A growing wireless segment has drawn distinct responses from AT&T® and Verizon Communications®. The Dallas-based telecommunications company, AT&T®, is diving into advertising and entertainment, investing big to control programming such as “Game of Thrones” on HBO® and NBA games on TNT® that the company can distribute all through its satellite, wireless, and fiber optic networks. Meanwhile, the wireless provider, Verizon®, is doubling down on upgrades to wireless networks to allow 5G’s commercial use. The media assets owned by the company sits in a unit that comprises advertising technology as well as a group of sites.
Verizon® and AT&T® are America’s biggest wireless carriers going by the overall number of customers. However, they are under pressure also to find new revenue sources past wireless services, where the room for growth is limited. Media and software companies have captured most earnings from a wireless networks-dominated economy, which both carriers realize.
“Both of them have suffered from Google envy almost from the beginning,” said the CEO of Recon Analytics, Roger Entner. “They are looking at the same facts and came up with vastly different decisions.”
The distinct strategies have driven contrasting stocks, once used to move in pretty much the same path. The shares of AT&T® have slid 10 percent over the last year. The shares of Verizon® have gained 30 percent over the last twelve months.
The path of AT&T® toward media partly stemmed from its experience of serving the smartphone economy over the last ten years. The AT&T® CEO Randall Stephenson pointed out that while it reaped the advantages of aggressive wireless network investments, tech companies such as Apple took a larger share of spoils. “Congratulations: You invested a fortune, and Apple becomes the most profitable company in the free world,” Stephenson recalled. “This is why, two years ago, I said, ‘I don’t want to run that same play again.’”
The largest transaction of Verizon® to date was their wireless’ full acquisition. In recent months, executives made it a point to investors and analysts that they are mainly focused on expanding the 5G network of the carrier, which will make more revenue by powering fresh technology used in hospitals, factories and cities.
Verizon® told investors that it is not interested in acquiring a content creator. Instead, the company is offering its initial 5G subscribers live channels, shows and movies via streaming partnerships with YouTube TV and Apple TV.