AT & T lost more than 1.3 million TV customers as a dive in the third quarter of 2019 The traditional pay-TV and online streaming market continued.
AT & T reported today a net loss of 1
The latest losses amount to 20.4 million satellite and fixed line TV subscribers and 1.1 million streaming subscribers. AT & T has lost nearly 5 million satellite and cable television customers since the end of 2016, when it had a total of 25.3 million subscribers in this category. AT & T lost more than 700,000 streaming customers last year, peaking at 1.86 million in the third quarter of 2018.
AT & T's quarterly video entertainment revenue declined from $ 8.3 billion to $ 7.9 billion year-over-year. AT & T has focused on increasing average revenue per customer, which grew 5.6% to $ 121.35 per month in the Satellite and Cable TV category. The entire Entertainment Group – including TV, broadband and fixed-line telephone services – generated $ 11.2 billion in revenue in the third quarter, compared to $ 11.6 billion in the third quarter of 2018. However, the division achieved operating income of $ 1.1 billion, just $ 19 million less than the third quarter last year.
AT & T attributed the losses of its premium TV customers to a focus on profitability. "Customers introducing discount campaigns, programming disputes and competition, as well as lower gross margins due to the continued focus on adding higher value customers, all contributed to the net loss of 1,163,000 customers in this category, AT & T.
AT & T said The loss of 195,000 online streaming customers was caused by "higher prices and lower advertising activity" as AT & T phased out the discounts previously used to increase subscribers. AT & T has raised TV prices several times, though the acquisition of Time Warner Inc. in 2018 would make it possible to cut TV prices.
AT & T's group-wide revenue, including its mobile network, was $ 44.6 billion in the third quarter, compared to $ 45.7 billion a year ago. Operating income increased from $ 7.3 billion to $ 7.9 billion. "The decline in revenue from the legacy fixed-network services WarnerMedia and domestic video was partially offset by growth in strategic and managed business services, domestic mobile services and IP broadband services," said AT & T. AT & T promises no major mergers
AT & T was acquired by activist investor group Elliott Management Corp. which criticized AT & T's TV strategy and called on the company to consider selling DirecTV.
AT & T has today signed a contract with Elliott, which is not about the sale of DirecTV. However, AT & T promised to conduct a "disciplined review" of its portfolio, stating that it would make "no major acquisitions" in the next three years.
"We have thoroughly reviewed the company's three-year plan, and the move towards a supports a faster-growing, more profitable, focused and shareholder-friendly business," said Elliott in an announcement. Elliott said the deal includes "significantly improved operational efficiency with significant margin expansion" and the appointment of two new directors.
AT & T said that CEO Randall Stephenson, who is retiring, will continue to lead the business until 2020 Following the expected change of CEO, the roles of the CEO and the chairman will be split rather than being staffed by the same person, said Elliott.
As the Wall Street Journal noted, the plan also calls for AT & T to spend 50 to 70 percent of free cash flow after dividend payments on share repurchases. "Although AT & T makes concessions," Elliott has no restrictions on the ability to publicly criticize the company in the future, "the Journal wrote, adding that over the next three years, AT & T will pay off Time Warner's debt and the ratio Decrease Net Debt to 2.26X Adjusted EBITDA from 2.66X to 2.25X
AT & T faces a class-action lawsuit claiming it lied to investors about the failure of its DirecTV Now streaming The lawsuit was recently updated to include allegations that AT & T's supervisors encouraged sales reps to create fake DirecTV Now accounts and register AT & T customers for DirecTV Now, "without the Customer knows ".