AT&T Is Caught In A Pickle. Google Is Benefitting.
We migrated off of AT&T’s (tkr: T) mobile plan over the weekend in favor of Alphabet’s (tkr: GOOGL), Google Fi mobile phone service.
Google Fi charges less for unlimited calls and texts: Google Fi charges $20 for unlimited calls and texts per user per month vs. $25 for AT&T;
Google Fi charges less per GB of data: Google Fi charges $10 per user per month per GB of data vs. $15 for AT&T;
Google Fi is a better total value: Google Fi’s total cost for unlimited calls and texts plus 1 GB of data = $30 per month vs. $40 for AT&T, a 25% discount.
Google Fi is more flexible: Google Fi operates more like a software company in that it charges for data down to the penny of usage. AT&T by comparison is less flexible and charges per pre-defined pricing tiers.
AT&T is caught in a pickle.
AT&T has to be concerned by Verizon (tkr: VZ) and its superior fiber network to say nothing of Alphabet and its far stronger balance sheet (Alphabet leverages third party networks to deliver Google Fi’s service, which is not to be confused with Google Fiber – a provider of fiber to the home).
If that weren’t enough for AT&T shareholders to be concerned with, AT&T owns WarnerMedia, the albatross that is not a threat to Disney+ (tkr: DIS) nor Netflix (tkr: NFLX). Our best guess is that AT&T will look to create operating flexibility this year by floating or entirely selling WarnerMedia while valuations are lofty.