New Street Research analyst Jonathan Chaplin took a stab at quantifying the potential liability. He came up with a framework that tried to capture the unknown both in terms of the percentage of cables that will need to be remediated and the cost of replacing them. His estimated total? $60 billion, with AT&T accounting for $35 billion of that and Verizon on the hook for $8 billion.

If AT&T were forced to borrow $35 billion right now and put it in a trust for lead remediation, it would result in its debt going from roughly $160 billion to $195 billion. Debt to Ebitda -- short for earnings before interest, taxes, depreciation, and amortization -- would rise from a manageable 3.4 times to a more concerning 4.3 times. At a rate of 6%, a little higher than where AT&T bonds yield today, the extra debt might add $2.1 billion in interest expense a year, bringing the total debt service to $8.3 billion annually.

The good news: AT&T is expected to produce $17 billion in free cash flow a year over the next three years, according to Wall Street estimates. Subtract the $2.1 billion in incremental debt services, and the $8 billion in annual dividend payments would consume a manageable 53% of expected free cash flow and 50% of adjusted net income, below the 80% that would be considered a payout is at risk. It wouldn’t be easy, but it looks like AT&T could handle a liability of as much as $40 billion.

“This doesn’t sink the boat on its own, though ... AT&T would have at least five years to do it,” says New Street’s Chaplin. “If they can keep cash flows steady, they can do this without cutting the dividend.”

The same calculations using Chaplin’s numbers for Verizon lead to similar conclusions. Verizon would have to take on roughly $9 billion in debt, leading to an extra $500 million in interest and annual debt service of roughly $4.2 billion. Free cash flow is expected to be almost $19 billion a year for the coming three years. Dividend payments of about $11 billion would consume around 60% of Wall Street’s adjusted average free cash flow projected for the coming few years.

That isn’t to say there aren’t risks. The cost to handle the lead-covered wires could be higher than these estimates. Free-cash-flow estimates could also prove to be too high due to increased competition, something J.P. Morgan’s Cusick fears. Still, free cash has held up during prior ups and downs. At AT&T, free cash flow has covered the dividend in 18 of the past 20 years, with payments consuming roughly half of free cash over that period.

All this is theoretical, and it can be hard -- a bad idea, even -- to argue with the market. Still, AT&T and Verizon stocks are getting close to the point where they look to reflect all the potential losses and then some.

The more they fall, the more attractive they will be.

Write to Al Root at allen.root@dowjones.com

Copyright © 2023 Dow Jones & Company, Inc.

.
.
.

[Investor2] AT&T might spend $4 billion replacing lead cables, analysts estimate (yahoo.com)

Investor2 — 7/19/2023 6:22:12 PM

[robert b furman] Without a clue. I think it darn sure would if we were doing it. LOL Bob

robert b furman — 7/18/2023 10:04:40 PM

[Jon Koplik] maybe : removing & replacing dirt costs a bit more (?)

Jon Koplik — 7/18/2023 9:59:10 AM

[robert b furman] Hi Jon, TDS first to detail size of the supposed "ISSUE": TDS Telecommunicatio...

robert b furman — 7/18/2023 7:14:58 AM

Hi Jon,

TDS first to detail size of the supposed "ISSUE":

TDS Telecommunications identifies 10 miles of lead covered cables in its U.S. network

Jul. 17, 2023 5:57 PM ET Telephone and Data Systems, Inc. (TDS) T, VZBy: Vansh Agarwal, SA News Editor 44 Comments

primeimages/E+ via Getty Images

TDS Telecommunications, a unit of Telephone and Data Systems (NYSE: TDS), said on Monday that it had located about 10 miles of lead covered cables in its network across the United States.

The unit of the U.S. regional phone company said that it was identifying steps to address the lead cabling in its network.

If it can be replaced at 4,000 per mile, it is a a $40,000 problem to fix.

WSJ kicking on telcos when they are down on their knees.

Sounds like the shorts were covering on a trumped up story.

One thing for sure, Telcos were a bargain yesterday.

Bob

[Jon Koplik] WSJ -- Telecom stocks continue slide after WSJ investigation into toxic lead cab...

Jon Koplik — 7/18/2023 2:10:06 AM

WSJ -- Telecom stocks continue slide after WSJ investigation into toxic lead cables ...................................

WSJ

July 17, 2023

AT&T Shares Fall to Lowest Price Since 1993

Telecom stocks continue slide after WSJ investigation into toxic lead cables

By Hannah Miao

Shares of AT&T dropped to their lowest closing price in three decades, extending recent losses after a Wall Street Journal investigation into toxic lead cables left behind by telecommunications companies.

AT&T’s stock fell 6.7% on Monday to $13.53 a share, its lowest close since February 1993. Shares have declined 13% since the investigation published July 9 revealed how telecom companies like AT&T have left behind more than 2,000 old lead-encased cables across the U.S., relics of the old Bell System’s regional telephone network.

Journal testing found numerous cables leaching lead into soil and water at levels exceeding regulatory safety guidelines. Wall Street analysts have since raised questions about liabilities related to the cables and the potential impact on companies’ bottom lines. Some firms have downgraded their ratings on some telecom stocks.

“It’s really the fear of the unknown,” said Frank Louthan IV, a managing director and telecommunications-services analyst at Raymond James. “It’s very difficult to quantify how much of this network is out there. It’s difficult to quantify the cost. It’s difficult to quantify the liability.”

Shares of Verizon Communications pulled back 7.5% on Monday, their worst one-day performance since October 2008, and closed at their lowest level since September 2010. Verizon was the worst-performing stock in the Dow Jones Industrial Average.

Frontier Communications Parent, which owns networks acquired from legacy Bell companies, dropped 16%. Lumen Technologies, another telecom company with Bell assets, shed 8.1%.

AT&T previously said the Journal’s reporting on potential harm connected to lead cables “conflicts not only with what independent experts and long-standing science have stated about the safety of lead-clad telecom cables but also our own testing.”

AT&T, Verizon, Frontier and Lumen together have lost about $36 billion in market value since the publication of the WSJ investigation, according to Dow Jones Market Data.

AT&T didn’t immediately respond to requests for comment about the share slide. A Verizon spokesman said in an email the company has been modernizing its network for two decades and only a small percentage of the existing network currently includes lead-sheathed cable. Verizon has started its own testing of several sites and is “taking these concerns regarding lead-sheathed cables very seriously,” he said.

“We have not seen, nor have regulators identified, evidence that legacy lead-sheathed telecom cables are a leading cause of lead exposure or the cause of a public health issue,” a spokesperson for industry group USTelecom said. “Many considerations go into determining whether legacy lead-sheathed telecom cables should be removed or should be left in place.”

Wall Street downgrades in the sector continued Monday, as analysts at Citigroup on Monday reduced their ratings on AT&T, Frontier and Telephone and Data Systems to “neutral/high risk” while remaining “neutral” on Verizon.

“The industry’s historical use of lead sheathed cabling is likely to remain an overhang for the stocks and valuation for at least a few months and potentially longer until the market can better measure the financial risk,” Citigroup analyst Michael Rollins wrote in a report.

New Street Research last week estimated removing all lead-cased copper wires across the U.S. could cost as much as $59 billion.

Raymond James’s Louthan said he believes the costs for removing lead cables are lower than some other projections on Wall Street. He estimates the cost per mile of cable would be around $4,000, factoring in environmental remediation.

The telecom companies are set to report quarterly results in the coming weeks, with analysts and investors expecting to hear from corporate management in the aftermath of the Journal investigation. Verizon and AT&T are due to report earnings next week, while Lumen and Frontier are slated for the week following.

“The carriers have not made much of a statement, unfortunately. Hopefully, they will correct this on their earnings calls next week and be able to get investors some color on what the exposure is from a network perspective,” Louthan said.

Write to Hannah Miao at hannah.miao@wsj.com

Copyright © 2023 Dow Jones & Company, Inc.

.
.
.

[accountant] Reuters Shares of Verizon Communications Inc, AT&T Inc and T-Mobile US Inc decl...

accountant — 6/4/2023 11:23:31 AM

Reuters

Shares of Verizon Communications Inc, AT&T Inc and T-Mobile US Inc declined after a report said Amazon.com Inc was in talks with the U.S. telecoms to offer low-cost wireless services to its Prime members.

Verizon slid 3.2%, while AT&T and T-Mobile declined 3.8% and 5.6%, respectively; Amazon gained 1.2%.

[accountant] T Article on another board Message 34161278 Hope the link works

accountant — 1/23/2023 7:55:25 PM

[Sr K] HBO Max Comes Back to Amazon’s Platform After Yearlong Absence Streaming servic...

Sr K — 12/6/2022 9:42:27 AM

HBO Max Comes Back to Amazon’s Platform After Yearlong Absence

Streaming service to be available on Amazon Prime Video Channels as parent looks to increase revenue

[Sr K] AT&T posts strong day after reporting sales trends for q3.

Sr K — 10/21/2022 4:22:19 AM

[accountant] AT&T posts 2.5% rise in quarterly core wireless revenue (Reuters) -AT&T Inc on ...

accountant — 4/21/2022 8:54:26 AM

AT&T posts 2.5% rise in quarterly core wireless revenue

(Reuters) -AT&T Inc on Thursday posted a 2.5% rise in core wireless revenue for the first quarter, as the telecom giant benefited from the expansion of its fiber internet and 5G services.

The Dallas, Texas-based firm - whose WarnerMedia unit completed its merger with Discovery Inc earlier this month to form the new media firm Warner Bros. Discovery - added 691,000 monthly phone subscribers during the quarter.

AT&T is refocusing on its original business of providing internet and phone services after unwinding a years-long effort to become a media and entertainment company.

Shares of AT&T rose 1.5% to $19.73 in premarket trading.

The company's revenue for the core wireless business rose to $29.7 billion in the first quarter from $29 billion a year earlier.

Total revenue, however, was down more than 13%, reflecting the impact of its divested satellite TV business and weakness in its business wireline unit.

Total global subscribers for premium TV channel HBO and streaming service HBO Max, which are part of WarnerMedia, rose by 3 million from the previous quarter.

Net income attributable to common stock fell to $4.8 billion, or 65 cents per share, from $7.5 billion, or $1.02 per share a year earlier.

(Reporting by Sonia Cheema and Eva Mathews in Bengaluru and Sheila Dang in Dallas; Editing by Anil D'Silva and Bernadette Baum)

[Sr K] Discovery Inc NASDAQ: WBD [graphic] Overview News Compare Financials 24.78...

Sr K — 4/11/2022 10:54:14 PM

Discovery Inc
NASDAQ: WBD

Overview

News

Compare

Financials

24.78 USD +0.31 (1.27%) today

[Sr K] AT&T Shares Climb After Warner Bros. Discovery Deal The telecom company’s stock...

Sr K — 4/11/2022 10:47:54 PM

AT&T Shares Climb After Warner Bros. Discovery Deal

The telecom company’s stock rose in the first trading session after it completed a deal to merge its media business with Discovery.

[Investor2] I'll keep an eye on them; thanks. I'm going to miss those nice dividends! Best...

Investor2 — 3/27/2022 6:44:44 PM

I'll keep an eye on them; thanks.

I'm going to miss those nice dividends!

Best wishes,

I2

[robert b furman] Hi Investor2, First clue will be watching your cost basis on your brokers platf...

robert b furman — 3/27/2022 12:52:38 AM

Hi Investor2,

First clue will be watching your cost basis on your brokers platform.

I have TDA and they've been spot on with my shares.

Bob

[Investor2] A little confusing. How hard is this going to be to calculate my cost basis in ...

Investor2 — 3/26/2022 9:30:43 PM

A little confusing. How hard is this going to be to calculate my cost basis in AT&T and the new entities?

Thanks for the post.

I2

[accountant] AT&T provides details on WarnerMedia transaction, expects to close deal in April...

accountant — 3/26/2022 4:11:30 PM

AT&T provides details on WarnerMedia transaction, expects to close deal in April
Briefing.com - 4:54 PM ET, 03/25/2022

Co announces it has declared a stock dividend to effect the spin-off of 100% of AT&T's interest in WarnerMedia to AT&T's shareholders. The record date for the stock dividend is the close on April 5. This stock dividend is in connection with the previously announced transaction to combine AT&T's WarnerMedia business with Discovery (DISCA, DISCB, DISCK). On the closing date of the transaction, anticipated to be in April, AT&T shareholders will receive an estimated 0.24 shares of stock in Warner Bros. Discovery (WBD) for each share of AT&T common stock. AT&T shareholders as of the stock dividend record date will be entitled to receive shares of WarnerMedia Spinco common stock, representing 100% of AT&T's interest in WarnerMedia. Immediately following this spin-off, the WarnerMedia Spinco shares will be exchanged for stock representing 71% of the new WBD on a fully diluted basis. Two-Way trading for AT&T stock expected to begin on April 4. AT&T declares Q2 dividend of $0.2775/sh.

[Jon Koplik] Variety -- AT&T / Timeline of WarnerMedia’s Road to Discovery Spinoff Deal ........

Jon Koplik — 3/12/2022 2:59:07 AM

Variety -- AT&T / Timeline of WarnerMedia’s Road to Discovery Spinoff Deal ..................................

Mar 11, 2022

AT&T’s Short, Bumpy Ride in Hollywood: Timeline of WarnerMedia’s Road to Discovery Spinoff Deal

By Jennifer Maas

WarnerMedia has been owned by telco giant AT&T for less than four years and it will soon have a new parent company likely by the end of next month.

Discovery’s shareholder vote on the acquisition of WarnerMedia is set for today during a special meeting of stockholders at 10 a.m. ET. The deal is expected to get an easy thumbs-up given the approval already bestowed by Discovery’s oldest and most influential holders, investor John Malone and Advance/Newhouse Co. Both agreed to convert long-held preferred shares into common shares in order to smooth the path for the spinoff combination.

As Discovery conducts a mostly ceremonial poll of shareholders, AT&T is signaling the start of a new chapter. The telco giant will conduct a virtual investor conference at the exact same time as the vote to unveil its post-spinoff strategy. The push into entertainment was initiated by the previous regime led by former AT&T chairman-CEO Randall Stephenson. His successor, John Stankey, has been cleaning up the debt and destruction ever since.

Stankey has hedged his bets in unloading WarnerMedia with a deal that hands control to the Discovery camp but leaves his shareholders with 71% of the enlarged company.

Nonetheless, AT&T’s short but eventful stewardship of Warner Bros., HBO, CNN and the Turner networks is nigh. Here’s a look back at key moments during AT&T’s bumpy ride in Hollywood.

2016

Oct. 20 The first report surfaces, in the Wall Street Journal, that AT&T is in advanced talks to acquire Time Warner.

Oct. 22 AT&T unveils an agreement to acquire Time Warner for $85.4 billion.

Nov. 9 Republican presidential candidate Donald Trump, who repeatedly criticized CNN and vowed to block AT&T’s acquisition, is elected president of the United States.

2017

Feb. 15 Time Warner shareholders approve the merger with AT&T.

Feb. 28 FCC chairman Ajit Pai refuses to review the AT&T-Time Warner merger, passing the decision to the Department of Justice.

Nov. 8 AT&T CEO Randall Stephenson and Makan Delrahim, head of the Justice Department’s antitrust division, meet to discuss recommendations for AT&T to divest DirecTV or Turner Broadcasting to assuage antitrust concerns.

Nov. 20 The Justice Department files a lawsuit to block the AT&T-Time Warner acquisition. The feds say the deal would “greatly harm American consumers.” AT&T blasts the Trump administration for its “radical and inexplicable departure from decades of antitrust precedent.”

Dec. 22 Shareholders vote to extend the merger agreement deadline to June 21, 2018.

2018

March 19 The antitrust trial begins before U.S. District Court Judge Richard Leon in Washington, D.C.

April 18 Time Warner CEO Jeff Bewkes testifies, disputing the business case for the government’s thesis that the enlarged company would withhold its content from rival distributors. “We want to be on all platforms. We want to be in every bundle, everywhere,” he tells Judge Leon.

April 19 AT&T’s Stephenson testifies, explaining AT&T’s sense of urgency to acquire a significant content studio. “If you miss one technology cycle, it may not kill you, but it will make you sick for a very long time,” he tells Judge Leon.

May 23 AT&T’s Stephenson causes a stir within Time Warner by saying at an investor conference that episodes of HBO’s “Game of Thrones” may be better in a mobile experience if they were hacked down to 20 minutes apiece.

June 12 Judge Leon rules in favor of AT&T, going so far as to assert in the opinion that an appeal by the government would lead to “certain irreparable harm to the defendants.”

June 14 AT&T announces the close of its transaction to acquire Time Warner. Jeff Bewkes is succeeded by John Stankey as CEO of Time Warner.

June 15 AT&T rebrands Time Warner as WarnerMedia.

July 12 The Justice Department files an appeal in the AT&T antitrust case.

Sept. 25 AT&T launches advertising and analytics arm Xandr.

Oct. 10 WarnerMedia reveals plans to launch a streaming service in 2019.

Dec. 14 The early stirrings of HBO Max take shape when TNT and TBS president Kevin Reilly is promoted to chief content officer of digital and subscription for WarnerMedia.

2019

Feb. 26 The U.S. Court of Appeals in Washington, D.C. unanimously upholds the ruling in favor of the AT&T-Time Warner deal.

Feb. 28 Longtime Turner senior executive David Levy and longtime HBO leader Richard Plepler abruptly exit the company amid rumors of a massive AT&T-drive restructuring ahead.

March 4 AT&T reveals a major reorganization: Bob Greenblatt joins as chairman of WarnerMedia Entertainment and direct-to-consumer. Warner Bros. chairman-CEO Kevin Tsujihara adds oversight of global kids and young adults business. CNN chief Jeff Zucker promoted to chairman of news and sports for WarnerMedia, taking on oversight of Turner Sports and AT&T’s regional nets.

March 18 Warner Bros.’ Tsujihara abruptly resigns following a scandal over his relationship with an aspiring female actor.

June 24 BBC Studios Americas president Ann Sarnoff is named chair-CEO of Warner Bros.

July 9 WarnerMedia reveals its streaming service will be named HBO Max.

Aug. 22 Sarnoff formally begins her tenure as head of Warner Bros.

Sept. 3 Stankey is promoted to AT&T president and chief operating officer.

Sept. 12 WarnerMedia signs J.J. Abrams to a massive production pact valued at $500 million, demonstrating AT&T’s commitment to keeping the studio in the dealmaking big leagues.

2020

April 1 Former Hulu chief Jason Kilar named WarnerMedia CEO.

April 21 WarnerMedia sets HBO Max launch date as May 27, pricing it at $14.99 a month.

April 24 Stephenson announces he will step down as CEO of AT&T on July 1, with Stankey set as his successor.

April 30 Xandr is folded into WarnerMedia.

May 27 HBO Max launches amid the pandemic.

Aug. 7 In a massive executive shakeup, Reilly, Greenblatt and WarnerMedia corporate communications chief Keith Cocozza exit the company. Warner Bros.’ Sarnoff is promoted to oversee the newly expanded content group. HBO programming president Casey Bloys adds oversight of programming at HBO Max and WarnerMedia’s basic cablers.

Aug. 10 AT&T begins layoffs for 800 employees, primarily from Warner and HBO.

Oct. 8 WarnerMedia announces plans to cut 1,000 jobs to reduce costs by at least 20% in response to profit hit taken during COVID-19 pandemic.

Nov. 18 Warner Bros. announces that “Wonder Woman 1984” will debut on HBO Max on Dec. 25, the same day it’s set to open in U.S. movie theaters.

Dec. 3 Warner Bros. announces that its entire 2021 slate a list of 17 films that includes blockbusters like “The Matrix Resurrections” and Denis Villeneuve’s “Dune” remake will debut both on HBO Max and in theaters on their respective release dates.

2021

Jan. 25 Stephenson formally retires.

May 16 Bloomberg News reports that AT&T is in advanced talks with Discovery to craft a spinoff deal for WarnerMedia, with Discovery CEO David Zaslav leading the enlarged company.

May 17 Stankey and Discovery CEO David Zaslav formally announce the $43 billion proposed merger.

June 1 Discovery sets Warner Bros. Discovery as the name of the merged company.

June 23 Electronic Arts purchases Warner Bros. Interactive Entertainment’s Playdemic for $1.4 billion.

Sept. 13 Fox Corp. acquires TMZ from WarnerMedia.

Dec. 21 AT&T announces plans to sell Xandr to Microsoft.

Dec. 22 European Commission approves Discovery-WarnerMedia deal.

2022

Jan. 5 Reports emerge that WarnerMedia and ViacomCBS are exploring a possible sale of a majority stake in the CW network with Nexstar Media Group as the leading potential buyer.

Feb. 1 AT&T decides to do a spinoff of WarnerMedia rather than structure the deal as a split-off.

Feb. 9 The Justice Department approves Discovery-WarnerMedia merger.

Feb. 10 Discovery sets March 11 for a shareholder vote on the merger.

March 2 AT&T sets March 11 for an investor presentation day.

© 2022 Variety Media, LLC.

.
.
.

[Sr K] the new media business will trade under the stock ticker “WBD.”

Sr K — 2/1/2022 4:02:58 PM

[Sr K] AT&T Shed Media Assets in 2021. This Year It Wants to Add Investors. Telecom gi...

Sr K — 1/5/2022 12:23:17 PM

AT&T Shed Media Assets in 2021. This Year It Wants to Add Investors.

Telecom giant’s stock slump last year shows that investors have yet to buy into management’s promise to reinvigorate the company

AT&T Chief Executive Officer John Stankey said he hoped that within another year, management could focus on the future and not on restructuring the business.PHOTO: MATT WINKELMEYER/GETTY IMAGES

By
Drew FitzGerald
and
Karen Langley

Updated Jan. 5, 2022 8:16 am ET

AT&T Inc. T 4.11% faces a busy year as it tries to complete a divorce with its entertainment business, ease investor concerns about its dividend and show that it can continue to woo new wireless customers.

The Dallas conglomerate spent much of 2021 on what amounted to a gut remodel. It kicked off a series of big divestitures spanning pay TV, media production and advertising, moves aimed at refocusing AT&T on more predictable growth opportunities from profit centers such as wireless and broadband service.

Wall Street analysts broadly welcomed the changes. The stock price didn’t reflect a similar embrace by investors.

AT&T’s shares slumped 14% in 2021 and briefly touched 12-year lows in December before recovering. The selloff has pushed its dividend yield—a ratio reflecting the cash a company pays its shareholders divided by its stock price—above 8%. The S&P 500 gained 27% in 2021.

Chief Executive Officer John Stankey in June called the period “a hard year that’s been full of anxiety.” By December, he said he hoped that within another year “our attention will be entirely on the future and not on what we needed to do to reposition or restructure the business.”

On Wednesday, AT&T said its core wireless unit added about 880,000 postpaid phones in the fourth quarter, topping the 800,000-phone gain in the same period of 2020. The company’s WarnerMedia unit ended 2021 with 73.8 million global HBO subscribers, ahead of its 70 million to 73 million target.

AT&T in May announced plans to spin off WarnerMedia, the entertainment empire it acquired in 2018, into a new joint venture with Discovery Inc. The transaction secured European competition authorities’ approval in December but is still under review in the U.S. and other countries.

AT&T shareholders will keep a 71% stake in the new media creation, so the company’s stock price partly reflects how the market values that future media business, which will be called Warner Bros. Discovery.

The telecom company that remains is expected to pay shareholders a lower annual dividend. Executives have said the yearly payout will fall from about $15 billion to between $8 billion and $9 billion after the media spinoff closes. An AT&T spokesman pointed to executives who have said that amount will still make it one of the top-yielding companies among dividend payers.

David Jeffress, portfolio manager at Laffer Tengler Investments, said his firm had owned AT&T shares but sold them in early 2021. He cited the dividend reduction among his concerns.

“Once you’ve cut your dividend, and that level of uncertainty is incorporated, it’s really hard to kind of regain the confidence of a dividend investor,” he said. “We may re-enter it at some point in the future, but really we’d want to see the dust settle.”

A second factor depressing AT&T’s shares has also punished its close rivals. Shares of T-Mobile US Inc.and Verizon Communications Inc. sank nearly as much as AT&T’s in 2021, as all three carriers offered deep discounts to keep and attract customers.

Those discounts, coupled with a surge of federal government subsidies tied to the coronavirus pandemic, helped cellphone carriers post unusually strong growth. The top three operators gained nearly 5 million postpaid phone connections—a closely watched metric—over the nine months that ended in September.

The subscriber surge prompted some market watchers to question how long the good times can last. Jeff Moore, a wireless-industry analyst for Wave7 Research, likened such explosive growth to all 32 NFL teams winning the same Super Bowl.

“It just doesn’t make sense,” he said. “You would think that someone is losing and someone else is gaining.”

‘Once you’ve cut your dividend, ... it’s really hard to kind of regain the confidence of a dividend investor.’

— David Jeffress, portfolio manager at Laffer Tengler Investments

AT&T’s rivals have pointed the finger at its now year-old marketing blitz, which offered deep smartphone discounts for new and existing customers, as the start of a race to the bottom that could eventually hurt industry profitability.

AT&T’s leaders have said their wireless customer growth is durable. They have cited smarter marketing and improving traction in the public-safety market, as well as discounts, among the factors helping their results.

Mr. Moore agreed and said Verizon is the most vulnerable to slumping customer growth this year because its retail marketing operation has lost ground to more aggressive rivals. A Verizon spokesman declined to comment.

“There’s too much skepticism about AT&T,” the analyst said. “They’ve really turned around their results.”

Some shareholders weren’t willing to wait. Jerry Braakman, chief investment officer at First American Trust, said his firm held AT&T shares in client portfolios for several years before selling them in December 2020. He said the pandemic’s reordering of the winners and losers in the film industry kept AT&T’s WarnerMedia unit from delivering on its promise.

“AT&T looked like their strategy was struggling, so we decided not to continue to ride something down,” he said. “Sometimes you have to cut your losses and move on.”

Related Video

AT&T CEO on How the Pandemic Has Changed Media's Future

0:00 / 2:52

AT&T CEO on How the Pandemic Has Changed Media's Future

John Stankey talks about AT&T's future as a streaming service and how its theatrical distribution has been affected by the pandemic with WSJ editor in chief Matt Murray at the WSJ Tech Live 2020. Photo: John Lamparski/Getty Images (Video from 10/19/2020)
Other investors are looking to profit from the pessimism. Ryan Kelley, chief investment officer and portfolio manager at Hennessy Funds, said his firm still owns AT&T shares in a value-style fund that focuses on stocks with high dividend yields.

“With the dividend being what it is and with analysts becoming more comfortable with where they are now, we’re hoping for better returns here forward,” he said. “Hopefully most of the downside has already been priced into the stock.”

Exc.

[Sr K] AT&T, Verizon Refuse FAA Request to Delay 5G Launch Cellphone carriers offer to...

Sr K — 1/2/2022 8:22:54 PM

AT&T, Verizon Refuse FAA Request to Delay 5G Launch

Cellphone carriers offer to tailor air-safety protections to mirror limits in France

wsj.com

AT&T and Verizon have said they plan to start new 5G wireless service on Wednesday.PHOTO: JIM WEST/ZUMA PRESS

By
Drew FitzGerald Follow

and
Andrew Tangel Follow

Updated Jan. 2, 2022 7:21 pm ET

AT&T Inc. T -0.73% and Verizon Communications Inc. VZ -0.56%rebuffed a request from federal transportation officials to voluntarily delay the launch of new 5G wireless services, extending a showdown that could lead to potentially disruptive U.S. flight restrictions as soon as this week.

The cellphone carriers on Sunday offered a counterproposal that would further dim the power of their new 5G service for six months to match limits imposed by regulators in France, giving U.S. authorities more time to study more powerful signals’ effect on air traffic. The companies had planned to launch the service Wednesday in as many as 46 of the nation’s largest metropolitan areas.

“If U.S. airlines are permitted to operate flights every day in France, then the same operating conditions should allow them to do so in the United States,” the chief executives wrote in a letter reviewed by The Wall Street Journal.

The Federal Aviation Administration has been preparing to issue flight restrictions that could go into effect around the country as soon as Wednesday. The limits could restrict pilots from using certain automated systems to help land aircraft in bad weather, a move that could disrupt air travel and cargo shipments.

“U.S. aviation safety standards will guide our next actions,” the FAA said Sunday. The agency declined to comment about when it might issue the flight limits in official notices to air missions.

Telecom-industry officials have pointed to dozens of countries, including France, that have already allowed cellular service over parts or all of the frequencies in question, known as C-band. France is among the countries that have imposed wireless limits near airports while regulators study the effect the signals have on aircraft.

The letter by AT&T CEO John Stankey and Verizon CEO Hans Vestberg was in response to one sent by Transportation Secretary Pete Buttigieg and Federal Aviation Administration chief Steve Dickson late Friday. The New Year’s Eve missive asked the carriers to postpone their planned 5G launch by “no more than two weeks” while officials worked to address the wireless services’ effect on specific airports over the coming weeks.

Air-safety regulators have said the new cellular services could confuse key cockpit safety systems and have been preparing to impose potentially disruptive flight restrictions.

AT&T and Verizon, which combined serve more than half of all U.S. cellphone connections, disputed officials’ claims of air-safety risks. The companies postponed a planned December debut of the new signals to provide more time for telecom and aviation regulators to share information about the wireless infrastructure and aircraft equipment in question.

Wireless companies later pledged to limit C-band signals for another six months through early July. The letter Sunday proposed even stricter 5G limits over the same period.

Excerpt

[Jon Koplik] WSJ -- AT&T, Verizon to Delay 5G Rollout Over FAA’s Airplane Safety Concerns ......

Jon Koplik — 11/4/2021 8:31:17 PM

WSJ -- AT&T, Verizon to Delay 5G Rollout Over FAA’s Airplane Safety Concerns ........................

Nov. 4, 2021
5:50 pm ET

AT&T, Verizon to Delay 5G Rollout Over FAA’s Airplane Safety Concerns

Wireless carriers postpone planned Dec. 5 launch of new spectrum to address concerns about potential interference with cockpit safety systems

By Andrew Tangel and Drew FitzGerald

AT&T Inc. and Verizon Communications Inc. agreed to delay their planned Dec. 5 rollout of a new 5G frequency band so they can work with the Federal Aviation Administration to address concerns about potential interference with key cockpit safety systems.

The cellphone carriers said Thursday they would delay their planned 5G deployments until Jan. 5, responding to the aviation regulator’s warnings while disputing claims that the proposed cellular signals would represent a danger.

The FAA, a unit of the U.S. Transportation Department, had been planning to issue official mandates as soon as this week that would limit pilots’ use of certain automated cockpit systems, such as those that help planes land in poor weather, according to government and industry officials familiar with the planned orders. Those limits would aim to avoid potential interference from wireless towers on the ground transmitting new 5G signals.

Such limits for pilots could disrupt passenger and cargo flights in the 46 metropolitan areas where the towers are located, aviation industry officials have said.

Telecom industry officials have disputed the need for more safeguards, saying that available evidence doesn’t show that the proposed 5G signals will interfere with flight equipment. Cellphone carriers in some other countries already use the wireless frequencies in question.

The Federal Communications Commission, which oversees telecom regulations, issued a statement with the FAA later Thursday confirming the voluntary pause. “Aviation safety and technology leadership are national priorities, and with today’s announcement these companies have demonstrated their commitment to both,” the federal agencies said, naming both carriers. The agencies said they would continue working closely together to ensure the U.S. keeps pace with the rest of the world regarding the latest communications technologies, without undue delay.

Verizon, the country’s largest wireless company by subscribers, said it postponed its rollout “in the spirit of good faith” but remained on track to bring 5G services over the frequency range in question, known as C-band, to 100 million Americans in early 2022.

“We appreciate the FCC’s work in its discussions with the FAA and others to ensure a data-driven analysis that will again demonstrate that 5G operations in this band pose no risk to flight safety,” a Verizon spokesman said in a statement.

AT&T said it would continue to work with the FCC and the FAA to understand the FAA’s concerns. “It is critical that these discussions be informed by the science and the data,” AT&T said. “That is the only path to enabling experts and engineers to assess whether any legitimate coexistence issues exist.”

Shares of Verizon fell 2.1% and AT&T declined 1.5% Thursday while broader U.S. stock indexes were mixed.

C-band spectrum covers a swath of radio frequencies measured between 3.7 and 4.2 gigahertz. The spectrum is considered highly suitable for 5G networks and already serves cellphones in other countries. The technology, short for fifth-generation wireless, offers internet speeds much faster than today’s 4G service.

AT&T and Verizon spent tens of billions of dollars to buy the licenses for the 5G-friendly airwaves, with billions more reserved to compensate the band’s previous satellite users and install new equipment. The two carriers and rival T-Mobile US Inc. also won licenses for C-band spectrum that would be activated in late 2023. Only a portion of the band was scheduled for cellular use in December.

The gradual pace of 5G infrastructure upgrades means AT&T and Verizon’s one-month delay isn’t likely to significantly alter their bottom lines, according to industry executives. But a longer pause could pressure the carriers. Verizon, which recently said more than a quarter of its users had upgraded to a 5G-capable smartphone, is counting on C-band frequencies to address the mounting demands from its customers’ appetite for app downloads, games and streaming video.

“A month doesn’t make that much of a difference,” said Harold Feld, a telecom industry specialist at Public Knowledge, a Washington-based tech advocacy group. “What makes a difference is when it starts to look indefinite. Then you get to a situation where a whole investment cycle gets blown up.”

Aviation industry groups have been warning federal officials about what they believe are potential safety implications from the new 5G service and potential economic fallout, according to people familiar with the matter.

A presentation by a coalition of aviation groups to White House officials was expected this week to warn that the potential FAA restrictions could result in airports or even regions being shut down as passengers and shippers experience flight cancellations, delays and diversions, according to a draft of the presentation seen by The Wall Street Journal.

The FAA had been expected to issue official mandates, known as airworthiness directives, that would restrict flights in U.S. airspace that require gauges known as radio altimeters that measure the distance between aircraft and the ground, according to a recent draft of a directive viewed by The Wall Street Journal.

The FAA and FCC have been tussling over the issue for months, though the plan to use the spectrum for cellular networks goes back several years. The FAA has sought specific data about 5G towers’ locations, power and angles to determine whether they could interfere with planes’ glide paths on final approach.

“At this time, the FAA has no way of determining which airports or areas within the U.S. have or will have 5G base stations or other devices that could provide interference with airplane systems,” according to the FAA directive draft. The draft added that such interference “could lead to loss of continued safe flight and landing.”

Earlier this week the FAA issued a special bulletin to pilots, airlines and aerospace manufacturers warning of the potential for 5G interference.

The FCC set its rules for use of the spectrum in early 2020 after reviewing the potential impact on aviation, creating a “guard band” as a buffer between the two uses. Some airplane equipment operates in nearby frequencies, between 4.2 and 4.4 GHz.

The FCC reviewed various industry studies about the safety risks and said in its March 2020 order that “well-designed equipment should not ordinarily receive any significant interference (let alone harmful interference).” The commission later issued new licenses that allowed wireless companies to start operating in parts of the C-band on Dec. 5 of this year, in addition to other frequencies already in use for 5G.

Write to Andrew Tangel at Andrew.Tangel@wsj.com and Drew FitzGerald at andrew.fitzgerald@wsj.com

Copyright © 2021 Dow Jones & Company, Inc.

.
.
.

[Bill] Today was the annual AT&T Summit. Big rah-rah PR production of customers and ana...

Bill — 10/28/2021 5:40:54 PM

Today was the annual AT&T Summit. Big rah-rah PR production of customers and analysts. Maybe some announcements were made, in addition to earnings which beat.

[accountant] Any news today? Up 50 cents

accountant — 10/28/2021 4:48:19 PM

[Sr K] For all the impressions of what you wrote, there are ex-dividend days, but the s...

Sr K — 8/7/2021 12:52:21 PM

For all the impressions of what you wrote, there are ex-dividend days, but the stock was up Friday by .1% according to SI (above).

[Jon Koplik] AT&T shares seem to go down every day, regardless of anything.

Jon Koplik — 7/24/2021 4:30:50 PM

[Investor2] And ... no one cares ... What does that mean? Thanks, I2

Investor2 — 7/24/2021 4:04:30 PM

[Jon Koplik] And ... no one cares ...

Jon Koplik — 7/24/2021 11:43:42 AM

[Johnny Canuck] AT&T (T) Q2 Earnings Beat on Wireless Strength, Guidance Up Zacks Equity Resear...

Johnny Canuck — 7/22/2021 4:09:50 PM

AT&T (T) Q2 Earnings Beat on Wireless Strength, Guidance Up

Zacks Equity Research
Thu, July 22, 2021, 7:31 AM·7 min read

AT&T Inc. T reported strong second-quarter 2021 results with solid subscriber growth backed by a resilient business model and robust cash flow position driven by a diligent execution of operational plans. Riding on a healthy traction from HBO Max and fiber broadband businesses, both adjusted earnings and revenues beat the Zacks Consensus Estimate. The company expects to continue investing in key areas of 5G, fiber and HBO Max and adjust its business according to the evolving market scenario to fuel long-term growth, while maintaining a healthy dividend payment and actively pruning debt. With solid quarterly results, AT&T revised its earlier guidance for 2021 to better reflect the improving market conditions.
Net Income

On a GAAP basis, AT&T reported net income of $1,514 million or 21 cents per share compared with $1,229 million or 17 cents per share in the year-ago quarter. The significant year-over-year improvement was primarily attributable to higher revenues owing to subscriber growth across wireless, fiber and streaming businesses.

Excluding non-recurring items, adjusted earnings were 89 cents per share compared with 83 cents in the year-earlier quarter. Adjusted earnings for the second quarter beat the Zacks Consensus Estimate by 11 cents.

AT&T Inc. Price, Consensus and EPS Surprise
AT&T Inc. Price, Consensus and EPS Surprise
AT&T Inc. Price, Consensus and EPS Surprise

AT&T Inc. price-consensus-eps-surprise-chart | AT&T Inc. Quote
Quarter Details

Quarterly GAAP operating revenues increased 7.6% year over year to $44,045 million, largely due to higher equipment sales within the Mobility business and growth in advertising and subscription-based revenues within WarnerMedia. The top-line growth was partially offset by lower revenues from Business Wireline services and divestures of wireless and wireline operations in Puerto Rico and the U.S. Virgin Islands in fourth-quarter 2020. The top line, however, beat the consensus mark of $42,649 million.

Adjusted operating income for the quarter was $8,893 million compared with $8,972 million in the prior-year quarter owing to higher operating expenses. This resulted in respective adjusted operating income margins of 20.2% and 21.9%. Adjusted EBITDA declined to $13,585 million from $14,112 million.

AT&T experienced a net increase in total wireless subscribers of 5.5 million to reach 191.6 million in service. The company witnessed solid subscriber momentum with more than 1,156,000 post-paid net additions and 174,000 prepaid phone net additions as work-from-home trend continued to gain in popularity. Postpaid churn was 0.87% compared with 1.05% in the year-ago quarter with significant improvement in phone churn. Postpaid phone-only average revenue per user (ARPU) decreased 0.4% year over year to $54.24 due to promotional discounts.
Segmental Performance

Communications: Total segment operating revenues were up 6.1% to $28,128 million as decline in Business Wireline was offset by a healthy gain in the Mobility business (up 10.4% to $18,936 million). Service revenues from the Mobility unit improved 5% to $14,346 million driven by solid subscriber gains, while equipment revenues improved 31.9% year over year to $4,590 million driven by higher mix of high-priced smartphone sales and other postpaid devices. Revenues from Consumer Wireline business were up 2.9% to $3,140 million due to gain in fiber broadband. Revenues from Business Wireline were down 4% to $6,052 million driven by decline in legacy products as customers shifted to more advanced IP-based offerings.

Segment operating income was $7,340 million compared with $7,488 million in the year-ago quarter for respective operating margin of 26.1% and 28.3%. Adjusted EBITDA was $11,425 million compared with $11,531 million in the year-ago quarter.

WarnerMedia: Total segment revenues were $8,791 million, up 30.7% year over year with higher subscription, content and advertising revenues signifying partial recovery from the coronavirus-induced adversities exhibited in the prior-year quarter. Subscription revenues improved 21.3% to $3,961 million due to higher domestic HBO Max and HBO subscribers (up 10.7 million year over year). Advertising revenues were up 48.5% to $1,739 million due to resumption of live sporting events like the NBA. Content revenues increased 34.9% to $3,091 million owing to contribution from theatrical product sales. Operating income was down 11.3% to $1,692 million, primarily due to higher investments, programming costs and expenses in HBO Max, for corresponding margin of 19.2%. Adjusted EBITDA was $1,857 million compared with $2,072 million in the prior-year quarter for respective margins of 21.1% and 30.8%.

Latin America: Total operating revenues were $1,437 million, up 16.6% year over year, due to growth in the Mexico wireless operations and favorable foreign exchange impact. EBITDA improved to $110 million from $33 million in the year-ago quarter for respective margins of 7.7% and 2.7%.
Notable Quarter Developments

During the quarter, AT&T inked a definitive agreement with Discovery, Inc. DISCA to spin off its media assets and merge them with the complementary assets of the latter to form a standalone global entertainment company amid continuous cord-cutting in U.S. households. AT&T will receive $43 billion in a combination of cash and debt securities and will own 71% of the new entity. The transaction, likely to be completed in mid-2022, is expected to enable the carrier to trim its huge debt burden and focus on core businesses. The cash resources are likely to be utilized to augment its network infrastructure throughout the country and expand its fiber footprint.

The separation of the media assets are likely to offer the company an opportunity to better align its communications business with a focused total return capital allocation strategy. Moreover, a focused entertainment company is likely to be better placed to capitalize on the booming direct-to-consumer (DTC) streaming services market and unlock value from media assets. This, in turn, could help it to reinvest in the new entity for more content and digital innovation in order to scale the global DTC business. The transaction is expected to generate cost synergies of $3 billion per year resulting from technology, marketing and platform savings with consolidation of DTC capabilities and elimination of duplicate initiatives.
Cash Flow & Liquidity

AT&T generated $20,837 million of cash from operations for the first six months of 2021 compared with $20,925 million in the prior-year period. Free cash flow at quarter end was $6,951 million compared with $7,593 million in the year-ago period, bringing the respective tallies for the first half of 2021 and 2020 to $12,845 million and $11,493 million. As of Jun 30, 2021, AT&T had $11,869 million of cash and cash equivalents with long-term debt of $155,767 million. Net debt to adjusted EBITDA was about 3.15x.
Outlook Revised

For full year 2021, management revised its earlier guidance based on improving market conditions and solid quarterly performance. AT&T currently expects adjusted earnings to grow in low- to mid-single digit, up from earlier projections of flat to 1% year-over-year growth. Revenue is likely to grow by 2-3%. The company expects free cash flow in the vicinity of $27 billion with a dividend payout in the high 50% bracket. AT&T is evolving its distribution channels for changing customer demands and emphasizing on self-installation and software-based platforms to redefine its business plans for the virus outbreak. While optimizing operations, it is aiming to increase efficiencies to lower operating costs, while focusing on 5G and fiber-based connectivity along with expanded reach of software-based entertainment platforms. The company is also aiming to reduce its debt burden by monetizing non-core assets.

finance.yahoo.com

[Jon Koplik] Barrons on : AT&T presentation about 5G Rollout ...................................

Jon Koplik — 7/17/2021 12:26:13 PM

Barrons on : AT&T presentation about 5G Rollout ................................................

July 16, 2021

The 5G Rollout Is Just Beginning. And AT&T Has to Convince Consumers of the Magic.

By Nicholas Jasinski

AT&T threw a party this past week for 5G. The company is refocusing on its wired and wireless telecom roots, with spinoffs of DirecTV and WarnerMedia in the works. At a New York City loft, bathed in AT&T-blue mood lighting and lo-fi beats, AT&T execs, a Google representative, and actor-turned-tech-investor Ashton Kutcher waxed poetic about the promise of 5G to “untether” gamers from consoles, bring augmented reality to people on the move, and enable telemedicine.

Many of those applications are possible on 4G networks or over Wi-Fi, but 5G promises to make them more mobile and responsive. AT&T and its partners just need to convince consumers. That explains demonstrations of 5G-enabled applications like Stadia (from Alphabet’s Google), a Space Jam AR film experience (from WarnerMedia), download-speed tests, and 5G partnerships with Facebook, Boingo Wireless, and the NBA.

AT&T said its 5G Nationwide network now reaches 250 million Americans, using mostly low-band wireless spectrum, which carries a signal farther than higher-frequency bands; it’s good for covering large areas, but lacks 5G’s full high-speed, low latency promise. And AT&T’s lightning-fast 5G+, which serves parts of 38 cities and some venues, requires dense antenna arrays.

Midband spectrum trades off range and capacity. Telecoms spent $81 billion early this year for midband spectrum licenses ($23 billion from AT&T). The company expects to cover up to 75 million people with so-called C-Band by the end of 2022, with 200 million a year later. Until then, it’s all about the magic.

.
.
.

[Sr K] From the GS story in WSJ Goldman was an adviser on many of the quarter’s larges...

Sr K — 7/13/2021 10:06:01 AM

From the GS story in WSJ

Goldman was an adviser on many of the quarter’s largest deals, including AT&T Inc.’s combination of its WarnerMedia division with Discovery Inc., Medline Industries Inc.’s sale to a group of private-equity firms and Microsoft Corp.’s $16 billion acquisition of Nuance Communications Inc.

[Jon Koplik] interesting (Barrons) letter to the editor / AT&T stuff ...........................

Jon Koplik — 5/29/2021 2:41:15 PM

interesting (Barrons) letter to the editor / AT&T stuff ..........................................

Mailbag

May 28, 2021

Staying Long AT&T, or Taking Flight?

To the Editor:

I’m staying long AT&T (“AT&T Was Punished for Its Dividend Cut. It’s Time to Buy the Stock,” Cover Story, May 21). Even if CEO John Stankey doesn’t move the stock up, I believe that Discovery will turn out to be a winner. Here’s why: 1) spectacular content, unlike other services; 2) John Malone endorsed this deal, and I don’t believe he would have done so unless he felt the deal added tremendous value; and 3) eventually, it’s possible that Discovery will be acquired by Netflix, Amazon.com, or Apple. All three companies are going to spend billions on controlling streaming in the future. I expect ViacomCBS to be the first to be sold, once controlling shareholder Shari Redstone realizes that there’s no chance of going it alone. Let’s see what happens over the next five to 10 years.

Dan Buffettman, On Barrons.com

Copyright © 2021 Dow Jones & Company, Inc.

.
.
.

[Alexis325] What do you think of AT & T competitors, Lumen and Verizon? They spun off from o...

Alexis325 — 5/27/2021 8:23:48 PM

What do you think of AT & T competitors, Lumen and Verizon? They spun off from old AT & T in 1984 when the breakup happened.

[Jon Koplik] good analysis, commentary / AT&T and Discovery combination -- Bloomberg Business...

Jon Koplik — 5/25/2021 1:32:12 PM

good analysis, commentary / AT&T and Discovery combination -- Bloomberg Businessweek .............................

Bloomberg

May 19, 2021

Cable Guys Team Up as the Global Streaming War Intensifies

Discovery hopes WarnerMedia assets will give it the heft to take on Netflix and Disney.

By Felix Gillette and Gerry Smith

Over the years, Discovery Inc., the owner of Animal Planet and steward of Shark Week, has mesmerized TV audiences with all sorts of Darwinian marvels. Alligator snapping turtles. Giant Tasmanian crayfish. Tree kangaroos. Now, Discovery is trying to pull off its own evolutionary leap, crawling out of the choppy seas of basic cable to invade the fertile land of streaming TV. On May 17, Chief Executive Officer David Zaslav sat alongside John Stankey, the CEO of AT&T Inc., at a hastily convened investor call and provided a blurry snapshot of their newly hatched, multi-headed entertainment hydra.

The executives disclosed that AT&T, just three years after completing its costly acquisition of Time Warner and renaming it WarnerMedia, would be spinning off its media assets, which include CNN, TNT, TBS, and the Warner Bros. studio, and merging them with Discovery. Zaslav will lead the new, as yet unnamed, entity. Its portfolio will include a mix of highbrow brands such as HBO -- known for creating lavishly expensive scripted programming like Succession -- along with a slate of middlebrow, basic cable networks, including HGTV, Food Network, and TLC that are adept at churning out low-cost reality shows like 90 Day Fiancé. “There is no reason why this can’t be the broadest, most successful direct-to-consumer platform in the world,” Zaslav said.

AT&T and Discovery have struggled to master the streaming ecosystem. Launched a year ago, AT&T’s HBO Max got off to a slow start, but it’s since gained traction after striking key distribution deals with Roku and Amazon and showing Wonder Woman 1984, Godzilla vs. Kong, and other Warner Bros. films on the same day as their theater premieres. HBO Max and the traditional HBO channel together have about 44 million subscribers in the U.S. and 64 million total worldwide. Discovery’s new streaming service, Discovery+, started in January in the U.S. By late April, the company said it had 15 million streaming subscribers, many of whom get Discovery+.

The AT&T deal may have been inevitable given the current state of streaming TV. The market is increasingly global in its outlook and inhospitable to minnows. Netflix Inc. remains the megalodon, with 208 million subscribers worldwide and a pipeline of hits such as Lupin that are popular across continents. But Walt Disney Co., which two years ago bought Rupert Murdoch’s entertainment empire for $71 billion to gain more scale, is catching up fast, with more than 100 million subscribers to its service, Disney+.

WarnerMedia and Discovery are just starting to expand streaming services overseas. Both faced obstacles in catching up with the behemoths. WarnerMedia, for now, can’t launch HBO Max in the U.K. and other key European markets because of existing deals HBO made with pay-TV provider Sky. And Discovery lacks the buzzy movie franchises of Warner Bros. studio. Their tie-up is “an explicit acknowledgment that neither company believes it can succeed in the streaming future alone,” says Todd Juenger, a media analyst at Sanford C. Bernstein.

Among the new breed of alpha streamers, massiveness is seen as key to survival. After the announcement, Zaslav boasted to reporters that the new entity would have planet Earth’s “deepest programming and film library,” with more than 200,000 hours or programming including “scripted movies and series, animation, sports, news, nonfiction” and children’s programming: “All areas where we have the talent and strength to compete and win.”

Zaslav went on to talk up the width of the combined entity’s “marketing funnel,” the reach of its international “content pipelines,” and the consistency of its “franchise tentpoles.” “Big loud films,” he said, would “act as beacons,” keeping customers “engaged and nourished on the platform,” while creating “a steady free-cash-flow machine” for continual reinvestment in programming.

But other companies that claimed to have unique synergies -- simultaneously owning media properties and the means of distributing them -- have seen their hopes for media supremacy dashed. Earlier this month, Verizon Communications Inc. announced it will sell its media division to Apollo Global Management Inc. for $5 billion, abandoning its hold on several once-dominant online brands, including AOL and Yahoo. And while telecom giant AT&T will maintain a stake in the new, unnamed company, it’s essentially ending its broader ambition to use media ownership as a way of reducing churn among its wireless customers, bringing to a close an expensive Hollywood misadventure. “The fact of the matter is, direct-to-consumer is a global opportunity that is rapidly evolving, and the pace of that evolution is accelerating,” AT&T’s Stankey said on May 17.

The fast-twitch demands of the streaming-TV business have quickly proven to be out of sync with the circadian rhythms of telecom executives. Traditionally, they’ve been accustomed to luring subscribers with enticing smartphones from the likes of Apple and Samsung, which come yoked to long-term contracts customers may not scrutinize for years, freeing executives to focus on technical upgrades to wireless infrastructure -- engineering challenges that glacially play out over decades.

The home-entertainment business, by contrast, requires navigating a market that’s subject to much more short-term volatility and requires constant tweaking of programming, cajoling of customers, and fluffing of talent. Richard Plepler, HBO’s former longtime CEO, who spent his early professional years in Washington, mastering the playbook of Capitol Hill, used to tell colleagues they were in a permanent campaign to win over customers. To survive, HBO had to win an election every month.

The streaming world is even more demanding. Netflix, Disney+, and HBO Max have to win their subscribers’ attention every hour, every day, every week, or risk losing their fickle consumers to whatever streamer has the hottest new drama, blockbuster action movie, or true-crime docuseries.

Zaslav, 61, who has a penchant for sweater vests and is known affectionately in the industry as “Zas,” has spent most of his career in the now-fading cable-TV business. His mentor is John Malone, 80, an early trailblazer of the U.S. industry. As CEO of Discovery since 2007, Zaslav was among the last of the big media chieftains to make his channels available to the growing legions of cord-cutters.

But while he’s relatively new to streaming, Zaslav is well-versed in the complexities of running an international media business. Discovery gets about a third of its revenue from outside the U.S. Its shows are seen in more than 220 countries, and it owns a broadcast TV station in Poland. It specializes in the type of unscripted programming that can easily cross borders. Not much of Shark Week gets lost in translation. Discovery has also become a significant player in European sports, with long-term rights to broadcast the Olympics as well as tennis, golf, and cycling across the continent.

One question is whether the new company can afford to pay for all the programming it will need to compete in streaming. Before the deal, the two companies spent about $20 billion a year combined on content, according to Zaslav. That’s more than the outlay of Netflix, which plans to spend $17 billion this year. But the company will be burdened with $55 billion in debt, which it will try to pay down using cash from a declining cable business -- all while investing in programming for streaming services that will likely lose money for years to come.

Zaslav may also possess something WarnerMedia’s old bosses at AT&T didn’t: a keen understanding of how to recruit, nurture, and pamper talent. Known for being well-connected, he throws an annual Labor Day party at his home in the Hamptons where everyone from Jon Bon Jovi to Katie Couric shows up. He takes pride in pointing out that Discovery hasn’t lost any big-name stars to Disney, Netflix, or Amazon Prime. When Fixer Upper stars Chip and Joanna Gaines left HGTV, Zaslav flew multiple times to their home in Waco, Texas, and wooed them back. “The entertainment business is about talent,” Zaslav says. “I love people.”

The new company will enjoy one immediate advantage. Its portfolio of brands will include CNN, one of the leaders in cable news. Neither Disney+ nor Netflix can offer subscribers access to a major news outlet as part of their monthly package. Playing up the strategic importance of CNN, Zaslav cited his experience years earlier at NBCUniversal, where he helped start the cable news channels CNBC and MSNBC. “I’ve seen the value of those assets,” Zaslav says. “It’s extremely powerful. And in a world where there is so much content, live news and live sports becomes a real palpable currency.”

The deal between Discovery and WarnerMedia is likely to accelerate consolidation in the broader industry, as the owners of other second-tier streaming services look for similar ways to pack on pounds of programming mass. Before the deal’s announcement, Comcast Corp.’s NBCUniversal was seen by many as the most likely destination for AT&T’s media assets. Having missed out on the big meal, Comcast will likely cast a hungry eye elsewhere, perhaps spinning off NBCUniversal and combining it with ViacomCBS Inc. Elsewhere, according to multiple news outlets, Amazon.com Inc. is deep in talks to potentially buy studio MGM, whose stream-friendly library of titles ranges from The Wizard of Oz to the James Bond and Rocky films.

Should Discovery or its ilk stumble, there will be a pack of deep-pocketed, ravenous technology companies ready to pick their bones. But they, too, could find a complex business that isn’t easily disrupted in the Netflix era.

“Over the past year, we couldn’t have been more clear in our concern that the pivot from linear networks to [direct-to-consumer] models was filled with great risks and under-appreciated pitfalls,” analyst Michael Nathanson wrote in a note to clients the day after the AT&T announcement. “Even the best-in-class companies like Netflix and Disney require constant updating of sexy new content, deep reservoirs of glossy titles, and the commitment to spend dearly until monthly subscriber churn drops to a low enough level that signals it is time to start raising prices. As we saw yesterday, few had the mettle to stare into this abyss and keep going.”

BOTTOM LINE -- After its marriage with AT&T’s media brands, Discovery may have 80 million global subscribers. But that still pales against streaming leader Netflix’s 208 million.

© 2021 Bloomberg L.P.

.
.
.

[Investor2] Why AT&T's stock is getting smashed after mega media deal with Discovery [graph...

Investor2 — 5/19/2021 7:14:24 PM

Why AT&T's stock is getting smashed after mega media deal with Discovery

Brian Sozzi
·Anchor, Editor-at-Large
Tue, May 18, 2021, 12:15 PM·4 min read

Wall Street is slicing and dicing the investment thesis on AT&T following its blockbuster sale of WarnerMedia to Discovery on Monday, and is coming to the conclusion there is really no reason to be optimistic on the stock in the medium-term.

Shares of the soon-to-be telco plunged as much as 7% in Tuesday trading as investors questioned the long-term outlook for the company.

"For AT&T investors, while we view this transaction, and the February announcement that it would sell DirecTV, as positives, we think it will take time for AT&T to recover. AT&T has lost significant ground in both wireless and fiber broadband as it spent time and money building HBO Max," Spartan Capital head of equity research Barry Sine said in a note to clients.

Sine also voiced concern about AT&T's governance in light of the WarnerMedia flop.

"We note that eight of the 13 board members who went along with both acquisitions are still comfortably ensconced on AT&T’s board. Change apparently came from new CEO John Stankey who evidently tired of trying to defend and manage the telecom/media conglomerate he inherited," Sine said.

AT&T surprised Wall Street Monday by saying it will spin off its media division WarnerMedia — which is bought for $85 billion just three years ago — and merge it with Discovery. The move joins household name media brands such as WarnerMedia's HBO and CNN with Discovery's HGTV, Animal Planet, Food Network, and TLC under one house.

The newly combined WarnerMedia and Discovery would form one of the largest global streaming platforms in direct competition with Netflix and Amazon. Proceeds from the deal for AT&T will go towards paying down a considerable debt-load of more than $160 billion, which will help as the soon to be pure-play telecom giant builds out its 5G network. AT&T is set to receive $43 billion in a combination of cash, debt securities and WarnerMedia's retention of certain debt, according to the press release announcing the deal.

Discovery President and CEO David Zaslav is set to lead the newly combined company following the close of the transaction, which is expected to take place in mid-2022. The combined company is targeting an annual $52 billion in sales and $14 billion in adjusted EBITDA (earnings before, interest, taxes and depreciation).

Sine added AT&T's dividend cut was unwelcome news, too.

"AT&T management has said they plan a dividend payout ratio of 40% to 43% on an expected $20 billion in free cash flow, or about $8.3 billion. On the present share base of 7.1 billion shares, that represents a $1.16 per share annual dividend or about 44% below the present $2.08 annual dividend. It remains to be seen if investors will accept the resulting 3.7% yield, down from the present 6.6%," calculated Sine.

Other analysts on the Street told Yahoo Finance Live that while AT&T cutting bait on media is a good move considering they couldn't figure the business out, the optics on the deal are tough on the eyes and unlikely serve as a confidence booster for existing management.

"It is rare that you see a management team and a board actually acknowledge so clearly that they made a terrible mistake and that they're willing to undo it. So I actually give them some credit for it. Now it's not to say it doesn't leave behind a tremendous amount of wreckage, right? I mean they spent $175 billion for these assets and then three years later, they are unwinding those positions for what is kind of in theory, i guess, about $80 billion or so. So they destroyed a ton of value, but not many companies are willing to admit they made a mistake right away," MoffettNathanson media analyst Craig Moffett said.

[Sr K] AT&T’s Ride May Get Bumpier The perfect can be the enemy of the good, but the D...

Sr K — 5/19/2021 10:09:20 AM

AT&T’s Ride May Get Bumpier

The perfect can be the enemy of the good, but the Discovery deal is far from perfect.

By
Holman W. Jenkins, Jr.

May 18, 2021 6:11 pm ET

PHOTO: DADO RUVIC/REUTERS

Retreat can have its heroic qualities but not a faintest whiff of heroism attached to AT&T’s retreat Monday from its big Warner Media merger, which it will unwind by shifting the assets to Discovery Inc.

Both companies’ stocks went down in the hours after the announcement. The deal looks less about finding the right future for the covetable Warner assets than about sketching for AT&T management a quick escape that could bypass a shareholder vote and face minimal regulatory risk, while wiping down a sizable chunk of debt. In turn, management could shift its focus back to running a wireless business, which a skeptical investment community thinks AT&T’s pratfall-prone leadership is less able to mess up.

Warner’s top-drawer assets, especially HBO and its Hollywood movie and TV studios, not to mention its cable TV brands and sports rights, will land on a much smaller Discovery, far more dependent on the declining cable bundle, whose specialty is reality shows. This only prolongs the turmoil at Warner, which has undergone necessary cost cutting and refocusing under AT&T for the streaming age.

Discovery’s own share price turned south once investors realized they weren’t getting a bargain, paying $43 billion for a combination that would remain 71% with AT&T shareholders. Behind the curious deal is reportedly former cable king and Discovery shareholder John Malone, known for structuring outcomes that work well tax-wise and governance-wise for John Malone.

And the net result? Another freestanding late entrant in the streaming wars, against Netflix, Disney, Amazon and others at a time when too much unwatched content is already competing for eyeballs. Churn is predictably rising as viewers sign up and quit after bingeing on the new hot show. Production and talent costs are soaring out of sight. The audience is fragmenting along with their taste in programming. Young people aren’t watching at all. For many others, the “golden age of TV” is turning drossy: It’s becoming easier not to watch than to invest the time to find a show worth watching.

For all these reasons, the savviest investors now seem to be focused on free, ad-supported streaming, which at least lets viewers kill time without worrying about getting their money’s worth from multiple streaming subscriptions.

AT&T shareholders may have soured on the WarnerMedia merger but they still want the best return on their Warner holdings. Is a 71% stake in the “new” Discovery really it? Why not put the assets on the block to tempt Disney, Netflix, Amazon, Apple or Comcast ? Why not separate out the one play that made sense and was starting to work, keeping HBO Max and related properties in which AT&T has invested so heavily?

AT&T never made a coherent case for itself, but everybody needs a wireless and/or home broadband supplier, and combining this business with HBO Max still seems a promising way to stabilize the consumer base for both, so great are the financial benefits of reduced customer turnover and acquisition costs.

In a perfect world, two businesses run well by separate managements would each have a strong arm to lean on. HBO Max wouldn’t need to be a swollen Netflix doppelgänger, spewing money in all directions for mediocre content; it would need only to be an interesting collection of semi-exclusive shows with a special way of generating value by being aligned with one of America’s premier connectivity providers.

OK, in all things, the perfect can be the enemy of the good, and this is one of those cases. But what AT&T shareholders are settling for is a pretty lowly definition of good. Even now, they may yet rebel and insist Warner assets be auctioned off to the highest bidder. In theory, management is free to spin off Warner into a separate stock (one element of the proposed “reverse Morris Trust” transaction) without a shareholder vote. But how can AT&T then award half the value to Discovery’s shareholders without asking its own shareholders to approve the deal?

AT&T CEO John Stankey says the whole disastrous episode might have been different without the prolonged, feckless antitrust opposition from the Trump administration. In a predictable piece of nullness, Makan Delrahim, formerly of the Justice Department, is claiming vindication despite his ugly 2019 court loss. He seems to have forgotten that trustbusters don’t exist to prevent shareholders from entering into bad deals (routine in the media business). They exist to stop deals that are too good, creating price-gouging monopolists. If his case had made any sense, AT&T would be a giant financial success today.

Mr. Delrahim was put in a tough spot by his boss President Trump, but his case was rightly laughed out of court for treating the world as if it were cableland 1992, sans streaming. His defeat, and his latest comments, illustrate mainly the long-running intellectual corruption of U.S. antitrust enforcement. He should not underestimate his contribution to an AT&T debacle. The whole story reflects poorly on U.S. corporate management, U.S. corporate governance and the increasingly politicized and unpatriotic regulatory environment in which they operate.

[Jon Koplik] Wash. Post -- govt. program to cut bill. Verizon using it to force a new data pl...

Jon Koplik — 5/18/2021 1:55:30 PM

Wash. Post -- govt. program to cut bill. Verizon using it to force a new data plan .................................

May 17, 2021

The government has a program to cut your Internet bill. Verizon is using it to force you onto a new data plan.

Help Desk: Readers tell our tech columnist about shenanigans signing up for the Emergency Broadband Benefit, which is supposed to knock $50 off monthly bills

By Geoffrey A. Fowler
Technology columnist

The government has a new program to help Americans pay their Internet bills. Unfortunately, companies like Verizon are twisting it into an opportunity for an upsell.

Last week, I wrote about the arrival of the Emergency Broadband Benefit, or EBB, the largest federal program ever to help people afford Internet access. The EBB can cut $50 off monthly Internet bills and is available to tens of millions of Americans hit economically by the coronavirus pandemic. There’s $3.2 billion up for grabs, until the program ends when money runs out in the months ahead.

All Internet service provider participation in the program is voluntary, and each ISP gets to write some of its own rules for how to hand out the money. Soon after the EBB launched, I started hearing from Washington Post readers about their frustrations signing up with certain ISPs.

None of this should stop eligible Americans from trying to claim their broadband benefits read this piece for my advice but it’s important to call out some of the shenanigans.

Verizon elicited the most ire from readers. It requires customers to call a phone line to register for the EBB, rather than just signing up online. And when you do, Verizon tells some customers the EBB can’t be used on “old” data plans, so they’ll have to switch. That might be allowed by the letter of the law but certainly isn’t the spirit of the program.

Reader Eric from Hopedale, Mass., who asked to be identified only by his first name, was told his current no-contract Internet service, which costs $62 per month, would need to become part of a new Verizon Fios plan. That would run him $79 per month.

Yes, Eric would save money in the short term thanks to the $50 government discount, but when the EBB program runs out, he’ll have to pay more each month. “I’m sure the whole point of Fios doing this is to get more people to sign up for either their TV or mobile services,” he said in an email.

Annie Styles from Arlington, Va., who pays $79 per month for her Internet, says Verizon told her she would have to switch to a plan that would cost her closer to $95. “I stopped pursuing it with them after the math didn’t work out,” she says.

Sharon from Harrisburg, Pa., who asked to be identified only by her first name, said she was told by two customer service representatives that she could receive the EBB discount only if she increased her current Internet speed and reconfigured her TV package, too. She said the ultimate price would have depended on what video package she was forced to switch to, as well as new equipment with fees but she dropped her EBB application out of frustration before she got that far.

When the EBB ends, she estimates, her overall monthly Internet and TV bill would be at least $50 higher. “In my case, it seems like EBB only benefits Verizon,” she said.

Verizon spokesman Alex Lawson said the company makes it clear on its site that the EBB can be used on only “qualifying plans.” And those include only its newer Mix & Match plans.

Mix & Match lets customers drop services like home phone that used to be bundled into Verizon’s packages, and Lawson says Verizon has found it saves customers money compared with its older bundles.

“There’s really no story here. We’re on the side of the customer and want to ensure they pay for what they need, and not for what they don’t,” Lawson said.

But Verizon’s new deals don’t mean everyone will save money. Eric said he got his $62-per-month contract for Gigabit Internet as a sign-up special. If he changes his plan at all, he loses the deal.

And unfortunately, Verizon isn’t the only ISP saying it won’t support older plans. AT&T, which also makes customers call to activate the EBB for home Internet, says existing customers will have to select from one of a handful of options, and the plan they select will become their plan after the EBB program ends. Charter says that “an extremely small percentage of customers” who have legacy Internet plans will have to switch to a Spectrum Internet plan as part of enrolling in the EBB.

One refreshing standout was Comcast, the nation’s largest ISP. “If a customer is on an old plan that’s not offered anymore, they are still eligible as long as they meet the qualification criteria for EBB,” spokesman Joel Shadle said.

© 2021 The Washington Post.

.
.
.

[Lee Lichterman III] AT&T is like Lucy promising Charlie Brown that she will hold the football...

Lee Lichterman III — 5/17/2021 6:29:06 PM

[Elroy Jetson] Why is it every time I think about AT&T, all I can visualize is a mime trapped i...

Elroy Jetson — 5/17/2021 5:37:30 PM

Why is it every time I think about AT&T, all I can visualize is a mime trapped in an imaginary box?
We all know T is never going to get off Gilligan's Island . . . . . . . . . no matter how many episodes of "Business Reorganization" we watch.

[Sr K] AT&T in Talks to Combine Media Assets, Including CNN, With Discovery Deal would...

Sr K — 5/16/2021 12:58:29 PM

AT&T in Talks to Combine Media Assets, Including CNN, With Discovery

Deal would continue consolidation in media business buffeted by cord-cutting and streaming

The talks signal a major pullback by AT&T, which placed a massive bet on media with its 2018 acquisition of Time Warner Inc. for around $81 billion.PHOTO: TING SHEN/ZUMA PRESS

By
Dana Cimilluca
,
Drew FitzGerald
and
Cara Lombardo

May 16, 2021 12:44 pm ET

AT&T Inc. is in talks to combine a big portfolio of media assets, including CNN, with Discovery Inc., according to people familiar with the matter, a deal that would mark a major strategy shift for the telecom giant as the traditional TV business faces prolonged pressure.

The talks, which cover CNN and other parts of AT&T’s WarnerMedia division, including the TNT and TBS cable channels, are advanced, and an agreement could be reached by Monday, the people said. Should there be a deal, AT&T shareholders would own a big stake in the new entity, some of the people said. The people cautioned that a deal isn’t done yet and the talks could still fall apart. Other details of the potential transaction couldn’t be learned.

A deal between WarnerMedia and Discovery, whose portfolio includes its namesake network and HGTV, would further consolidate a media business buffeted by cord-cutting and competition from streaming video.

The talks signal a major pullback by AT&T, which placed a massive bet on media with its 2018 acquisition of Time Warner Inc. for around $81 billion. That deal made it the world’s most indebted nonfinancial company.

Bloomberg earlier reported that AT&T was in talks to combine media assets with Discovery.

Skip