Late yesterday, AT&T reported its fourth quarter earnings and things are looking rosy. Earnings per share were up and income, while not quite meeting expectations, was also quite good. If you’re interested, the entire presentation, including audio, video, and PDF, has been posted on their investor relations web site.
The big takeaways for the folks at this site were:
Satellite TV grows, terrestrial shrinks: The DIRECTV unit added over 200,000 subscribers in the fourth quarter, not surprisingly due to the extremely popular free NFL Sunday Ticket promotion. However, U-Verse contracted by a similar amount, leading to slightly negative growth when you look at the big picture. This doesn’t come as much surprise since the U-Verse unit has been losing subscribers consistently. My guess is that you’ll see some accelerated moves to get those U-Verse customers to switch to satellite instead of losing them from the ecosystem completely, since it’s still going to take some time before local U-Verse systems are capable of offering the same options and quality as satellite.
Latin America beams bright: Somewhere, former DIRECTV EVP Bruce Churchill is smiling and saying “Panamericana” to himself, as favorable exchange rates meant that DIRECTV Latin America and Sky Mexico were some of the best performers in the entire AT&T group.
“Net TV?” AT&T top dog Randall Stephenson used the terms “Net TV” and “coming soon” in the same sentence, leading to a frenzy of speculation. It’s widely believed that AT&T is planning to roll out some sort of thin, web-based bundle similar to Sling TV and Verizon’s online offering. This would go further than existing mobile app experiences by letting customers subscribe only to the online portion without actually having any terrestrial or satellite service. This would be a savvy move for the operator; while net neutrality rules prohibit them from offering better service or cheaper data rates for this sort of service, making it available first to AT&T Wireless customers who have cut the cord opens up a large new market for the company and could potentially help them crack the big problem of millennials who increasingly don’t pay for traditional cable or satellite. Details are still sketchy but my thought is, if you’re familiar with what Sling TV does, and the devices on which it operates, you’re probably not far off base.
All this adds up to a very exciting year to come for AT&T as it positions itself strongly against Verizon and others as the one portal through which all your entertainment flows. If you still like traditional cable TV or even landline phone, AT&T is there for you just like they were in 1995. If you want cell service with an emphasis on video streaming, they’re there too. On the other hand, if you choose to look to the sky for your entertainment, they have you covered. There’s no other company that offers terrestrial cable, landline, internet, cell, and satellite, and there’s no bigger entertainment provider in the world. It’s going to be a great 2016 no matter how you get your service, and it’s only going to get better as years go on.