Inevitably, some will compare Verizon and AT&T third quarter 2018 results and conclude something broader about each company’s long term strategy. Both firms showed growth in mobile revenues, with declines in the fixed networks segments.
Perhaps the single biggest amount of change was the revenue dip in AT&T’s entertainment segment. AT&T points out the loss was affected by one-time items.
If one assumes that both firms will have to replace half of current revenues within a decade, then despite a worrisome debt load, AT&T has begun to make clear changes beyond connectivity services. Verizon remains convinced it can grow, at least near term, by focusing on connectivity services.
Each firm’s strategy fits its correct assessment of assets and opportunities. Verizon has room to grow in the “fixed network” segment by virtual of its much-smaller geographic footprint. AT&T has room to grow as a content and media company. Each strategy carries risk as well as a path to growth.
Strategically, most tier-one firms in communications or computing also must replace half their revenues about every decade. One can argue that is true in the chip business as well.
One quarter is not enough to assess how well each firm’s chosen strategy will drive creation of big new sources of revenue over the next decade.
The only certainty is that each firm might lose half its current revenue over the next decade, and each will have to find big new revenue sources to replace those lost revenues and generate growth.
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