netrashetty
Netra Shetty
AT&T Inc. is the largest provider of fixed telephony in the United States, and also provides broadband and subscription television services. As of January 2011, AT&T is the largest provider of mobile telephony service in the United States, with over 95.5 million wireless customers, just ahead of Verizon Wireless' 93.2 million, and more than 210 million total customers.[4]
As of 2010, AT&T is the 7th largest company in the United States by total revenue, as well as the 4th largest non-oil company in the US (Behind Walmart, General Electric and Bank of America). It is the 3rd largest company in Texas by total revenue (Behind ExxonMobil and ConocoPhillips) and the largest non-oil company in Texas. It is also the largest company headquartered in Dallas.[5] In 2010, Forbes listed AT&T as the 23rd largest company in the world by market value and the 18th largest non-oil company in the world by market value .[6]
Southwestern Bell Corporation was founded in 1983 as a Regional Bell Operating Company following the break-up of the original AT&T as a result of the United States v. AT&T antitrust suit. The company changed its name in 1995 to SBC Communications Inc. and again in 2005 to AT&T Inc. after it purchased its former parent company, AT&T Corporation. The newly merged company took on the iconic AT&T logo and T stock-trading symbol (for "telephone").
The current AT&T reconstitutes much of the former Bell System and includes ten of the original 22 Bell Operating Companies along with one it partially owned (Southern New England Telephone), and the original long distance division.[7] The company is headquartered in downtown Dallas, Texas.
Selected Financial and Operating Data
Dollars in millions except per share amounts
At December 31 or for the year ended: 2009 2008 2007 2006
2
2005
3
Financial Data
1
Operating revenues $123,018 $124,028 $118,928 $ 63,055 $ 43,764
Operating expenses $101,526 $100,965 $ 98,524 $ 52,767 $ 37,596
Operating income $ 21,492 $ 23,063 $ 20,404 $ 10,288 $ 6,168
Interest expense $ 3,379 $ 3,390 $ 3,507 $ 1,843 $ 1,456
Equity in net income of affiliates $ 734 $ 819 $ 692 $ 2,043 $ 609
Other income (expense) – net $ 152 $ (328) $ 810 $ 398 $ 398
Income taxes $ 6,156 $ 7,036 $ 6,252 $ 3,525 $ 932
Net Income $ 12,843 $ 13,128 $ 12,147 $ 7,361 $ 4,787
Less: Net Income Attributable to
Noncontrolling Interest $ (308) $ (261) $ (196) $ (5) $ (1)
Net Income Attributable to AT&T $ 12,535 $ 12,867 $ 11,951 $ 7,356 $ 4,786
Earnings Per Common Share:
Net Income Attributable to AT&T $ 2.12 $ 2.17 $ 1.95 $ 1.89 $ 1.42
Earnings Per Common Share – Assuming Dilution:
Net Income Attributable to AT&T $ 2.12 $ 2.16 $ 1.94 $ 1.89 $ 1.42
Total assets $268,752 $265,245 $275,644 $270,634 $145,632
Long-term debt $ 64,720 $ 60,872 $ 57,255 $ 50,063 $ 26,115
Total debt $ 72,081 $ 74,991 $ 64,115 $ 59,796 $ 30,570
Construction and capital expenditures $ 17,335 $ 20,335 $ 17,888 $ 8,393 $ 5,612
Dividends declared per common share $ 1.65 $ 1.61 $ 1.47 $ 1.35 $ 1.30
Book value per common share $ 17.34 $ 16.42 $ 19.15 $ 18.58 $ 14.09
Ratio of earnings to fixed charges 4.50 4.80 4.95 5.01 4.11
Debt ratio
7
41.3% 43.7% 35.6% 34.1% 35.9%
Weighted-average common shares
outstanding (000,000) 5,900 5,927 6,127 3,882 3,368
Weighted-average common shares
outstanding with dilution (000,000) 5,924 5,958 6,170 3,902 3,379
End of period common shares outstanding (000,000) 5,902 5,893 6,044 6,239 3,877
Operating Data
Wireless customers (000)
4
85,120 77,009 70,052 60,962 54,144
In-region network access lines in service (000)
5
49,392 55,610 61,582 66,469 49,413
In-region broadband connections (000)
6,7
17,254 16,265 14,802 12,170 6,921
Number of employees 282,720 302,660 309,050 304,180 189,950
1
Amounts in the above table have been prepared in accordance with U.S. generally accepted accounting principles.
2
Our 2006 income statement amounts reflect results from BellSouth Corporation (BellSouth) and AT&T Mobility LLC (AT&T Mobility), formerly Cingular Wireless LLC, for the
two days following the December 29, 2006 acquisition. Our 2006 balance sheet and end-of-year metrics include 100% of BellSouth and AT&T Mobility. Prior to the
December 29, 2006, BellSouth acquisition, AT&T Mobility was a joint venture in which we owned 60% and was accounted for under the equity method.
3
Our 2005 income statement amounts reflect results from AT&T Corp. for the 43 days following the November 18, 2005, acquisition. Our 2005 balance sheet and
end-of-year metrics include 100% of AT&T Corp.
4
The number presented represents 100% of AT&T Mobility cellular/PCS customers.
5
In-region represents access lines serviced by our incumbent local exchange companies (in 22 states since the BellSouth acquisition and in 13 states prior to that
acquisition). Beginning in 2006, the number includes BellSouth lines in service.
6
Broadband connections include in-region DSL lines, in-region U-verse High Speed Internet access, satellite broadband and 3G LaptopConnect cards.
7
Prior period amounts restated to conform to current period reporting methodology
AT&T Inc. (NYSE:T) is a U.S. telecommunications services provider, and the second largest U.S. wireless carrier in the United States, with 92.8 million wireless customers as of 3Q10 [1]. AT&T operates across four segments: Wireless, Wireline, Advertising Solutions, and Other. Its Wireless segment provides both wireless voice and data communications services across the U.S. as well as abroad through roaming agreements. Wireline has historically been AT&T's core business, although given the secular trend away from landlines the company has invested heavily in AT&T "U-Verse", which offers high-speed internet, phone, and television services in one package using one protocol. Advertising Solutions accrues directory and Internet-based advertising through the publication of its White and Yellow Pages directories. Through Other, it provides results from Sterling Commerce.
Within its Wireless segment, AT&T has invested heavily in mobile devices, entering the smartphone industry through a lucrative partnership with Apple in 2007. As of September 2009, 50 million iPhone have been sold and over 20 billion application have been downloaded, granting AT&T a substantial recurring revenue stream, and according to comScore, 43% of all U.S. smartphone customers as of early 2010[2][3]. The success of the iPhone sales through its distribution channels has also given AT&T the opportunity to enter the high margin data services business, which includes Web surfing and email use
In March 2010, it was announced that Apple's next iPhone, to be released in the summer of 2010, was being programmed to work with CDMA, a wireless network that make the iPhone compatible with other wireless carriers, instead of GSM, AT&T and most other carriers' network of choice[2]. As a result, many believe its exclusive contract with the iPhone is set to expire in 2010. Other indications include AT&T's released plans to launch a slew of smartphones from Dell and Motorola running on Google's Android-operating system to cushion the potential migration of iPhone users to other networks. In 2010, AT&T will look to drive data revenue by investing heavily in mobile application development for Android and increasing the core fiber optic capacity of its network[
Company Overview
AT&T traces its roots to the beginning of the telephone era in 1876. From its founding through the 1970s, it dominated the telephone industry as a monopoly. In 1974, however, the Federal Government filed an anti-trust suit and in 1984 the company was forced to break into smaller pieces. Those seven pieces were termed Regional Bell Operating Companies (RBOCs), and they conducted business autonomously for about a decade.
In the 1990s, SBC began buying former AT&T subsidiaries and in 2005 it purchased what remained of AT&T Corp. The resulting company was rebranded AT&T Inc. Finally, in December of 2006, AT&T Inc. purchased BellSouth, creating the corporation that exists today. As 0f the end of 2010, 5 of the 8 spin offs of the original AT&T have been reunited under the new AT&T Inc brand, though competition from other companies and technologies has calmed fears of a re-emergence of the original monopoly.
Business and Financial Metrics
Annual Financial Data, in millions[7] FY2005 FY2006 FY2007 FY2008 FY2009
Revenue $43,862.0 $63,055.0 $118,928.0 $124,028.0 $123,018.0
Gross Profit $24,672.0 $35,706.0 $72,873.0 $74,133.0 $72,613.0
Operating Income $6,168.0 $10,288.0 $20,404.0 $23,063.0 $21,492.0
Net Income $4,786.0 $7,356.0 $11,951.0 $12,867.0 $12,535.0
Consolidated operating revenues were $31.6 billion in 3Q10, up $847 million (2.8 percent) over the previous year’s quarter, marking the third consecutive quarter with YoY quarterly increases. Although operating expenses also rose, AT&T managed a YoY increase in operating income, with $5.5 billion up from $5.4 billion[1]. Its wireless segment also saw a 2.6 million increase in total wireless subscribers, reaching 92.8 million subscribers in service. AT&T witnessed its seventh consecutive quarter of a YoY increase in post-paid Average Revenue per User (ARPU) to $62.84. The third quarter also included a 1.32% total wireless churn, AT&T's best third-quarter result ever[1].
Business Segments
AT&T’s main business units are: wireline services (including DSL and internet service), wireless services (AT&T Wireless), and its directory business.
Wireline Services (50% of revenues in 1Q10[8])
The wireline unit has three core sources of revenue: voice (includes local and long-distance), data, and other services. Other services include satellite video, network, server, data storage and other hosting services.
As of June 2009, AT&T provides broadband services to approximately 16 million customers, keeping its rank as the largest U.S. broadband provider[9]. Its U-verse TV service is an extension of the fiber-to-the-node (FTTN) model, an infrastructure to support FTTN has significantly higher long-term costs than the fiber-to-the-home (FTTH) model used by Verizon Communications. As of December 2009, U-Verse has 2 million subscribers, significantly less than Verizon's FiOS 3.4 million FiOS customers[10].
Wireless Services (45% of revenues in 1Q10[8])
AT&T provides local and long-distance wireless communication voice and data services. With over 90.1 million wireless subscribers as of the end of 2Q10, it is the second largest U.S. wireless carrier by subscribers, following Verizon[4]. The segment benefited substantially in 2Q10 from the release of the iPhone 4, which spurred the most quarterly iPhone activations ever[11].
Advertising Solutions (3% of revenues in 1Q10[8])
AT&T’s advertising & publishing business comprises all of its directory services, including traditional phone books and electronic and internet publishing. Its Yellow and White Pages continue to dominate the markets in which they operate and its internet outfits, especially YELLOWPAGES.COM, are also industry leaders.
Trends and Forces
Regulatory Environment Exposure
AT&T Inc.’s businesses are subject to many levels of complex regulation and any significant changes could have a major impact on the company as a whole. In the 1990s, the FCC began implementing policies that encouraged competition for local telephone service providers, epitomized by the Telecom Act of 1996. The new rules imposed on the industry during this period stifled growth and had a negative impact on earnings for AT&T. Increased regulation or a break-up of the industry like what happened to AT&T in the mid-1980s would be very harmful to all wireless carriers as it would reduce margins considerably.
In early July 2009, both the FCC and DOJ were asked by Senator Herb Kohl of Wisconsin to investigate anti-competitive practices in the cell phone industry, given its dominance by four companies: AT&T, Sprint, T-Mobile USA, and Verizon Wireless[12]. According to the FCC, industry concentration, as measured by the Herfindahl-Hirschman Index, has increased 32% since 2003 primarily as a result of consolidation in the space[13].
Additionally, AT&T and other broadband network providers have been under scrutiny by the FCC for what may be preferential treatment to their own subscribers. For example, AT&T could offer video services at high speeds to subscribers, and make those of its competitors unavailable or slower[14]. With strong support from the U.S. Congress, the FCC may regulate these networks to enforce net neutrality, a decision that could drive up consumer prices[15].
High-Speed Internet and Video Investments
AT&T has made significant investments in developing high-speed internet and video offerings to compete with cable companies such as Time Warner Cable and Cablevision Systems. At the core of this drive is Project Lightspeed, AT&T’s initiative to provide broadband to 19 million households. As mentioned above, AT&T has decided to pursue the FTTN model, allowing it to build its network quicker and less expensively than some of its competitors.
Furthermore, AT&T is betting heavily on being able to provide high-quality video services to its customers. AT&T was involved in a bundling agreement with Echostar Communications to provide broadband and telephone services along with Echostar's satellite television. The laying of their own fiber optic wires puts the future of this relationship at risk. AT&T’s U-verse competes with Verizon’s FiOS and Docsis 3.0 which is provided by cable companies.
Government Investments in Telehealth
In an effort to help lower costs and improve the quality of medical care, many telecommunication companies are partnering up with tech companies to spur their remote client monitoring businesses and take advantage of the $6 billion government spending in telehealth[16]. AT&T research scientists have embedded pressure sensors in the soles of "smart slippers" that detect if a patient's gait is unusual or offbeat, notifying a doctor via e-mail and potentially preventing injury or future costly medical care. Consultancy firm PriceWaterhouseCoopers expects significant growth in this sector, amounting to $1.8 billion by 2013 from $77 million in 1995, as well as significant cost-cutting potential, with potential savings of 20-40%
As of 2010, AT&T is the 7th largest company in the United States by total revenue, as well as the 4th largest non-oil company in the US (Behind Walmart, General Electric and Bank of America). It is the 3rd largest company in Texas by total revenue (Behind ExxonMobil and ConocoPhillips) and the largest non-oil company in Texas. It is also the largest company headquartered in Dallas.[5] In 2010, Forbes listed AT&T as the 23rd largest company in the world by market value and the 18th largest non-oil company in the world by market value .[6]
Southwestern Bell Corporation was founded in 1983 as a Regional Bell Operating Company following the break-up of the original AT&T as a result of the United States v. AT&T antitrust suit. The company changed its name in 1995 to SBC Communications Inc. and again in 2005 to AT&T Inc. after it purchased its former parent company, AT&T Corporation. The newly merged company took on the iconic AT&T logo and T stock-trading symbol (for "telephone").
The current AT&T reconstitutes much of the former Bell System and includes ten of the original 22 Bell Operating Companies along with one it partially owned (Southern New England Telephone), and the original long distance division.[7] The company is headquartered in downtown Dallas, Texas.
Selected Financial and Operating Data
Dollars in millions except per share amounts
At December 31 or for the year ended: 2009 2008 2007 2006
2
2005
3
Financial Data
1
Operating revenues $123,018 $124,028 $118,928 $ 63,055 $ 43,764
Operating expenses $101,526 $100,965 $ 98,524 $ 52,767 $ 37,596
Operating income $ 21,492 $ 23,063 $ 20,404 $ 10,288 $ 6,168
Interest expense $ 3,379 $ 3,390 $ 3,507 $ 1,843 $ 1,456
Equity in net income of affiliates $ 734 $ 819 $ 692 $ 2,043 $ 609
Other income (expense) – net $ 152 $ (328) $ 810 $ 398 $ 398
Income taxes $ 6,156 $ 7,036 $ 6,252 $ 3,525 $ 932
Net Income $ 12,843 $ 13,128 $ 12,147 $ 7,361 $ 4,787
Less: Net Income Attributable to
Noncontrolling Interest $ (308) $ (261) $ (196) $ (5) $ (1)
Net Income Attributable to AT&T $ 12,535 $ 12,867 $ 11,951 $ 7,356 $ 4,786
Earnings Per Common Share:
Net Income Attributable to AT&T $ 2.12 $ 2.17 $ 1.95 $ 1.89 $ 1.42
Earnings Per Common Share – Assuming Dilution:
Net Income Attributable to AT&T $ 2.12 $ 2.16 $ 1.94 $ 1.89 $ 1.42
Total assets $268,752 $265,245 $275,644 $270,634 $145,632
Long-term debt $ 64,720 $ 60,872 $ 57,255 $ 50,063 $ 26,115
Total debt $ 72,081 $ 74,991 $ 64,115 $ 59,796 $ 30,570
Construction and capital expenditures $ 17,335 $ 20,335 $ 17,888 $ 8,393 $ 5,612
Dividends declared per common share $ 1.65 $ 1.61 $ 1.47 $ 1.35 $ 1.30
Book value per common share $ 17.34 $ 16.42 $ 19.15 $ 18.58 $ 14.09
Ratio of earnings to fixed charges 4.50 4.80 4.95 5.01 4.11
Debt ratio
7
41.3% 43.7% 35.6% 34.1% 35.9%
Weighted-average common shares
outstanding (000,000) 5,900 5,927 6,127 3,882 3,368
Weighted-average common shares
outstanding with dilution (000,000) 5,924 5,958 6,170 3,902 3,379
End of period common shares outstanding (000,000) 5,902 5,893 6,044 6,239 3,877
Operating Data
Wireless customers (000)
4
85,120 77,009 70,052 60,962 54,144
In-region network access lines in service (000)
5
49,392 55,610 61,582 66,469 49,413
In-region broadband connections (000)
6,7
17,254 16,265 14,802 12,170 6,921
Number of employees 282,720 302,660 309,050 304,180 189,950
1
Amounts in the above table have been prepared in accordance with U.S. generally accepted accounting principles.
2
Our 2006 income statement amounts reflect results from BellSouth Corporation (BellSouth) and AT&T Mobility LLC (AT&T Mobility), formerly Cingular Wireless LLC, for the
two days following the December 29, 2006 acquisition. Our 2006 balance sheet and end-of-year metrics include 100% of BellSouth and AT&T Mobility. Prior to the
December 29, 2006, BellSouth acquisition, AT&T Mobility was a joint venture in which we owned 60% and was accounted for under the equity method.
3
Our 2005 income statement amounts reflect results from AT&T Corp. for the 43 days following the November 18, 2005, acquisition. Our 2005 balance sheet and
end-of-year metrics include 100% of AT&T Corp.
4
The number presented represents 100% of AT&T Mobility cellular/PCS customers.
5
In-region represents access lines serviced by our incumbent local exchange companies (in 22 states since the BellSouth acquisition and in 13 states prior to that
acquisition). Beginning in 2006, the number includes BellSouth lines in service.
6
Broadband connections include in-region DSL lines, in-region U-verse High Speed Internet access, satellite broadband and 3G LaptopConnect cards.
7
Prior period amounts restated to conform to current period reporting methodology
AT&T Inc. (NYSE:T) is a U.S. telecommunications services provider, and the second largest U.S. wireless carrier in the United States, with 92.8 million wireless customers as of 3Q10 [1]. AT&T operates across four segments: Wireless, Wireline, Advertising Solutions, and Other. Its Wireless segment provides both wireless voice and data communications services across the U.S. as well as abroad through roaming agreements. Wireline has historically been AT&T's core business, although given the secular trend away from landlines the company has invested heavily in AT&T "U-Verse", which offers high-speed internet, phone, and television services in one package using one protocol. Advertising Solutions accrues directory and Internet-based advertising through the publication of its White and Yellow Pages directories. Through Other, it provides results from Sterling Commerce.
Within its Wireless segment, AT&T has invested heavily in mobile devices, entering the smartphone industry through a lucrative partnership with Apple in 2007. As of September 2009, 50 million iPhone have been sold and over 20 billion application have been downloaded, granting AT&T a substantial recurring revenue stream, and according to comScore, 43% of all U.S. smartphone customers as of early 2010[2][3]. The success of the iPhone sales through its distribution channels has also given AT&T the opportunity to enter the high margin data services business, which includes Web surfing and email use
In March 2010, it was announced that Apple's next iPhone, to be released in the summer of 2010, was being programmed to work with CDMA, a wireless network that make the iPhone compatible with other wireless carriers, instead of GSM, AT&T and most other carriers' network of choice[2]. As a result, many believe its exclusive contract with the iPhone is set to expire in 2010. Other indications include AT&T's released plans to launch a slew of smartphones from Dell and Motorola running on Google's Android-operating system to cushion the potential migration of iPhone users to other networks. In 2010, AT&T will look to drive data revenue by investing heavily in mobile application development for Android and increasing the core fiber optic capacity of its network[
Company Overview
AT&T traces its roots to the beginning of the telephone era in 1876. From its founding through the 1970s, it dominated the telephone industry as a monopoly. In 1974, however, the Federal Government filed an anti-trust suit and in 1984 the company was forced to break into smaller pieces. Those seven pieces were termed Regional Bell Operating Companies (RBOCs), and they conducted business autonomously for about a decade.
In the 1990s, SBC began buying former AT&T subsidiaries and in 2005 it purchased what remained of AT&T Corp. The resulting company was rebranded AT&T Inc. Finally, in December of 2006, AT&T Inc. purchased BellSouth, creating the corporation that exists today. As 0f the end of 2010, 5 of the 8 spin offs of the original AT&T have been reunited under the new AT&T Inc brand, though competition from other companies and technologies has calmed fears of a re-emergence of the original monopoly.
Business and Financial Metrics
Annual Financial Data, in millions[7] FY2005 FY2006 FY2007 FY2008 FY2009
Revenue $43,862.0 $63,055.0 $118,928.0 $124,028.0 $123,018.0
Gross Profit $24,672.0 $35,706.0 $72,873.0 $74,133.0 $72,613.0
Operating Income $6,168.0 $10,288.0 $20,404.0 $23,063.0 $21,492.0
Net Income $4,786.0 $7,356.0 $11,951.0 $12,867.0 $12,535.0
Consolidated operating revenues were $31.6 billion in 3Q10, up $847 million (2.8 percent) over the previous year’s quarter, marking the third consecutive quarter with YoY quarterly increases. Although operating expenses also rose, AT&T managed a YoY increase in operating income, with $5.5 billion up from $5.4 billion[1]. Its wireless segment also saw a 2.6 million increase in total wireless subscribers, reaching 92.8 million subscribers in service. AT&T witnessed its seventh consecutive quarter of a YoY increase in post-paid Average Revenue per User (ARPU) to $62.84. The third quarter also included a 1.32% total wireless churn, AT&T's best third-quarter result ever[1].
Business Segments
AT&T’s main business units are: wireline services (including DSL and internet service), wireless services (AT&T Wireless), and its directory business.
Wireline Services (50% of revenues in 1Q10[8])
The wireline unit has three core sources of revenue: voice (includes local and long-distance), data, and other services. Other services include satellite video, network, server, data storage and other hosting services.
As of June 2009, AT&T provides broadband services to approximately 16 million customers, keeping its rank as the largest U.S. broadband provider[9]. Its U-verse TV service is an extension of the fiber-to-the-node (FTTN) model, an infrastructure to support FTTN has significantly higher long-term costs than the fiber-to-the-home (FTTH) model used by Verizon Communications. As of December 2009, U-Verse has 2 million subscribers, significantly less than Verizon's FiOS 3.4 million FiOS customers[10].
Wireless Services (45% of revenues in 1Q10[8])
AT&T provides local and long-distance wireless communication voice and data services. With over 90.1 million wireless subscribers as of the end of 2Q10, it is the second largest U.S. wireless carrier by subscribers, following Verizon[4]. The segment benefited substantially in 2Q10 from the release of the iPhone 4, which spurred the most quarterly iPhone activations ever[11].
Advertising Solutions (3% of revenues in 1Q10[8])
AT&T’s advertising & publishing business comprises all of its directory services, including traditional phone books and electronic and internet publishing. Its Yellow and White Pages continue to dominate the markets in which they operate and its internet outfits, especially YELLOWPAGES.COM, are also industry leaders.
Trends and Forces
Regulatory Environment Exposure
AT&T Inc.’s businesses are subject to many levels of complex regulation and any significant changes could have a major impact on the company as a whole. In the 1990s, the FCC began implementing policies that encouraged competition for local telephone service providers, epitomized by the Telecom Act of 1996. The new rules imposed on the industry during this period stifled growth and had a negative impact on earnings for AT&T. Increased regulation or a break-up of the industry like what happened to AT&T in the mid-1980s would be very harmful to all wireless carriers as it would reduce margins considerably.
In early July 2009, both the FCC and DOJ were asked by Senator Herb Kohl of Wisconsin to investigate anti-competitive practices in the cell phone industry, given its dominance by four companies: AT&T, Sprint, T-Mobile USA, and Verizon Wireless[12]. According to the FCC, industry concentration, as measured by the Herfindahl-Hirschman Index, has increased 32% since 2003 primarily as a result of consolidation in the space[13].
Additionally, AT&T and other broadband network providers have been under scrutiny by the FCC for what may be preferential treatment to their own subscribers. For example, AT&T could offer video services at high speeds to subscribers, and make those of its competitors unavailable or slower[14]. With strong support from the U.S. Congress, the FCC may regulate these networks to enforce net neutrality, a decision that could drive up consumer prices[15].
High-Speed Internet and Video Investments
AT&T has made significant investments in developing high-speed internet and video offerings to compete with cable companies such as Time Warner Cable and Cablevision Systems. At the core of this drive is Project Lightspeed, AT&T’s initiative to provide broadband to 19 million households. As mentioned above, AT&T has decided to pursue the FTTN model, allowing it to build its network quicker and less expensively than some of its competitors.
Furthermore, AT&T is betting heavily on being able to provide high-quality video services to its customers. AT&T was involved in a bundling agreement with Echostar Communications to provide broadband and telephone services along with Echostar's satellite television. The laying of their own fiber optic wires puts the future of this relationship at risk. AT&T’s U-verse competes with Verizon’s FiOS and Docsis 3.0 which is provided by cable companies.
Government Investments in Telehealth
In an effort to help lower costs and improve the quality of medical care, many telecommunication companies are partnering up with tech companies to spur their remote client monitoring businesses and take advantage of the $6 billion government spending in telehealth[16]. AT&T research scientists have embedded pressure sensors in the soles of "smart slippers" that detect if a patient's gait is unusual or offbeat, notifying a doctor via e-mail and potentially preventing injury or future costly medical care. Consultancy firm PriceWaterhouseCoopers expects significant growth in this sector, amounting to $1.8 billion by 2013 from $77 million in 1995, as well as significant cost-cutting potential, with potential savings of 20-40%