US telco AT&T will consider opportunities to divest or restructure “low-performing and non-strategic” parts of the business over the next two years, according to CEO Randall Stephenson.
In a conference call with analysts, Stephenson also said that…
US telco AT&T will consider opportunities to divest or restructure “low-performing and non-strategic” parts of the business over the next two years, according to CEO Randall Stephenson.
In a conference call with analysts, Stephenson also said that AT&T will be looking to acquire more spectrum, following the collapse of its proposed acquisition of T-Mobile USA.
With reference to AT&T’s US$1.4bn sale of Sterling Commerce to IBM in 2010 and the restructuring of its holdings in Mexican fixed-line operator Telmex, Stephenson said: “You’ll see more of these actions over the next 24 months”.
AT&T would “take a very hard look at” its directories business and would have to decide whether it should be kept or restructured.
Parta of the business involving rural access lines are under-performing and required “fundamental changes,” he said.
Stephenson also suggested that his company currently sees no clear solution for providing broadband to Americans in remote rural areas
“We’re looking at rural America and asking: what’s the broadband solution? We don’t have one right now.”
Providing broadband services to Americans in rural areas had been one of AT&T’s main arguments in favour of the failed T-Mobile transaction.
The FCC said last year that 18 million Americans are without broadband access, but that its new public subsidy programme, the “Connect America Fund”, would “put the country on the path” to universal broadband within a decade.
In the AT&T conference call, Stephenson criticised the FCC for its policies on spectrum, suggesting that regulatory uncertainty was proving a major obstacle for AT&T.
“Our biggest issue isn’t identifying [spectrum] and pursuing it. Our biggest issue is understanding what we’re allowed to do,” he said.
Nonetheless, he made clear that AT&T would “continue our push to add spectrum in the open market” and would advocate more open spectrum auctions.
Commenting on the remarks by AT&T CEO Stephenson, an FCC spokesman said that the agency had approved more than 300 commercial mobile transaction applications over the last two years, including AT&T’s acquisition of spectrum from Qualcomm.
Meanwhile, the chief of the FCC’s Wireless Telecommunications Bureau, Rick Kaplan, said that “our goal for spectrum auctions is that every carrier – big, medium, or small – that needs additional spectrum should have a meaningful chance to bid for it”.
Stephenson was speaking as AT&T revealed a loss of almost US$6.7bn for Q4 2011. This compared to a profit of US$1.1bn in the same quarter in 2010.
In the wake of the T-Mobile deal collapse, AT&T has had to pay a break-up fee to the target’s parent, Deutsche Telekom.
According to Deutsche Telekom, this break-up fee included US$3bn in cash, as well as spectrum and a “roaming rights/wholesale agreement”.
AT&T did announce strong sales figures in its results presentation. It made 9.4m smartphone sales in Q4, up 50% on its previous record for a quarter.
