AT&T: A Long-Term Growth Company

In this article, let’s take a look at AT&T Inc. (T), a $173.99 billion market cap company, which is America’s second-biggest supplier of both mobile phone and fixed-line broadband services.

No Significant Impact

The company agreed to buy DirecTV (DTV), the country’s leading satellite TV distributor, for $48.5 billion in cash and shares. The deal will create a unique new competitor with unprecedented capabilities in mobility, video and broadband services. The goal is to better meet consumers’ future viewing and programming preferences.

Although people are wondering about the suitability of the transaction, we think this will not constitute a significant impact in the firm.

Most Important Asset

Wireless remains AT&T’s most important asset contributing to half of sales.

The wireless industry is characterized by fierce competition, but neither T-Mobile (TMUS) orSprint (S) can compete because of the cost disadvantages they have when compared to AT&T. The firm´s scale and financial resources contribute to strong margins and cash flow.

Additionally, the company focuses in two important aspects: the improvements in customer service and cutting costs. Further, the firm is seeking opportunities to expand its wireless business in international markets.

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