new York The room at New York's Conrad Hotel is filled to the last row. Analysts, investors and journalists have come to the words of AT & T– CEO Randall Stephenson, who is the first Chairman of the Board of Directors of the Communacopia Conference Goldman Sachs heralds. For Stephenson, it is the first public appearance since Paul Singers hedge fund Elliott bought a few days ago at AT & T and made in an open letter directly to the Group demands.
Actually, the Goldman Sachs conference is routine for the 59-year-old. The CEO, who has been in office since 2007, is speaking here for the eleventh time. But this time he is under so much pressure as never before.
Because Elliott criticized the billionaire acquisitions of the satellite provider DirecTV and the media company Time Warner, Singer thinks Stephenson should focus on his core business of telephony. Especially since the German Telekom subsidiary T-Mobile US with their planned merger with Sprint is currently working on a new, powerful mobile service provider that could be dangerous to AT & T in 5G technology.
The tall executive does not talk much about the acute issue, but addresses the Elliott letter directly: “Some points make a lot of sense. Others less, “says the telecom veteran. “But they're smart guys, are not they?” He says, grinning a little bit cramped. Then Stephenson sets off with a long defense of his strategy.
Leaning back on his stage chair, his legs crossed, the CEO is self-confident. It's right to offer more content as a provider of distribution channels thanks to Time Warner. “If you had asked me that five years ago – in the old world – I would have had my doubts,” he explains. But in today's world, it makes a lot of sense to distribute the content of CNN, HBO or Warner Bros across all channels. “I believe in the old sentence: Content is King. But I also believe that distribution is important, “he clarifies.
Stephenson also defends John Stankey's election as Chief Operating Officer (COO). Stankey is known as his close confidant and has positioned himself as a potential successor. For investors, he is controversial. “John broke up the silos at Time Warner Media and he's got a clue about telecommunications,” says Stephenson. As a result, he was “at the top of the list” for the post of COO.
“Check that box!” – he keeps shouting to analysts in the room when he lists what AT & T has achieved: whether it's the advances in 5G technology, its plans for its own streaming service HBO Max or the fact that AT & T is now HBO's largest distributor due to its 170 million customer relationships.
Share price is up again
More than a year ago, the AT & T boss got the okay to buy Time Warner for $ 85 billion. The acquisition was not only extremely expensive. The results are still coming. Although the share price has risen again recently, it is still far from the euphoric heights after the first announcement.
Regarding the mobile business and the planned merger of T-Mobile US and Sprint, Stephenson gives in calmly. The situation is still too unclear, as the Attorney General of 17 states against the merger complain: “We have not seen anything like this,” he explains, “We do not know what happens.”
But even if the deal goes through and if T-Mobile and Sprint give licenses to Dish, so that a new mobile service provider is created, Stephenson is calm: “We are premium premium,” he said. T-Mobile US will need two to three years for integration, he estimates. The same timeframe applies to the construction of a new brand of Dish.
Some investors at the conference in New York do not see the situation quite so calmly. “AT & T will have to dress warmly when T-Mobile and Sprint enter the 5G market together,” says one investor. However, he believes that Elliott's criticism of Stephenson is not fully justified and that the combination of content and networks may well make sense.
An investor sees the biggest problem in that the longtime AT & T boss does not understand “what the millennials want.” Too much AT & T trying to use Time Warner to place old content with advertisements across multiple channels. “We are the generation Netflix, We want the content without advertising as a retrievable list. If he does not understand that, he still lives in the old world. “
More: With his criticism of the strategy of the AT & T conglomerate, the activist hedge fund investor Elliott has only the quick profit in view, says Handelsblatt correspondent Katharina Kort.
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