The battle is about to begin, and AT&T will win with the brand.
In the 12 years since divestiture, the local bell companies have been incredibly unsuccessful at the seemingly simple task of establishing their brand. Surveys show that today, over 30% of American households are under the mistaken belief that they get their local service from AT&T. Furthermore, they overwhelmingly state that AT&T is the company of choice to bundle and deliver local, Long Distance, internet, cable and mobile services.
That kind of brand recognition and magnetism is an incredible weapon in the wars to come - especially against a company (SNET) who sounds like something that came out of your nose.
I am an employee of AT&T and have studiously avoided owning any stock until now. For many years under Allen's tenure, AT&T has been on a treadmill focusing short term earnings. This mentality has penetrated the management culture, and led to the current situation in which the company has not invested in the future and is disappointing Wall Street every quarter.
John Walter arrived at this point and, understandably, wants to start off on the right foot. Therefore, he has done the right thing for his career, but also for AT&T. He's sent a signal internally that the focus on short-term thinking is over, he's revised downward the expectations on the street, he's announced investment programmes which will cost money but position the company for growth, and finally he's positioned himself to realise the potential of AT&T and regain credibility with Wall Street.
We're at the bottom now - time to buy! |
