AT&T (NYSE: T) is revamping how it reports the results of its different business units, starting with its report for the third quarter, and is going to split up its wireless results into two different units – one for the enterprise market and one for consumers. However, it's unclear if the company will still also report total wireless subscriber metrics.
In a filing with the Securities and Exchange Commission, AT&T said "we are revising our operating segments to align with the new management structure and organizational responsibilities."
AT&T's "Business Solutions" segment provides both wireless and wireline services to business customers and individual subscribers who purchase wireless services through employer-sponsored plans. The carrier noted that the services it offers through this unit use its wireless and wired network to "provide a complete communications solution to our business customers."
Meanwhile, AT&T will also report results for its "Consumer Mobility" segment, which "provides nationwide wireless service to consumer, wholesale and resale subscribers located in the U.S. or in U.S. territories. Services utilize our U.S. wireless network to provide voice and data services, including high speed Internet, video entertainment and home monitoring services."
AT&T will use this structure when it reports third-quarter earnings on Oct. 22. In a research note Evercore ISI analysts Jonathan Schildkraut and Justin Ages said it's unclear that the new structure will be better or worse. "While the announcement contains financial data, the lack of metrics (net adds, ARPU, etc.) concerns us," they said.
Importantly, the analysts added, "with the split of wireless into business and consumer, we believe comparisons to peers will be difficult and dependent on the metrics provided." In speaking to AT&T's management, they said, "it sounds as if the company is still deciding on whether they will provide total wireless customers data (including net adds and ARPU) or break them out as now appear in the segments."
AT&T's U.S. DirecTV business and other entertainment and broadband Internet services will be put under the "Entertainment and Internet Services" unit, which "provides entertainment, Internet and communications services predominantly to residential customers in the U.S. Services include video entertainment, high-speed Internet and voice services."
Finally, AT&T will have an "International" segment that will cover AT&T's recently acquired DirecTV and wireless businesses in Latin America and Mexico. "Video entertainment services are provided primarily to residential customers using satellite technology. Wireless services utilize our regional and national wireless networks in Mexico to provide consumer and business customers with wireless data and voice communication services." AT&T's international subsidiaries transact business in their local currency and those operating results are then converted to U.S. dollars using official exchange rates.
The analysts said AT&T's management did indicate that in the Entertainment and Internet Services segment, AT&T will still report U-verse video and broadband net subscriber addition figures as well as separate DirecTV figures.
- see this SEC filing
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