AT&T reviews Time Warner acquisition and updates Q2 outlook

AT&T execs took the opportunity to provide a general corporate update at the recent Wells Fargo Securities 2018 Telecom 5G Forum.

The main bit focused on a recap of the rationale and outcome of the Time Warner acquisition. It is the culmination of a strategy to build a modern media company around four critical elements, announced CEO Randall Stephenson and CFO John Stephens. Those elements are:

  • Premium content with wide distribution. HBO, Turner and Warner Bros. combined with targeted digital properties like Bleacher Report and AT&T’s investment in Otter Media have the potential to drive viewer engagement to new levels.
  • Direct-to-consumer relationships. AT&T has more than 170 million D2C relationships across wireless, video and broadband, which provide valuable insights on how the company delivers content, what content it distributes and how it distributes that content.
  • Advertising technology. AT&T’s D2C relationships give the company insights regarding what customers are watching, where they’re watching it and at what times they’re watching. These insights can create incredible value for advertisers.
  • High-speed networks. These networks must be able to deliver premium content to whatever screen the customer demands at the lowest cost per megabyte possible.

There was inevitably lots of talk of synergies and Stephenson seems to be especially excited about the advertising opportunities now available to AT&T, where other lovely massive M&A concepts such as scale, efficiency, reach, etc come into play. They will build a real-time exchange for premium video advertising coordinated across mobile devices and TV screens which, as we’re seeing, is a nice earner.

In other news AT&T reiterated its desire to reduce its debt (not doing any more M&A for a bit might help), and says a lot of its capital-intensive projects, such as US fibre and Mexican LTE, are already well underway. It also reckons there will be some nice savings from all its SDN investments, that the strengthening dollar will hit its international revenues and that wireless revenue growth will be flat.

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