The focus is on 5G wireless and fiberoptic broadband services. DirecTV,
Vrio, and Xandr all are gone or in the process of being divested.
AT&T (ticker: T) completed the spinoff of its media business on April 8, merging the unit with Discovery to create the streaming-centered entertainment company Warner Bros. Discovery (WBD). Now AT&T is a telecom pure-play once again, with subscription businesses that produce recurring revenue and no more cyclical media exposure.
The company hopes that its new profile will help reverse a decadelong stretch of underperformance versus the market and competitors’ stocks.
Barron’s spoke with CEO John Stankey about the slimmed down company’s next steps. They include vast investments in 5G wireless equipment and laying out fiberoptic cable, plus a lower debt load and a smaller, more manageable dividend commitment.
Here are highlights from our conversation, edited for length and clarity.
Barron’s: It has been a busy year and a half of divestments and transactions for AT&T. How do you feel now that the portfolio reshuffling is behind you?
John Stankey: I feel really good, I feel proud of the team. There was a lot of extra work and sacrifice to get here, and it was not the most pleasant work to do. Now that we’re on the other side, I’m energized about the opportunity to play some offense.
The new AT&T is going to be the best wireless and broadband provider in the United States. No question we have the management team and the capital structure to go after that now. When this group of folks has the resources they need to compete, they can be the best in the business and they’re going to do that.
AT&T has more than 200 million customers. What’s your current read on the health of the U.S. consumer and economy? And with some predicting a recession as soon as next year, how are you preparing AT&T for that possibility?
I don’t want to say we’re recession proof, I don’t think any business is recession proof. But when we do our customer…