This morning, AT&T continues operation as a wireless communications carrier, without its WarnerMedia business unit. A transaction between Discovery and AT&T closed on Friday, with AT&T spinning off WarnerMedia and Discovery absorbing the larger WarnerMedia company to become Warner Bros. Discovery. Many, perhaps most, AT&T shareholders will receive this morning shares in Warner Bros. Discovery, depending on how they might have opted to continue their ownership of shares.
“We are at the dawn of a new age of connectivity, and today marks the beginning of a new era for AT&T,” said John Stankey, AT&T chief executive officer, on Friday. “With the close of this transaction, we expect to invest at record levels in our growth areas of 5G and fiber, where we have strong momentum, while we work to become America’s best broadband company. At the same time, we’ll sharpen our focus on returns to shareholders. We expect to invest for growth, strengthen our balance sheet and reduce our debt, all while continuing to pay an attractive dividend that puts us among the top dividend paying stocks in America.
“In WarnerMedia, Discovery inherits a talented and innovative team and a dynamic growing and global company that is well positioned to lead the transformation that’s taking place across media and entertainment, direct-to-consumer distribution and technology,” Stankey said. “The combination of the two companies will strengthen WarnerMedia’s established and leading position in media and streaming. And our shareholders will now have a significant stake in Warner Bros. Discovery and its future successes. We look forward to seeing what the WBD team accomplishes with these industry-leading assets.”
Under terms of the agreement, which was structured as a Reverse Morris Trust transaction, at close AT&T received $40.4 billion in cash and WarnerMedia’s retention of certain debt, according to a statement issued jointly by the two companies. Additionally, shareholders of AT&T received 0.241917 shares of WBD for each share of AT&T common stock they held at close, the companies said. As a result, AT&T shareholders received 1.7 billion shares of WBD, representing 71 percent of WBD shares on a fully diluted basis, the statement reads. It said Discovery’s existing shareholders own the remainder of the new company. In addition to their new shares of WBD common stock, AT&T shareholders continue to hold the same number of shares of AT&T common stock they held immediately prior to close, the companies said.
“Warner Bros. Discovery will create and distribute the world’s most differentiated and complete portfolio of content, brands and franchises across television, film and streaming,” the statement reads. “The new company combines WarnerMedia’s premium entertainment, sports and news assets with Discovery’s leading non-fiction and international entertainment and sports businesses, including Discovery Channel, discovery+, Warner Bros. Entertainment, CNN, CNN+, DC, Eurosport, HBO, HBO Max, HGTV, Food Network, Investigation Discovery, TLC, TNT, TBS, truTV, Travel Channel, MotorTrend, Animal Planet, Science Channel, New Line Cinema, Cartoon Network, Adult Swim, Turner Classic Movies and others.”
In November 2021, WarnerMedia laid off employees to cut its costs, a few weeks after the Wall Street Journal reported the company was looking to cut costs by as much as 20 percent and potentially lay off thousands of workers, according to a Variety report. At the time, WarnerMedia CEO Jason Kilar made the announcement. Last week, he himself left WarnerMedia, ahead of the spinoff of the company. What the Daily Mail called a firing spree resulted in nine top executives leaving WarnerMedia last week. All were members of Kilar’s management team, the Daily Mail said.
The media outlet reported Zaslov as having plans to weed out at least $3 billion in cost synergies by 2023, representing savings incurred by cutting operating costs after the merger.
Northrop Grumman and AT&T have entered into a collaboration agreement to research and develop a digital battle network, based on AT&T 5G and Northrop Grumman’s advanced mission systems, to support the U.S. Department of Defense (DoD), AT&T said today.
“Northrop Grumman and AT&T plan to deliver a cost-effective, scalable, open architecture solution that will help the DoD connect distributed sensors, shooters and data from all domains, terrains and forces, similar to how smart devices connect and share data in our everyday lives,” AT&T said. “This digital battle network is expected to bring together the high speeds, low latency and cybersecurity protections of private 5G networks with the flexibility and scalability of AT&T’s commercial 5G capabilities and offer a critical capability to support the DoD’s vision for Joint All Domain Command and Control (JADC2).”
“Our collaboration with AT&T brings together some of the best capabilities in defense and commercial communications to meet the evolving requirements of JADC2,” said Ben Davies, vice president and general manager, Networked Information Solutions division, Northrop Grumman. “The enhanced connectivity and networking of information that 5G provides are a great advantage in a military environment and will help the DoD in the development of high-performing and intuitive technologies that quickly and seamlessly share data across a myriad of secure networks.”
“Our 5G capabilities can help the Department of Defense achieve operational and information advantage when it matters most – protecting our country and freedoms around the globe,” said Lance Spencer, client executive vice president-defense for AT&T Public Sector and FirstNet. “By bringing our 5G services together with Northrop Grumman’s powerful avionics and defense systems, we expect to create an ideal platform to deliver DoD’s JADC2 vision.”
AT&T said the agreement establishes a joint research and development framework to prototype, demonstrate and test AT&T’s commercial 5G networking capabilities integrated with Northrop Grumman’s portfolio of capabilities that the wireless carrier said are at the forefront of military technological advancement that enable the Joint Force.
Speaking on March 14 at the Deutsche Bank Media, Internet & Telecom Conference, the chief financial officer of AT&T, Pascal Desroches, said the wireless carrier intends to grow its number of subscribers while making capital investments.
A statement from AT&T said that Desroches expressed AT&T’s growth strategy as a standalone company following the pending close of the WarnerMedia transaction.
“AT&T intends to become America’s best broadband provider, underpinned by a best-in-class network with fiber at its foundation and integrated with wireless,” the statement reads.
AT&T said that it expects to support additional wireless subscriber growth with a go-to-market strategy that would increase penetration in underserved customer segments and cross-sell wireless services into its expanding fiber footprint. It said the company would continue to optimize its cost structure via ongoing transformation initiatives, with opportunities to derive an additional $2.5 billion in cumulative cost savings over the next two years to reach a previously announced goal of $6 billion in run-rate cost savings by the end of 2023.
In addition, AT&T said it expects to maintain a total-return oriented capital allocation strategy with a focus on investing for growth, with capital investment in the $24 billion range for 2022 and 2023, and strengthen its balance sheet. At the same time, AT&T said, the company would deliver returns to shareholders via a dividend.
Desroches discussed near-term business trends.
“As already stated, the company expects to step up investment in 2022 to support its fiber rollout and mid-band 5G spectrum deployment,” the statement reads. “This investment in growth, combined with additional investment to support the ongoing rationalization of AT&T’s business wireline portfolio, is expected to drive a corresponding year-over-year increase in capital investment. Additionally, as noted during its analyst day, the company expects about $600 million in headwinds to adjusted EBITDA from its 3G shutdown costs and the absence of CAF II credits, weighted to the first half of the year and particularly the first quarter of 2022. As these headwinds abate, the company expects its adjusted EBITDA trajectory to improve throughout the year.”
Desroches also said that AT&T has continued to see healthy trends in wireless sales in the first quarter after leading the industry in postpaid phone net additions in 2021.
The Safer Buildings Coalition (SBC), an advocacy group focused on advancing policies, ideas and technologies that ensure effective in-building communications capabilities for public safety personnel and the people they serve, today said it will join the FirstNet team at AT&T during the 2022 International Wireless Communications Expo (IWCE) in Las Vegas on March 22 to give attendees an inside look at how their collaboration is furthering public safety’s network.
The SBC and First Net teams will host multiple joint speaking sessions at IWCE to highlight how collaboration is further strengthening public safety’s network infrastructure. At IWCE, Safer Buildings Coalition will be presenting the workshop titled, The Future of In-Building Communications – The Big Picture, on Tuesday, March 22, from 1:30 – 2:15 p.m., with two related sessions following at 2:30, and 3:30 p.m.
“Our collaboration with SBC supports the deployment of public safety’s Band 14 spectrum, promotes in-building installation standards that meet or exceed existing code and industry best practices, and reinforces the importance of mission-centric innovation like Z-Axis technologies,” said Scott Agnew, AVP FirstNet Products at AT&T.
“The evolution of public safety communications is a critical topic and a driving force in how our first responders will be equipped to protect the public now, and in the years ahead,” said Chief Alan Perdue, executive director of the Safer Buildings Coalition. “With over 3 million connections and almost 20,000 public safety agencies using FirstNet, the in-building sector and its ecosystem of industry players must get to work immediately to ensure that the benefits of FirstNet are available inside buildings – where public safety does so much of its work.”
As the private partner behind FirstNet and an SBC member, FirstNet Built with AT&T is committed to further its mission in delivering public safety a network that is second to none. At IWCE, AT&T is sponsoring the in-building session track, underscoring the carrier’s commitment to placing in-building wireless on center stage at this year’s convention. Scott Agnew from AT&T will also be giving the Keynote at the event.
The FCC estimates that over 10,000 lives could be saved each year if public safety were able to reach callers just 1 minute faster. And since 80 percent of wireless calls take place indoors, the need for in-building dedicated public safety connectivity is essential to public safety operations and overall safety. The First Responder Network Authority (FirstNet Authority) laid out the groundwork for in-building coverage as part of the FirstNet Roadmap, which was designed to guide the growth, evolution and advancement of FirstNet and serve as a view of public safety’s operational needs.
The First Responder Network Authority (FirstNet Authority) laid out the groundwork for in-building coverage as part of the FirstNet Roadmap, which was designed to guide the growth, evolution and advancement of FirstNet and serve as a view of public safety’s operational need, according to AT&T.
First responders and other public safety personnel not attending IWCE 2022 can check out saferbuildings.org/events to see the SBC and FirstNet team schedule, as part of SBC’s North American Seminar Series. To learn more about FirstNet, visit FirstNet.com.
The three largest U.S. cellphone carriers said they are waiving charges or allowing free long-distance calling to Ukraine amid the ongoing Russian Invasion.
Verizon will waive charges for calls from its postpaid consumer and business wireless customers and residential landline customers to and from Ukraine through March 10. The company is also waiving voice and text roaming charges for customers in Ukraine.
T-Mobile said last Thursday that, until March 3, it would be forgoing fees associated with international long-distance and international roaming on calls and text messages made between the U.S. and Ukraine.
AT&T announced it would be allowing unlimited long-distance calling to Ukraine. “This offer is valid for all consumer and business AT&T Postpaid & Prepaid wireless customers, and consumer VoIP and landline customers. Unlimited texts to this region are standard with Mobile Share and Unlimited Texting plans,” according to a prepared statement from the carrier.
Manon Brouillette, executive vice president and CEO of Verizon Consumer Group, said “During these challenging times, customers need to stay connected with loved ones in Ukraine,” said. “Waiving long distance charges for customers calling Ukraine will help them focus on what matters: communicating with family and loved ones.”
A prepared statement from T-Mobile said, “T-Mobile is waiving international long-distance and international roaming charges for calls and SMS made to/from U.S. and Ukraine for T-Mobile and Sprint postpaid and prepaid consumer and business customers,” the cell phone carrier said in a statement. This includes calls made within Ukraine to local numbers to cover roaming customers in Ukraine.”