AT&T CEO Touts Vertical Integration, Notes Possible Successor, M&A Uncertainty
CEO Randall Stephenson defended AT&T's vertical integration strategy Tuesday at a Goldman Sachs media conference, a week after an activist investor questioned such focus (see 1909090020). Stephenson said if he had been asked five years ago whether it made sense…
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to vertically integrate media and network assets, he would have been hard-pressed to say yes, but content creation is changing radically, and growth now is digital. Having a direct path to consumers provides a better way to offer new digital platforms such as HBO Max. Though Stephenson, 59, has no immediate plans to retire, WarnerMedia CEO John Stankey would be in a good position to be heir apparent if he executes on the company's strategy of integrating premium content and distribution, the current AT&T chief said. Stephenson doesn't plan to participate in more consolidation. He noted that given regulatory uncertainty over mergers and acquisitions, it's hard to predict outcomes. Among current deals is T-Mobile's buying Sprint, which states are challenging (see 1909170035). Stephenson noted AT&T has 170 million customer relationships in pay TV, broadband and mobile, plus it's in 55,000 retail locations: "We touch customers 3.2 billion times a year." Dish Network did a "hard drop" of HBO in Q2 after they failed to reach contract renewal (see 1902130039), but the network grew 3 percent that quarter, he said. AT&T shared the activist letter with its board, Stephenson said, and will see what makes sense for shareholders.