Summary
- The management team at AT&T continue to give good insight into the company's future and its operations.
- FirstNet, in particular, is growing nicely and should pave the way for the firm's network moving forward.
- Other insights suggest that management is thinking of some interesting steps aimed at creating value long term.
- Looking for a helping hand in the market? Members of Crude Value Insights get exclusive ideas and guidance to navigate any climate. Get started today »
Undoubtedly one of the most interesting companies on the market today is AT&T (T). In addition to proving that it can remain a cash cow despite a series of divestitures aimed at slimming down the firm and allowing management to refocus on core operations, the company has actively worked to improve its balance sheet and is preparing for the next wave of opportunities that will carry it and its shareholders into the future. Already this month, the company has surprised investors with more details, some focused on tentative plans for the future, while others are updates on current growth and restructuring initiatives. These moves, especially when all added together, go on to illustrate that the telecommunications and entertainment conglomerate offers investors with truly attractive prospects in the long run.
An update on FirstNet
One of the most recent and impactful updates provided by management this month came out on December 3rd. In a press release, the company stated that FirstNet, its answer (through a public-private arrangement) to the needs facing first responders in the US, is thriving. The last time I wrote about FirstNet in an article published in May of this year, the service had just passed 600,000 connections and 7,250 subscribers (all focused on public safety providers). Today, however, the program is far larger. According to management, FirstNet recently surpassed 1 million connections and it is now partnered up with more than 10,000 public safety agencies and organizations. This is quite a growth spurt in such a short period of time.
Perhaps more exciting here is just how big the program's exposure is. At the moment, the company considers the FirstNet rollout to be more than 75% complete. With this, it covers an estimated 99% of the US population. Now the trick is the last leg of the journey, which will involve investments made in rural and remote areas. Some of the most recent additions to its area coverage include parts of Pennsylvania, Minnesota, Wisconsin, and Virginia.
As part of its FirstNet rollout, AT&T has pledged to create and deploy certain assets that can help make its coverage more reliable when being used in emergencies. Earlier this year, the company launched Satellite COWs (Cells On Wheels) and even Flying COWs. These units could be deployed in disaster areas and were designed to provide connectivity capabilities even when other options are down or operationally stressed. Now, the company has gone a step further. In its press release, the company stated that it has just deployed its 76th fleet asset: a 55-foot aerostat (a.k.a. blimp) named FirstNet One. This device can fly up to 1,000 feet high and can provide about twice the area coverage of the company's Satellite and Flying COWs. It can remain in the air for up to two weeks at a time, and can remain fully operational in winds of up to 50 mph (miles per hour).
At the end of the day, it's uncertain just how much value FirstNet will bring to AT&T, but we do know that it has been instrumental in the company's network expansion strategy. What's more, it's already showing signs of being useful. According to management, the service has already been used more than 450 times this year for emergency situations. When the network is not being used for meeting the needs of first responders and other emergency personnel across the country, AT&T is allowed to use the network for its own operations.
