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from Breakingviews:
AT&T is all dressed up with nowhere to go
By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
AT&T is all dressed up with nowhere to go. The telecom company had a $93 billion bid for Telefonica blocked by Madrid, according to a Spanish newspaper. The target has denied that it received any expression of interest. But the report is a sign of the problem AT&T faces: it has a lofty stock multiple, which makes M&A tempting, but it seems shut out of both domestic and foreign deals.
The U.S. mobile market looks pretty mature. The number of active wireless devices already exceeds the population, according to industry group CTIA. Sure, as consumers adopt additional devices, such as tablets, this figure will drift higher. But that’s a slow crawl compared to past growth in what was then a burgeoning new market.
Increasing revenue by pushing higher-priced data plans will be difficult. About three-quarters of its billed subscribers already have smartphones, and American bills are higher than in most developed countries. AT&T’s wireless growth slipped below 4 percent in its most recent quarter.
from Breakingviews:
Facebook super-app wants to live off Google
By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
Facebook’s new super-app wants to live off Google. The social network’s Home software, unveiled on Thursday, sits on top of the Android smartphone operating system. That encourages people to use Facebook over rival services. Google built Android, but Mark Zuckerberg’s company plainly likes the idea of grabbing a piece of it.
from Breakingviews:
MetroPCS owners can forget a standalone option
By Robert Cyran and Jeffrey Goldfarb
The authors are Reuters Breakingviews columnists. The opinions expressed are their own.
MetroPCS owners should forget about a standalone option. Dissident investors John Paulson and Peter Schoenfeld persuaded two proxy services that the cellphone operator is selling out on the cheap to rival T-Mobile USA and that independence is a better option. While the agitating may bring a sweeter bid, MetroPCS is unlikely to prosper or exist for long on its own.
from Breakingviews:
U.S. companies need to get real about pensions too
By Agnes T. Crane
The author is a Reuters Breakingviews columnist. The opinions expressed are her own.
Corporate America ought to get real about pensions, too. As lawmakers wrestle over how to fix the nation’s ailing retirement plans, AT&T and Verizon took a whopping $17.2 billion of charges related to theirs in the fourth quarter. Return expectations remain too rosy and deficits are rising. The private sector isn’t leading the way on this issue.
from Breakingviews:
Review: “Idea Factory” produces a few of its own
By Robert Cyran
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
How does innovation happen? That’s the question Jon Gertner tries to answer in “The Idea Factory,” his history of Bell Labs. For fifty years, AT&T’s industrial lab pumped out a series of astonishing new products, including communications satellites and radar, as well as Nobel-prize winning ideas such as the transistor - and garnered prestige for its parent company. Gertner outlines how brilliance, contradictions, chance and steady hands make fertile soil for research.
from David Cay Johnston:
Phone service for all, no matter what kind
The guarantee of landline telephone service at almost any address, a legal right many Americans may not even know they have, is quietly being legislated away in our U.S. state capitals.
AT&T and Verizon, the dominant telephone companies, want to end their 99-year-old universal service obligation known as "provider of last resort." They say universal landline service is a costly and unfair anachronism that is no longer justified because of a competitive market for voice services.
from MediaFile:
The high costs of the cloud
How great is it that high-definition video is now portable? Thanks to cloud computing, superfast 4G networks and tablets with high-resolution screens, we can watch thousands of movies and TV shows in lush, beautiful clarity wherever we go.
In a way, that is pretty great, as the millions of people who have bought the new iPad with retina display and LTE connections have already seen. But in another way, it's going to quickly become not so great: As hi-def video – or rather, the data bandwidth to deliver it – becomes a commodity for more people, that commodity will start to become much more expensive. Not just for consumers, but for the companies that will increasingly need more wireless spectrum and wired infrastructure to handle the surge in data demand.
from Breakingviews:
AT&T board lets CEO off hook for bad call
By Jeffrey Goldfarb
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
AT&T’s board has let its chief executive off the hook for his bad call. Randall Stephenson’s total compensation fell to $22 million last year from just over $27 million in 2010. That’s a light slap for the badly botched bid to buy T-Mobile USA from Deutsche Telekom. AT&T had to take a $4 billion charge for the break fee related to the deal’s collapse. Though complicit directors factored the monetary costs into their decision, they didn’t hold Stephenson properly accountable for failure.
The T-Mobile takeover plan scrapped by regulators unquestionably took its toll. In 2010, AT&T’s free cash flow was atop its target range and earnings per share surpassed it. Last year, free cash flow settled back into the middle of its range while EPS barely scraped the bottom. Even had the T-Mobile costs been excluded, earnings would have fallen short of target. And while on a longer, three-year horizon, AT&T’s total shareholder return of 9 percent outperformed the broader market, it was near the bottom of its own self-described peer group. That all suggests T-Mobile proved a bigger distraction for AT&T management than even the hefty immediate costs imply.
from MediaFile:
Tech wrap: Earnings hit as Apple reigns
Quarterly earnings suffered at major technology and telecoms companies in part because of demand for gadgets made by Apple, one day after core suppliers to Apple savored strong earnings results posted by the iPhone and iPad maker on Tuesday.
AT&T posted a $6.7 billion quarterly loss as it was weighed down by a hefty break-up fee for its failed T-Mobile USA merger and other big charges on top of costly subsidies for smartphones such as Apple's iPhone. While the wireless provider beat analysts' expectations for subscriber additions, the growth came at a massive cost as its wireless service margins plummeted. On top of the $4 billion break-up package charge, AT&T also took a big impairment charge for its telephone directory business, which it said it was considering selling.
from MediaFile:
Nokia’s Weber devises U.S. plan of attack
If Nokia's big challenge this year is getting back in with US consumers and operators, it should be a busy 2012 for Chris Weber. 
Weber -- who heads the Finnish company's business here -- took a moment with us at the Consumer Electronics Show in Las Vegas to lay out some of his plans a day after AT&T announced it would sell Nokia's Lumia 900, and a day before the Lumia 710 goes on sale at T-Mobile USA.
