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Broadband and Mobility

Five Things that AT&T Does Differently (and Better) Than Verizon

I just finished attending AT&T’s annual industry analyst summit. This two-day event provides the analyst community a first-hand, interactive experience with AT&T’s leadership team. As usual, the event not only offered the latest visions from AT&T, but also allowed us to hear and probe AT&T’s reasoning and approaches behind their initiatives. Here are the five things that I believe AT&T has done differently, and better, than its archrival Verizon.

1.       AT&T fights smart in the cloud service area. Instead of competing with, Google, and Microsoft in the commoditized cloud service market, it chooses to provide secure cloud connectivity solutions for enterprise customers to connect their data and software to whatever cloud services they choose to work with. Verizon is still trying to compete head-on with cloud service giants through its Terremark assets.

2.       AT&T is a big believer in video and wireless bundle. Yes, Verizon has video content and services and it launched its Go90 in 2015, but it’s mobile content lacks depth, and the OTT video service Go90 appears to be more an add-on than a true mobile TV experience. Comes AT&T, which is more interested in service bundles that tap into the cross-selling opportunities from its wireless customer base and DirectTV’s user base. According to John Stankey, AT&T’s CEO of Entertainment and Internet division, this cross-selling opportunity represents 39 million households that either have only DirectTV service or AT&T wireless service. Besides the billing convenience, bundle discounts, the key selling point will be DirectTV content on AT&T’s wireless service. After a lot of noises in the late last decade about triple-play and quad-play, AT&T appears focusing on the much simpler double play and believes in the video portability to mobile platform as the key selling point.

3.       AT&T is bolder in international expansion, and its Mexico move is a good one. There were talks about Verizon looking to deals in Canada, but we didn’t see anything materialize. In contrast, AT&T moved swiftly early this year to acquire two wireless carriers in Mexico. Although its Mexico service is now only No.3, AT&T takes an underdog view and determines to disrupt the Mexico market. With only a little over 30% 3G adoption and a vast 2G subscriber base in a 120 million-user market, AT&T’s growth potential in Mexico is substantial. Its newly appointed Mexico business leader Thaddeus Arroyo made a convincing presentation about his attack plan at the event, and his plan boosted my confidence in AT&T’s ability to execute and become successful in Mexico.

4.       AT&T executes well in the Industrial IoT market because of its approach as a trusted advisor to clients. With its success in the connected car business, AT&T now applies the similar approach to other industry sectors, building a flexible, modular IoT platform to support business customers. Its focus is not about near-term wholesales revenue or ARPU boost, but solutions to help its enterprise customers in different industries to “collect real-time operational data and improve operation process,” according to Ralph De La Vega, CEO of AT&T’s Mobile and Business Solution group. As customers’ needs evolve, AT&T can assist with its various IoT solutions and support services. In this way, AT&T not only takes a long-term view of the IoT market and prefers to grow together with their customers, but also diversify its IoT revenues from mobile data to a suite of revenue sources. With Verizon, I don’t know if they are as sophisticated as AT&T in this business.

5.       Transparency in external communications. As I said earlier, this event is a good opportunity for us analysts to learn and understand better about AT&T’s business strategy. While AT&T is opening up, Verizon appears to be less willing to share. That sentiment is shared by several analysts from other firms I spoke to during drink hours. Verizon may have great assets, a great vision and a palatable execution strategy, but AT&T does a better job in communicating and being transparent to the analyst community. This last one is clearly my personal view.

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