AT&T’s CEO Defends Buying DIRECTV & Time Warner Following Shareholder Concerns

Recently AT&T has been under fire for its TV efforts as they warn that a million TV customers could be lost int he 3rd quarter of 2019. Most noticeably was the investor group Elliott Management who is pushing for DIRECTV to be sold and new leadership be brought in at AT&T.

Now AT&T’s CEO says that buying DIRECTV and Time Warner was the right move. “If you had asked me that question five years ago, I’d be hard-pressed to say it makes sense, in the old world. In the new world, it makes all the sense in the world.” Said AT&T’s CEO Randall Stephenson at the Goldman Sachs’ Communacopia conference this morning.

AT&T is betting big right now that it can turn its TV numbers around in 2020 with the launch of AT&T TV and HBO Max. According to a letter sent to shareholders last week AT&T says that “In 2020, AT&T expects premium TV subscriber trends to improve due to far fewer customers on promotional pricing and the nationwide launch of AT&T TV, which delivers a premium streaming experience. Other factors that may help improve Entertainment Group EBITDA beyond 2019 include: broadband growth due to increased fiber penetration and availability of higher speeds; a higher-quality video and broadband customer base with lower churn and higher ARPU; continued cost management; advertising growth from Xandr and less pressure from declining legacy products.”

For now, we will have to wait and see if this play for streaming with AT&T TV and HBO Max along with advertising growth will pay off. Yet as AT&T’s plan is now just getting underway, it seems that some are becoming impatient to see growth return to AT&T’s TV business.

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