AT&T reportedly considering TV U-turn

A report is suggesting AT&T is mulling over the prospect of selling its DirecTV assets as pressure mounts on the management team.

With the Elliott Management vultures circling overhead and an investor lawsuit hitting the New York District Court, AT&T is reportedly considering its options. Wall Street Journal sources are suggesting a divestment could be on the cards, a humbling move for AT&T executives who are seeing their diversification strategy crumble before their very eyes.

Although the sale of DirecTV is still a slim possibility, some executives might believe this is the best way in which to save their jobs. To demonstrate the scale of this potential outcome, cast your mind back to May 2018, a critical point during the AT&T defence of its Time Warner acquisition.

While the Department of Justice was looking for means to block the acquisition, for a brief moment, a concession was offered to the team; divest DirecTV assets and we’ll OK the Time Warner deal. This was almost immediately shot down by CEO Randall Stephenson, the purpose of Time Warner was to bolster the DirecTV offering.

This is the conundrum which the executive team is facing. The long-term business plan is sound; a purchase of an excellent content creation business to marry the delivery platform could create a notable share of the entertainment segment. However, the short-term threats might well force the team into a re-think.

Last week, a coalition of investors filed a lawsuit, naming a series of AT&T executives as defendants, accusing the telco of misleading executives over the performance of DirecTV. As the success of the DirecTV acquisition was being used to justify the Time Warner acquisition, the investors seemingly feeling violated, believing the gains were exaggerated or at least the longevity of the gains.

Perhaps more worryingly however was the emergence of Elliott Management. This vulture fund specialises in seeking undervalued businesses and introducing radical changes to increase dividends and share price. More often that not, when Elliott Management gets its claws into a business, executives usually find themselves heading towards the exit and a major restructure of the strategy is put in place.

If the sources are to be believed, this might well be a move towards appeasing the criticism before the HR department starts drafting emails.

What is worth noting, is this might well turn into nothing. Rumours of this magnitude might well be true, but the idea of discussing a divestment and then actioning these ambitions are two very different points of consideration. One question which remains unanswered is who would buy the assets?

AT&T is not going to be selling the business for pennies on the pound, therefore the potential purchaser will have to have a considerable bank account. It is also less clear whether this is a complete divestment or just the satellite assets. If it is just the ‘traditional’ content business, with the streaming side attached, this looks much less attractive to a potential investor.

One option could be a sale to Dish, a rival satellite TV provider. A merger of the two entities has been quashed by competition authorities in the past, though as there is now much larger variety of content options for the consumer it might be a possibility. That said, considering Dish is working through the $5 billion acquisition of the Boost prepaid mobile brand, it might not have the appetite for another large transaction.

Although this is a move which many AT&T executives will struggle to stomach, perhaps survival instincts have kicked-in.

The acquisition of DirecTV and Time Warner was supposed to be a means of diversifying the business, chasing the ever-increasing dollars which are being spent on digital entertainment by consumers and digital advertising by corporates. This was supposed to be a move to future-proof the business and drive growth opportunities.

Without DirecTV, the entertainment unit looks quite hollow. The AT&T business will look much more like a traditional telco, one which is built around the decreasingly profitable and increasingly commoditised business of connectivity. Many companies are looking to leverage their relationship with customers with additional services, and for AT&T, this was supposed to be video.

What is worth noting, is the divestment looks unlikely at the moment. It might happen, but it might well be more sensible for a spin-off and partial divestment. This would recover funds, partially satisfying the vultures at Elliott Management, while also keeping some skin in the game. It would also allow for the appointment of a new management team, perhaps one which is more aligned with content as opposed to the current set-up which is primarily focused on telco.

However, the ability of Elliott Management to cause chaos in a business when it has outlined its intentions should not be underestimated. This is a firm which has a track-record in getting its own way and raising support from other investors. Above all else, the AT&T management team should be very concerned about their future at the telco.

AT&T sued for massaging DirecTV figures

If there is a headache in the shape of activist investor Elliott Management already, AT&T executives will be reaching for the aspirin once again as investors sue over suspect figures.

Filed in the US District Court for Southern New York, Melvin Gross is the man leading a coalition of investors to sue AT&T, suggesting the management team misled investors over the performance of its DirecTV video products. The massaged figures might be viewed as an attempt to save face (as well as jobs), though the lawsuit also suggests executives were attempting to justify the incredibly expensive acquisition of Time Warner through nefarious means.

“Moreover, several of the Executive Defendants had strong personal interests in promoting the success of DirecTV Now in order to persuade the market of the logic behind the Time Warner Acquisition,” the filing states.

“The failure of DirecTV Now, prior to the closing of the Acquisition, could have jeopardized the transaction, a result that would have been disastrous for the Defendants.”

Through a combination of fake email addresses and additional charges for customers without consent, practises which were allegedly encouraged by managers, AT&T is effectively accused of fraud. Investors are also suggesting the executive team presented misleading numbers down the omission of promotional numbers. 500,000 net adds disappeared once a three month for $10 deal disappeared, though this risk was apparently not appropriately communicated.

By hyping the performance of DirecTV Now, investors might be encouraged to double-down on momentum in the content unit, funding another monstrous acquisition. However, as the lawsuit states, investors might not be buoyed to spend $108.7 billion (including debt) should the 2014, $67.1 billion DirecTV purchase be viewed as a failure.

This is somewhat of a conspiracy theory, though the DirecTV Now numbers were not anywhere near as attractive during the financial earnings call once AT&T was committed to the Time Warner transaction. As you can see from the table below, the timing is a bit suspicious:

Period Net adds (loss in brackets)
Q2 2019 (168,000)
Q1 2019 (83,000)
Q4 2018 (267,000)
Q3 2018 49,000
Q2 2018 342,000
Q1 2018 312,000
Q4 2017 368,000
Q3 2017 296,000

The Time Warner acquisition was first announced in October 2016 and closed in June 2018. In the financial earnings call following the closure of the transaction (Q3 2018), the DirecTV gains started to crumble away.

With the aggressive expansion and success the AT&T executive team was suggesting up-to Q2 2018, investors will of course have been enthusiastic about adding to the momentum. On the other side, you can see why some are reasonably irked by the reality of the situation. It does appear the fact many of these gains were either irresponsibly attributed or unlikely to be anything more than short-term gain.

Although DirecTV is the focal point of the lawsuit, the Time Warner acquisition is the central cog which the saga flows around.

The content strategy from AT&T is relatively simple. The DirecTV acquisition offered a mobile-friendly content delivery model, and the Time Warner purchase offered a horde of content allowing the telco to compound gains. Both, theoretically, work independently, but the combination is more attractive if you have a bank account big enough to fund the expansion.

However, as the lawsuit suggests, investors might be a bit sheepish in giving the greenlight to a $108 billion acquisition if the ROI from the $67 billion purchase are not living up to the original promise. The AT&T theory and business model is theoretically sound, though if the lawsuit is successful, heads may roll due to the route the management team took to get to the finish line.

The content bet from AT&T is already looking suspect, and this lawsuit will not help the situation.

Alongside this filing, the management team is also under attack from Elliott Management, the vulture fund which specialises in restructuring businesses, promoting a shift towards a utilitised business model and realising short/mid-term gains through increased dividends and share price increases.

The activist investor has taken a $3.2 billion stake in AT&T and has recently sent a letter to shareholders attacking the AT&T strategy and competency of the management team. The content business has come under-fire, with Elliott Management pushing for divestments and a more stringent focus on traditional connectivity products. It’s a strategy which could force the telco down the utilitisation path, something which is unlikely to benefit the business in the long-term.

The emergence of this lawsuit certainly aids the Elliott Management case, however we think the timing is more coincidental. Some might suggest the vulture fund is behind the lawsuit, but we think it is more a case of pleasant timing.

For the AT&T management team, this is a potential disaster. Not only do these executives have an aggressive activist investor calling for their heads, they have now been named in the lawsuit, with the complainants suggesting they encouraged under-handed tactics to directly mislead the market. This is turning into a very uncomfortable month for the AT&T management team.

AT&T gets streaming with HBO Max

Gone are the days when the consumer could get all the content they wanted in one place as AT&T’s WarnerMedia joins the streaming landgrab.

With Netflix, Amazon Prime, Hulu, Disney, HBO and numerous other streaming services on the market before too long, the fragmentation of content is looking like it could be a serious problem for the consumer. Whether splitting the spoils has an overarching negative impact on the segments profits remains to be seen, but customers wallets can only be pushed so far; how many streaming services can each customer be expected to have?

That said, AT&T is in a strong position with this proposition. In HBO, it owns a lot of promising content already, playing into consumer nostalgia, and it does seem to be heading in the right direction in terms of original programming.

“HBO Max will bring together the diverse riches of WarnerMedia to create programming and user experiences not seen before in a streaming platform,” said Robert Greenblatt, Chairman of WarnerMedia Entertainment and Direct-To-Consumer.

“HBO’s world-class programming leads the way, the quality of which will be the guiding principle for our new array of Max Originals, our exciting acquisitions, and the very best of the Warner Bros. libraries, starting with the phenomenon that is ‘Friends’.”

With the service set to debut in Spring 2020, AT&T is promising 10,000 hours of programming from the outset. Full series of ‘Fresh Prince of Bel Air’, ‘Friends’ and ‘Pretty Little Liars’ will feature in the content library, as well as new dramas such as ‘Batwoman’ and ‘Katy Keene’.

Looking at future Max Original series, the list is quite extensive. ‘Dune: The Sisterhood’ is an adaptation of Brian Herbert and Kevin Anderson’s book based in the world created by Frank Herbert’s book Dune. ‘Lovecraft Country’ is a horror series based on a novel by Matt Ruff. ‘The Plot Against America’ will be a reimagined history based on Phillip Roth’s novel.

The ingredients are all in place to ensure AT&T makes a sustained stab at cracking the streaming market which has been dominated by the OTTs to date. There are a couple of questions which remain however.

Firstly, pricing. Can executives price the service competitively while also sustaining investments in content? Secondly, experience. Will the platform meet the high-expectations set by consumers thanks to the high-bar set by Netflix? And finally, culture. Will AT&T allow WarnerMedia to operate as a media business or will it impose the traditional mentality of telcos onto the business?

AT&T has bet big on the content world and it can ill-afford to fluff its lines on its debut. Having signed an $85 billion deal to acquire Time Warner and spent what seems like decades battling various government departments to authorise the transaction, the telco will need to see some ROI sooner rather than later.

The question is whether the momentum in the streaming world can be sustained. Platforms like Netflix, Hulu and Amazon Prime were attractive in the early days because there was consolidation of content onto a single library. With more streaming services becoming available, the fragmentation of content might well become a problem before too long. Consumers will have to make choices on what service to subscribe to, limiting the profits of the individual providers.

The days of subscribing to everything might be a thing of the past before too long; wallets can only be pushed so far.

Diversification into profitable segments is certainly a sensible strategy in the days of meagre connectivity profits, but $85 billion is a lot to spend on a hunch.

Trump opposition to AT&T/Time Warner deal was personal revenge – report

Few would consider Donald Trump a conventional President but attempting to block AT&T’s acquisition of Time Warner to get revenge for poor coverage would be another level.

Trump’s distaste for CNN is widely known, though The New Yorker is now claiming the President’s opposition to AT&T’s acquisition of Time Warner was little more than a personal vendetta against the newsroom for poor coverage as opposed to an ideological protest against market consolidation. We’re not too sure whether to be surprised by such an accusation, such is the dramatic impact to the status quo Trump has had on politics.

It is claimed President Trump was attempting to pressure the Department of Justice into blocking the monstrous acquisition as revenge for the negative news coverage on Time Warner-owned CNN. According to The New Yorker, in a meeting with Trump’s former lawyer Michael Cohen and former Chief of Staff John Kelly, the President said:

“I’ve been telling Cohn to get this lawsuit filed and nothing’s happened. I’ve mentioned it fifty times. And nothing’s happened. I want to make sure it’s filed. I want that deal blocked.” Gary Cohn was, at the time, the Director of the National Economic Council – the main Presidential policy-making forum for economic matters.

The New Yorker then goes onto to claim Cohn resisted the push from the President, with aides suggesting he did not understand the ‘nuances’ of antitrust and competition law.  The Department of Justice did eventually file its complaints, though these were eventually overturned by a Federal Judge, with the DoJ then turning to the court of appeals.

It’s worth noting is that The New Yorker is not a friend of President Trump. Owned by Conde Nast, the editors are apparently given complete freedom from the parent company, with the publication having endorsed Barack Obama in 2012 and Hillary Clinton in the 2016 Presidential Election. The main topic of the New Yorker piece was an investigation into the relationship between right-leaning Fox News and President Trump.

While there certainly is a left-sided slant, it is also a highly respected title which has never failed a fact check according to the Media Bias/Fact Check website. This should not be considered as unusual as there are very few (if any) mainstream media titles in the US (or worldwide for that matter) which can honestly state they are impartial; there is always some sort of political bias.

What this does indicate is the growing, and not always positive, influence of politics of the TMT segments. Although politicians might have been slow off the mark in regard to the digital euphoria, they are certainly catching up quickly. Mass market communication has dramatically shifted away from traditional media in recent years, and the politicians are following the wake.

For AT&T, this is a headache which it will be happy to put in the past. Last week, a US Court of Appeals for the DC Circuit rejected an appeal from the Department of Justice challenging the Federal Judge which overturned its complaint against the acquisition. The DoJ claimed AT&T would have “both the incentive and the ability to raise its rivals’ costs and stifle growth of innovative, next-generation entrants”, though the Federal Judge and the appeals court dismissed the antitrust claims.

The number of lawsuits, counter-lawsuits and appeals has now created an incredibly complicated timeline, but there does not seem to be many routes of resistance left. Sooner or later, AT&T will be able to start figuring out how to recoup the $107 billion it decided to spend on Game of Thrones.

Time Warner acquisition resistance could turn ugly for Trump

President Donald Trump’s administration certainly has been a different shade of politics for the Oval Office, though actions and alleged prejudice could come back to haunt the Commander in Chief.

Despite being proclaimed a resounding victory for the Republicans, the mid-term elections could have gone a hell of a lot better. With the House of Representatives swinging back into the hands of the Democrats, not only will Trump find passing his questionable legislation more difficult, but his actions over the first two years of the Presidency could be called into question.

In an interview with Axios, California Congressman Adam Schiff, who is also the Ranking Member of the House Intelligence Committee, suggested an investigation into the President would now be able to make a material impact because of the swing of power across the aisle. The President’s tax records will once again become a topic of conversation, though the appropriateness of his objections to AT&T’s acquisition of Time Warner will also come under scrutiny, as will his seemingly personal vendetta against Amazon CEO Jeff Bezos.

While the President’s actions have constantly been condemned by critics and political opponents, there has been little opportunity to do anything considering Trump’s political foundations. With majorities in both Houses of Congress, the Republican party have been able to block, or at least stifle, any investigations. However, with last week’s mid-term elections swinging the House of Representatives into a Democrat majority things might be about to change.

Trump’s opposition to the AT&T and Time Warner deal has been widely publicised, dating back to the Presidential campaign trail. Some have suggested his hatred for Time Warner owned CNN is the reasoning behind the probes and appeals against the acquisition, though this will come under question through the investigations.

“We don’t know, for example, whether the effort to hold up the merger of the parent of CNN was a concern over antitrust or whether this was an effort merely to punish CNN,” said Schiff.

While the deal has been greenlight by District Court for the District of Columbia Judge Richard Leon, the Department of Justice is appealing the decision, suggesting Judge Leon is ignorant to the facts and the economic implications of the deal. It has been reported the Trump administration has been pressuring the DoJ to pursue the appeal and attempt to derail the acquisition.

Looking at the spat with Jeff Bezos, this has been tackled on several fronts. Not only has President Trump constantly berated the excellent reporting by the Washington Post, privately owned by Bezos, Trump has been targeting the tax activities of Amazon. Back in March, Trump tweeted he would be tackling the tax set-up at Amazon, sending share price down 2%, while he has also been reportedly pressuring the Post Office to charge Amazon more, despite the eCommerce revolution seemingly saving the service with the vast increases in package delivery.

These are just two examples relevant to the telecoms and technology industry, but the Democrats are seemingly going for the throat. Tax records will be called into question, as well as reports the President blocked the FBI from moving its headquarters because it would negatively impact business as one of his hotels, located opposite the bureau’s offices.

For the moment, this seems to be nothing more than political posturing, as while the statements might appease those in opposition to Trump, they are nothing more than statements. The Democrats will not assume their majority in the House of Representatives for two months, a long-time in the lightly-principled world of politics. Much could change during this period.

What the change in political landscape could mean more than anything else is a bit more stability. President Trump has been praised by his supporters as a man of action, though actions are of questionable benefit to business executives who crave legislative, regulatory and policy consistency. Only with the promise of consistency can businesses made long-term strategies to conquer the world, but with Twitter a constant threat of change it is understandable some are nervous.

With the Democrats in control of the House of Representatives, Trump will find it much more difficult to force through any controversial or overly aggressive policies, though there is also the threat of legislative standstill. The US political landscape has certainly been an interesting one over the last two years, though it could become even more interesting over the next two for completely different reasons.

AT&T suggests Dish and DoJ are collaborating

With AT&T’s WarnerMedia and Dish arguing over a distribution deal, one AT&T executive has suggested Dish and the Department of Justice are collaborating to reverse the green light on the Time Warner acquisition.

The conspiracy theory is hitting new highs here. AT&T is effectively accusing Dish of actively working to create a no-deal situation in negotiations with WarnerMedia over rights to air HBO content. Although having HBO and Cinemax channels go dark on the Dish service would have a negative impact on business, it does coincidentally work well for the Justice Departments case appeal against the Time Warner merger.

WarnerMedia have been in negotiations over the right to air content, with it claiming it offered to extend the previous contract while negotiating but Dish declined. As a result, HBO content has disappeared from the Dish service.

“Dish’s proposals and actions made it clear they never intended to seriously negotiate an agreement,” said Simon Sutton, HBO President and Chief Revenue Officer, in a statement to Reuters.

With the appeal based on the grounds the AT&T acquisition of Time Warner would offer it undue control and influence in the industry, stagnant negotiations certainly add credibility to the objections from the Department of Justice. Manipulating the playing field however, as AT&T is accusing Dish of, is a serious no-no when it comes to the courts.

“This behaviour, unfortunately, is consistent with what the Department of Justice predicted would result from the merger,” said a representative of the Department of Justice. “We are hopeful the Court of Appeals will correct the errors of the District Court.”

“The Department of Justice collaborated closely with Dish in its unsuccessful lawsuit to block our merger,” WarnerMedia responded. “That collaboration continues to this day with Dish’s tactical decision to drop HBO – not the other way around. DOJ failed to prove its claims about HBO at trial and then abandoned them on appeal.”

The $85 billion acquisition of Time Warner proved to be a messy affair for AT&T. While some would have expected some resistance from the industry, the objections of President Trump seems to have encouraged the Department of Justice to chase down every lead, and make life as difficult as possible. The Department of Justice’s appeal against the approval of the deal, is effectively built on the assumption Judge Richard Leon didn’t know what he was talking about.

Publicity stunt? Monopolistic ambition? Nefarious schemes? Whatever the basis of this story, more fuel has been added onto one of the longest running sagas in the telco industry.

DoJ appeals AT&T/Time Warner deal on grounds of ignorance

The Department of Justice has attacked a trial judges approach and methods when reviewing AT&T’s much debated acquisition of Time Warner, in it’s against the greenlight for the deal.

AT&T closed it’s $108 billion acquisition of Time Warner two days after District Court for the District of Columbia Judge Richard Leon gave his seal of approval, though the Department of Justice is not done yet. An appeal has been launchedx      , arguing competition would be distorted in the pay TV market as a result as AT&T would have a bargaining advantage over rivals, with the main focus of the appeal seemingly being directed at the Judge Leon.

“The district court held otherwise, but only by erroneously ignoring fundamental principles of economics and common sense,” the appeal document states. “These errors distorted its view of the evidence and rendered its factual findings clearly erroneous, and they are the subject of this appeal.

As you can see from the statement above, the Department of Justice seems to be claiming Judge Leon was not able to consider the long-term economic impact of the acquisition of competition, but also has found issue with the court made the ‘vast majority’ of its evidentiary rulings during sealed bench conferences and declined to release the transcripts of these conferences to anyone during the trial.

“The district court substantially constrained the government’s presentation of evidence showing that the merged entity would have greater bargaining leverage,” the appeal reads.

Part of these discussions included evidence which the government would have wanted access to, AT&T’s own analysis of the potential competitive impact of the acquisition for example, but also that Judge Leon dismissed public FCC filings made by AT&T and DirecTV explaining the potential competitive harm from vertical integration, refusing to treat the documents as relevant submissions. The Department of Justice also argues it was not given enough air-time to question economic experts or evidence presented by AT&T.

The implication seems to lean on the idea of bias. Although it has not been directly said, the Department of Justice seems to be hinting Judge Leon favoured AT&T and was not able to offer an independent evaluation of the saga.

While this is a massive acquisition, vertical deals are not unusual in the technology industry, in fact, some might suggest it is the norm for growth. With big ticket acquisitions becoming more common in the industry, some might suggest the Department of Justice’s opposition to the deal might be more political than economical. President Trump’s distain for Time Warner owned brands are no secret, a public hatred which might be fuelling the theories.

US DoJ throws $85 billion spanner in the works of AT&T-Time Warner

The US Department of Justice has decided to appeal the June 12 court ruling allowing AT&T’s $85 billion acquisition of Time Warner, it announced late on Thursday.

In a brief Notice of Appeal filed on July 12, the DoJ notified the District Court that it intends to bring the case to the Court of Appeals against the ruling that will allow AT&T’s planned acquisition of Time Warner to go ahead with no restrictions.

The US government, which had until August 12 to ponder an appeal, took a month to decide it would lodge an objection to the mega-acquisition. US entertainment industry news site Deadline sourced a copy of the Notice, signed by Craig Conrath, who was leading the government’s legal team during the trial. It doesn’t elaborate on the grounds upon which the appeal would be lodged, but the decision to appeal seems to have caught AT&T by surprise.

“The Court’s decision could hardly have been more thorough, fact-based, and well-reasoned,” David McAtee, the operator’s General Counsel, said in a statement. “While the losing party in litigation always has the right to appeal if it wishes, we are surprised that the DOJ has chosen to do so under these circumstances.  We are ready to defend the Court’s decision at the D.C. Circuit Court of Appeals,” he blustered.

The ramifications of the potential appeal could hardly be greater — not only regarding the future of a newly-created WarnerMedia business, and whether it might need to decouple from its parent company, but also for the whole telecom and media industries. The boardrooms of Comcast and Disney will be full of sweaty palms (yuk!), as the outcome of the appeal will set a precedent for future vertical integration deals, including their bidding war for 21st Century Fox.

If the DoJ was to win the appeal, the US Solicitor General could bring the case to the Supreme Court, where the judges generally siding with President Trump are in the majority. Since the days when he was a candidate, Mr. Trump has been a vocal opponent to the merger, citing the danger of “too much concentration of power in the hands of too few.” However, such a decision would not be without a twist: Eriq Gardner, the Senior Editor at The Hollywood Report, discovered in a disclosure paper that John Roberts Jr, one of the Supreme Court Chief Justices, still holds Time Warner shares.

AT&T has been moving very fast after the June 12 ruling to integrate the two companies, from appointing executives to stamping its authorities over HBO, although it has decided to leave Turner Broadcasting, the owner of CNN among other assets, independent until February 2019. However, it has already broken at least one promise related to the deal: instead of making the service more affordable, it just raised the monthly bill for its DirecTV Now service by $5.

AT&T reviews Time Warner acquisition and updates Q2 outlook

AT&T execs took the opportunity to provide a general corporate update at the recent Wells Fargo Securities 2018 Telecom 5G Forum.

The main bit focused on a recap of the rationale and outcome of the Time Warner acquisition. It is the culmination of a strategy to build a modern media company around four critical elements, announced CEO Randall Stephenson and CFO John Stephens. Those elements are:

  • Premium content with wide distribution. HBO, Turner and Warner Bros. combined with targeted digital properties like Bleacher Report and AT&T’s investment in Otter Media have the potential to drive viewer engagement to new levels.
  • Direct-to-consumer relationships. AT&T has more than 170 million D2C relationships across wireless, video and broadband, which provide valuable insights on how the company delivers content, what content it distributes and how it distributes that content.
  • Advertising technology. AT&T’s D2C relationships give the company insights regarding what customers are watching, where they’re watching it and at what times they’re watching. These insights can create incredible value for advertisers.
  • High-speed networks. These networks must be able to deliver premium content to whatever screen the customer demands at the lowest cost per megabyte possible.

There was inevitably lots of talk of synergies and Stephenson seems to be especially excited about the advertising opportunities now available to AT&T, where other lovely massive M&A concepts such as scale, efficiency, reach, etc come into play. They will build a real-time exchange for premium video advertising coordinated across mobile devices and TV screens which, as we’re seeing, is a nice earner.

In other news AT&T reiterated its desire to reduce its debt (not doing anymore M&A for a bit might help), and says a lot of its capital-intensive projects, such as US fibre and Mexican LTE, are already well underway. It also reckons there will be some nice savings from all its SDN investments, that the strengthening dollar will hit its international revenues and that wireless revenue growth will be flat.