Summary
1. Its wireline Business is declining 2. Wireless and Enterprise Businesses are doing well 3. Video Business is just starting 4. Integration of pieces and cost reductions are just starting
Analysis
AT&T 's performance this quarter is better than expected. It is doing very well in its wireless sub acquisition and ARPU. AT&T's enterprise division ( Classic AT&T) had turned the corner and is continuing on a maintainable growth trajectory. AT&T is continuing its cost reduction efforts thatcome through the integration of Bell South, SBC, AT&T and Cingular. Every expectation is that Wireless and enterprise divisions will continue their present performance.
However its wireline Business is continuing its bleeding. The Video product is catching some traction gaining about 140000 customers and expecting one million by the year end.
We need to watch how fast wireline declines will be made up by the growth businesses. We also need tokeep an eye on AT&T's success with Video. If AT&T is able to do well in these areas, it will be an unbeatable telecom company for coming years otherwise the battle will drag on. My bet is that it will take a few quarters for a clear picture to emerge.
