Through its subsidiaries, affiliates, and operating companies, holding company AT&T is the industry-leading provider of wireline voice communications services in the US. Customers use AT&T-branded telephone, Internet, and VoIP services; it also sells digital TV under the U-verse brand. Key markets include California, Illinois, and Texas. The company's corporate, government, and public sector clients use its conferencing, managed network, and wholesale communications services. Subsidiary AT&T Mobility is the second-largest US mobile carrier by both sales and subscriptions (after  Verizon Wireless). It provides mobile voice and data services to more than 105 million subscribers.


While AT&T's wireline business is only slightly smaller than its wireless arm in terms of sales, it has not contributed to the company's growth in the way that the mobile segment has in recent years. Its landline data services are composed of switched and dedicated network transport, dial-up and broadband Internet access, network integration, data equipment sales, and converged video communications.

Geographic Reach

The company has spectrum licenses in all 50 US states, Puerto Rico, and Washington, DC. Its wireless services and mobile broadband services are available in about 200 countries.

Sales and Marketing

AT&T has pushed its mobile services through increased advertising and marketing efforts that tout the benefits of the mobile Internet. A key component of this was an exclusive agreement with  Apple to carry the iPhone in the US from the time of its debut in the summer of 2007 until early 2011 when top rival Verizon also began to offer the device. AT&T reaped significant rewards from this partnership, which helped drive the growth and profits of its wireless business. It spends about $3 billion a year on advertising.

Financial Performance

AT&T revenue increased by 1% in fiscal 2013 compared to fiscal 2012 due to growth in wireless service and equipment revenues as more customers use smartphones. Higher wireline data revenues from U-verse and strategic business services also contributed. Revenue growth continues to be tempered by declines in voice revenues. During fiscal 2013 total switched access lines decreased 13.2%.

AT&T posted a 151% increase in net income, but it wasn’t only because customers made more calls or sent more texts. The $18.25 billion profit was built on a $7.6 billion gain  related to pension and postemployment benefit plans in 2013 compared to an actuarial loss of nearly $10 billion in 2012. Along with the higher revenue areas, an almost 7% drop in the cost of services and sales expenses also boosted the bottom line.

Cash flow from operations fell to about $35 million in 2013 from $39 million in 2012.


AT&T is building its fiber-to- the-home technology to proide residences and business with higher Internet speeds, which will enable other technologies. The $4 billion program, called Project VIP, is aimed at bringing more customers to IP-based services as well as subscribe to higher value entertainment services.

In April 2104, AT&T and the Chernin Group, a media investment firm led by Peter Chernin, formed Otter Media to develop over-the-top (OTT) video services. (OTT refers to media streamed over the Internet where the ISP, such as AT&T, is only responsible for transmitting the data. It's no longer managing and scheduling the programming. It's no longer managing and scheduling the programming, like it does with AT&T U-Verse.) Otter Media began with $500 million in funding.

The venture bought a majority stake in Fullscreen, a global online media company. Fullscreen works with more than 50,000 content creators. Otter also has a majority stake in Crunchyroll, a leading global subscription and ad-supported video platform for Japanese anime and Korean content, and Creativebug, one of the top go-to sources for high-quality online video arts and crafts instruction.

Otter Media’s portfolio includes a majority stake in Crunchyroll, a leading global subscription and ad-supported video platform for Japanese anime and Korean content, and Creativebug, one of the top go-to sources for high-quality online video arts and crafts instruction.

As wireline services and technology decline, AT&T is divesting some of its wireline assets. In October 2014, it completed the sale of its Connecticut wireline operations to Frontier Communications for $2 billion.

In 2012 AT&T sold a majority stake in its advertising and interactive business units to  Cerberus Capital Management, retaining a 47% share for itself in the re-named YP Holdings LLC. The more than $3 billion dollar business -- which includes print telephone directories, YP.com, an advertising network, and a mobile app -- garnered AT&T $750 million in cash along with its minority stake, as well as a $200 million note.

Mergers and Acquisitions

AT&T has been using acquisitions to build its mobile data capabilities and expand its service area and subscriber numbers. In one of its biggest acquisitions, AT&T has agreed to buy satellite pay TV provider DirecTV for $48.5 billion. The companies announced the deal in spring 2014, but it has been under review by regulators. The combination would enable AT&T to offer new packaged services and deliver content on mobile devices, TVs, laptops, cars, and airplanes.

In 2014 it purchased  Leap Wireless (which operates under the Cricket brand) for some $1.2 billion in an effort to build its profile in the prepaid market and expand its LTE network.

Previously, a deal to buy smaller rival  T-Mobile USA from  Deutsche Telekom fell apart amid strong government opposition in 2012. AT&T had to pay Deutsche Telekom a break-up fee valued at about $6 billion, including $3 billion in cash, along with wireless spectrum licenses and a national roaming agreement worth another $3 billion.

A less dramatic effort to increase the capacity of its network involved the purchase of wireless spectrum licenses from  QUALCOMM. In late 2011 AT&T paid about $1.93 billion to QUALCOMM to secure additional capacity necessary to enable the expansion of its 4G network. The spectrum rights cover about 70 million people in the key markets of  Boston, Los Angeles, New York, Philadelphia, and San Francisco, in addition to other areas nationwide. QUALCOMM had used the spectrum for its FLO TV service before it was taken offline early that year.

In early 2013 AT&T picked up more spectrum via the purchase of NextWave Wireless for about $600 million, with most of that going toward outstanding debt. The spectrum includes the Wireless Communication Services (WCS) band, which AT&T hopes to enable for mobile Internet use and help support growing data usage needs. In mid-2013 AT&T agreed to purchase Leap Wireless (pre-paid wireless services via the Cricket brand) for some $1.2 billion in an effort to build its profile in the pre-paid market and expand its LTE network with Leap's unused spectrum.

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