What We Could Have Been

Warning about this large post, but I have a question for everyone here. Especially the executives and finance that browse this site. Maybe you can answer this.

I am by no means an MBA or a Business strategist. I'm just an investor, casual observer, and an economist (by education) looking at this from my limited viewpoint.

Why didn't we (AT&T) focus on doing what we know best? Mobility remains our single most profitable service that we offer. Fiber is our fastest growing product and is quickly becoming (if it hasn't already) our 2nd most profitable.

Why didn't we double down on mobility and focus on producing/selling nearly every leg of the product for the end user. From manufacturing devices to selling the service. In 2011, Motorola went bankrupt and sold Motorola Mobility for pennies on the dollar to Google. Why didn't we beat Google to the punch and buy this? Remember, the Google Pixel (now the nations fast growing phone) is based on Motorola's technology. Why didn't we even buy the company from Google in 2013 BEFORE it was sold to China? (Lenovo). Granted, it took google 10 years before they produced a phone that competes with Apple and Samsung, this still would have been a better decision than the ones we made.

We missed another opportunity as well: Blackberry Limited.

People know iOS and Android, but we forget the 3rd system was blackberry OS.

It cost us $49Bn, to purchase DirectTV. I understand the idea, buy a company with a massive user base and sell them internet/mobility. Problem though, people didn't like DirectTV.

With $49Bn we could have bought the following companies instead:

Motorola Mobility(Devices): $2.9Bn
Blackberry Limited(OS): $2.9Bn
ASE Technology Holdings (Semiconductors): $14Bn

That's $19.8Bn for Mobility. I'm not even including Nokia on this list, which would have been a better purchase as well. Did we forget who manufactures 4G and 5G Micro-Cells that nearly every single telecom purchases?

Now lets jump over to wireline, specifically internet. Figuring out how to massively expand our hold on internet services. With 19.8Bn gone to mobility, we have $29.2Bn left over.

We would have bought the following ISPs:

Lumin Technologies: $2.3Bn
Windstream Holdings: $10Bn

These two, Lumin and Windstream already COME WITH a built in subscriber base for internet that could have been leveraged for new mobility customers and thus expand our footprint. Between these two we'd have internet via fiber, internet via copper, internet via satellite, internet via cellular.

$41.5Bn on total. This would leave us $7.5Bn for us to buy up as many local and regional providers we could get our hands on.

All of this, would have been cheaper to purchase than DirectTV and arguably would have been a smarter buy.

We could have been a company that sold customers from start to finish on mobility. The innovation alone, would have made us a more competitive tech focused company. Look at Tmo. The manufacture a CHILDS WATCH. Overnight, Tmo was able to expand their user based to children under 12 years old, by creating a watch that parents can use to track children. Millions of additional lines of service.

Either we adapt or we die.

Why didn't we do this from the jump? Where do we go now?

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Here's why they chose the path they chose:

hu·bris: [ˈ(h)yo͞obrəs]
NOUN
excessive pride or self-confidence:

I don't disagree with you, but while Randy and Stankey took it to new heights, this distraction has been going on for much longer. Remember when high speed internet (DSL) was just becoming a thing? People were practically starving for it. There was so much potential just waiting to burst out with the arrival of faster connections.

The first company to get high speed internet into people's homes would have a decade of faithful customers hooked. AT&T (SBC at the time) had the means and ability to do it, but Whitacre was completely distracted by... remember? LONG DISTANCE. And everyone knew the writing was on the wall for this dying cash cow. Yet that was his EXCLUSIVE focus. Read emails from back in in that day. The level of cluelessness was profound.

in hindsight that is an excellent idea but what if we can do what you mentioned and bundle up wireless fiber and max streaming for great price.

"Except in rare cases, M&A activity is a sign of a company that is no longer creating new products or value."

I honestly handled considered this. Learned something new today. I thought of this as the fastest way to aquire the specific technologies we needed to control the process from production to end user without needing to deal with initial R&D.

I honestly hope, as a company, we look towards innovation and focus on what we actually know how to do.

Except in rare cases, M&A activity is a sign of a company that is no longer creating new products or value. It is late- stage company stagnation. Really good companies don’t have to bother. You always overpay and end up destroying value in the company that gets acquired.

Likely because mobility and even broadband/fiber fall into commodities more and more, which pricing has appeared at times to be a race to zero.

Content and its distribution are not really commodities yet, though some may argue that’s changing too.

Those purchase and acquisition integration decisions were likely made as a way to protect the company’s future against the commodities race to zero.

Hindsight shows in the end they were extremely costly upside down decisions. Whether mistimed, mismanaged, or misunderstood. Doesn’t matter which of those reasons at this point, outside of at what point does the market no longer trust those making the head decisions, and force a change if needed. Changing leadership won’t undo the debt, though I do believe trust and faith need to be rebuilt. Would be incredible to see the top executives all vow to dump all their various forms of compensation back as reinvestment or applied towards company debt for the next 2-3 years. It wouldn’t make much of a dent on the books, but might rally the workforce for all to try and help save the ship.

It doesn’t really matter for most of us. Att locks us all out, except for the work we are tasked with. Example: Employee feedback this year was finalized on April 18. RTO (with the very first mentions of move requirements disseminated to the masses) was first distributed on May 16 and yet leaders like Summers on his Town Hall, said we were all ok with RTO. Artfully crafted to define RTO as getting back to work, while restating the terms that we had to decide on moving states away, after the survey finalized. The business model that relies on parity has been castrated.

“Rethink Possible” is dead for everyone but Stankey and an influential set of backers. Until he and several others are removed, none of you are empowered to rethink anything. Your questions and analysis are wonderful, but it never mattered.

Hindsight is 2020. Stuff like this only comes from clever risk takers. We don't have those here.

They're too old to be that clever that's why.

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What We Could Have Been

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