AT&T Inc. shares only registered one annual gain in the past five full calendar years. Main rivals Verizon Communications Inc. and T-Mobile US Inc. achieved the reverse, with their shares each gaining in four out of the past five years.
But after years of disappointment, AT&T
is slowly winning more favor on Wall Street. The stock is currently on track to eke out a positive gain for 2022.
Part of that warmer reception could be a result of the company’s somewhat recent moves to shed its media and video businesses, leaving behind a simpler story focused on wireless. But AT&T also wants credit for the moves it’s making within that wireless business.
It should “give investors some confidence” that “AT&T’s growth performance isn’t simply from a rate card promotion or a heavy device offer,” Chief Operating Officer Jeff McElfresh said at a UBS conference Tuesday morning, according to a transcript provided by Sentieo/AlphaSense. “There’s something else that’s occurring and why AT&T is able to attract high-quality growth, add volume and generate the performance in the business.”
AT&T has gotten a rap for its promotional levels, but the company has maintained that its story goes beyond wireless deals, something McElfresh echoed Tuesday.
“The growth that we’ve experienced at AT&T, it’s not been solely because we’ve got a device promotion,” he said. “We’ve got several other actions, not the least of which is our FirstNet program in serving first responders that continues to perform incredibly well, especially in this wireless space, so I think our program is sustainable.”
Admittedly, wireless promotions are complex. Companies can offer different deals to different kinds of consumers, and sometimes throw in offers for things like free streaming services that muddy comparisons between promotions from the various carriers.
That said, in McElfresh’s view, AT&T was “not the most aggressive” with its promotions during Black Friday the company hasn’t “been the most aggressive in the market for quite some time.”
(A MarketWatch analysis of data from MoffettNathanson and Navi seemed to indicate that AT&T’s promotions for switchers were below what T-Mobile
offered, though the company’s deals for existing upgraders were higher.)
One of AT&T’s initiatives in recent quarters has been to offer the same deals for existing customers that it would give to new customers. Typically, companies would offer better deals to new customers so as to incentivize them to switch, but AT&T has said that its more simplified messaging around pricing and plans has allowed it to receive better yields on its marketing dollars.
McElfresh shared Tuesday that AT&T was “gaining attractive customers with very attractive ARPU [average revenue per user] and low churn on our products.”