The new CEO of AT&T (T) says he is looking outside the US for acquisitions. His company has already sucked up every regional Bell except Qwest (Q) and Verizon (VZ). He would not comment on whether his company would like at a very large target, particularly cell service provider Vodafone (VOD).
The fact that the company is talking about drawing more of its business from outside the US may be a concession to the risk that AT&T’s three domestic businesses are facing.
Landline customers are dropping fairly quickly. Everyone from Skype to cable companies is offering VoIP, and its price point puts real pressure on AT&T, making it difficult to prevent customer erosion.
Wall St. loves AT&T Wireless. The cell service provider part of the company is growing and drives excellent cash flow numbers. But, has new 3G networks and WiMax come to market, AT&T’s cell business could face the same issues that it has now with landlines.
The final leg of AT&T’s plan going forward is its bundled broadband, TV, and voice product for consumers. Although the package certainly works fine, AT&T has not been able to convince investors that there is a clear path to steal this business from the cable companies.
Looking overseas is looking like a good idea.
Douglas A. McIntyre
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