Summary
- At its core, the cash cow that comprises AT&T is its Mobility sub-segment.
- Anybody looking at it over the past few years might think the operations are stagnating or worse.
- This would be a warning sign, but when you look at the fundamentals, deep down, the picture is more bullish than that.
- Temporary issues will eventually roll off and give way to growth.
- Growth plus strong margins will create real value for shareholders in the long run.
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AT&T (T), as one of the largest telecommunications companies in the world, is a large and complicated enterprise. It has multiple operating segments, some of which have multiple sub-segments, which make up the enterprise, and each of these are important to the firm, its future prospects, and its shareholders. When you really drill down deep into the business though, while it really is an aggregation of smaller (but still very large) firms, the core of what makes AT&T the behemoth it is today is also its largest cash cow: Mobility. In recent years, growth there has been essentially non-existent, but that’s only at face value. When you consider the paradigm shift taking place in the industry, it becomes clear that growth for the business should resume, but it will take a little time.
