AT&T posts net loss in 2020; weathers USD15.5bn DirecTV impairment

28 Jan 2021

US telecoms giant AT&T has reported operating revenues of USD171.8 billion for the twelve months ended 31 December 2020, down from USD181.2 billion in 2019. Operating income for the year under review dropped from USD28.0 billion to USD6.4 billion, while the telco posted an annual net loss (attributable to AT&T) of USD5.2 billion – compared to net income of USD13.9 billion in 2019. The damage was done in the fourth quarter, with AT&T posting a USD13.9 billion loss.

Ominously, 4Q20 saw AT&T log a massive USD15.5 billion charge on its struggling DirecTV satellite TV unit, which it has been trying to offload since last year. The telco’s 8-K filing with the Securities and Exchange Commission (SEC) explains: ‘Expenses reflect non-cash impairment charges of USD15.5 billion resulting from changes in our management strategy and our evaluation of the domestic video business. These changes, including our decision to operate our video business separately from our broadband and legacy telephony operations, required us to identify a separate Video reporting unit and to assess both the recoverability of its long-lived assets and any assigned goodwill for impairment.’

In operational terms, AT&T reported a total of 182.588 million wireless accounts in its domestic market as of 31 December 2020, broken down as 77.154 million post-paid subscribers, 18.102 million pre-paid users, 6.535 million reseller customers and 80.767 million connected devices. In terms of fixed broadband connections meanwhile, AT&T claimed 14.100 million residential users at end-2020, of which 4.951 million were fibre-optic connections. Elsewhere, AT&T’s ‘International’ segment reported 18.943 million mobile users in Mexico as of end-December, alongside 10.942 million Latin American pay-TV customers.

John Stankey, AT&T CEO, commented: ‘We ended the year with strong momentum in our market focus areas of broadband connectivity and software-based entertainment. By investing in our high-quality wireless customer base, we had our best full year of post-paid phone net adds in a decade and our second lowest post-paid phone churn ever. Our fibre broadband net adds passed the one million mark for the year.’

United States, AT&T, DirecTV Group