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12/18/09
12/17/09
12/17/09
Though, I'm glad I'm with Verizon, because AT&T is as greedy as Goldman Sachs.
12/17/09
12/17/09
This is the same as politics, it's not which one is the best, it's which one sucks less.
Verizon sucks less.
12/17/09
12/17/09
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12/17/09
Didn't notice that until you said that. LOLOLllolLolololl!!!!111!!1!
How dumb is AT&T? VERY VERY DUMB THAT'S HOW DUMB. lol
12/17/09
Cash and Cash equivalents may increase, but thats because companies have to protect their liquidity in recessions like this. Companies that don't have idle liquidity can get crushed in a matter of days. If AT&T ended up locked out of commercial paper markets, they could burn through that 4.375 billion in a matter of days.
Also, increasing cash and cash equivalents could easily be a sign that AT&T is either preparing to: buy another provider, or build more capacity into the network. They may just be waiting for more clear signs that consumer spending is recovering.
2008 and 2009 were not good years to be shoveling cash out the door for long term investments.
12/17/09
12/17/09
They could also be in the planning stages of a big expansion, and letting cash build up to be able to lay down some hefty amounts at the initiation of a plan to expand, in order to attract creditors who will want them to put out what amounts to down payments on collateral for large loans.
Business investment takes time to plan. If they did it haphazardly that would be even more disasterous than not doing it at all.
12/17/09
- as a telecom provider whose customers are locked into long-term contracts, the company has a very stable, predictable cash flow stream. There is very little uncertainty. As a result, it is less dependent on commercial paper markets than companies such as GE, which fundamentally rely on short-term credit markets to fund manufacturing, inventory, etc
- As a wireless provider, at&t wireless is in a high growth industry. I can say with pretty good certainty that their business will not be crushed by the declining economy. The numbers have shown this. And in any event, it is backstopped by customer contracts.
- The short-term debt markets have been buoyed by the TALF program run by the government. The US government will not allow these markets to shut down.
-Long term credit is more a problem for sure, but the company is printing money. They may not be able to lever up the ass, but i am sure they can find or roll over some of their debt when it comes due.
12/17/09
AT&T is in a high growth industry you are right about that. but 2008- and 2009 were years where there was no certainty as to what would happen economically in the future. Even high growth industries will start to suffer if unemployment creeps high enough. Especially since demand for higher end higher margin plans is probably quite elastic. If AT&T extended its cash on the basis of those assumptions and thing had taken a turn for the worse ... kersplat! It appears that won't happen but the fear that it would from mid 2008 to mid 2009 was extreme.
AT&T still relies on short term debt markets when making initial outlays on construction. At the time AT&T stopped spending, the government had not created TALF. They stopped spending at the end of 2007 and in mid 2008 no one knew if we were headed for The Great Depression - the Remix, or a mild recession.
I'd agree with you about the fact that AT&T is in high growth industry. But if you look at stock prices during the worst of 2008 and 2009 it becomes clear that no one was certain about the future value of the industry.
12/17/09
12/17/09
Sure they need to worry about a downturn in consumer spending along with everyone else: people may decide that it doesn't make sense to spend $100 a month on a cell phone plan when they can't pay rent. But you know how to make absolutely dead sure that people won't pay them $100 a month? By having a shitty network that makes people hate their phone and AT&T, count down the days until they can trade it in for a Droid, and vow never to use AT&T again. They needed to balance a need for medium-term cash with a desire for long-term customer loyalty, and in my estimation they've done a complete f*ckup of a job.
12/17/09
12/17/09
AT&T is thriving because things didn't go as badly as everyone feared they would. But its pretty easy to see why AT&T has taken the tack they did, considering the high amount of uncertainty.
12/17/09
In a way at&t is a case study of the way most companies have acted in the recession. Don't spend, stay conservative. It's actually part of what has made the recession worse.
From a management perspective, I don't think I would have done too much differently. But from a consumer's perspective, they suck. I understand their reasoning for not investing as much during a massive recession, but they are still really really expensive. The text message thing pisses me off so much. At that point, it just becomes gouging.
Sometimes I wish the pursuit of profit didn't come at the expense of the consumer.
12/18/09
12/17/09
Seriously .. Was there one of us in geek land that screamed with little girl joy when the iPhone was announced on their network? Are any of us surprised by how all of this has turned out? This is AT&T, folks -- this is what they do. They are good at it.
12/17/09
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12/17/09
The only "incentive" AT&T can "offer" is either discontinuance of unlimited data for new contracts or termination of it across the board.
The former will lead competitors to tout unlimited data as a selling point and the latter will enable everyone with unlimited data an opportunity to jump ship without an ETF.
In the industry, I believe this is called "up shit creek".
12/17/09
And there's no paddle app for that on your iphone either..
12/17/09
Awww, who am I kidding.
#attsucks
12/17/09
At some point in a network buildout, capex begins to taper off. Like most capital assets, ongoing maintenance and enhancement costs are lower than construction costs.
It just so happens that the iPhone launched as AT&T's 3G investment was peaking.
12/17/09
12/10/09
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12/14/09