Over the last year, it looks like everything has flip-flopped, at least temporarily. Thanks to COVID-19, carriers who were expanding beyond their traditional core, who looked like their growth was unlimited, today are being impacted by some of their new acquisitions and are struggling to get through this time.
At the same time, companies who stuck to their guns and who one year ago looked like they had a more limited growth track, seem to be in a strong position today during these coronavirus times.
There are winning and losing sectors. Within the winning sector there are winners and losers as well. Let’s take a closer look at who the winners and losers were a year ago and how that has flip-flopped under Covid-19.
Comcast Xfinity and AT&T expanding beyond their core
Let’s consider companies in the wireless, telecom, internet, pay TV, news, television network and movie space.
In the last several years we have seen two companies expand beyond their core. Comcast and AT&T were leaders in this space.
Comcast Xfinity acquired NBC Universal and AT&T acquired WarnerMedia. This gave both new areas for growth including wireless, telephone, Internet, TV networks, news networks, the movie and theatre business, theme parks and so much more.
We saw these two companies expanding into these new areas and they grew beyond their core businesses. They saw incredible growth in the future due to growing traditional businesses, blending all their services, new and existing and creating new services.
If the current pandemic never happened, I believe they would still be on that track.
Verizon, T-Mobile, Charter Spectrum, Altice stick to their core
Their competitors like Verizon, T-Mobile, Charter Spectrum, Altice and others did not expand the same. They stuck to their core services.
At the time, it looked like while they could remain strong players in their existing slices of the pie, they would not be leaders in these new areas like Comcast and AT&T were destined to become.
Then, a year ago, when the pandemic hit, things suddenly changed.
A year ago, everything flip-flopped thanks to coronavirus
Suddenly, movie studios like Paramount and Warner Brothers were shut down. New movies were delayed. Theaters were closed.
Other areas like NBC news and networks and WarnerMedia with CNN and other assets were continuing as usual. However, the movie and entertainment business were shut-down tight.
As this pandemic raged over the last year and continues today, it is having an impact on both Comcast and AT&T in their new, non-core areas.
So, core services like wireless, telephone, pay TV, Internet, news and more are still fine. They are strong as ever.
However, the movie and entertainment business has slowed down significantly. This has become a drag.
The good news is things are starting to operate once again, but to a lesser degree than before.
You recall the Mission Impossible movie set with Tom Cruise yelling at the crew for not wearing masks, several weeks ago? These struggles will continue because we are mixing the business realities with the human fears.
Comcast and AT&T cutting everywhere will have negative impact
While this incredible and new path for growth was being primed in its early years by Comcast and AT&T, we expected to see both grow beyond their more traditional and core services.
However, today they are being impacted. In this environment, they are doing everything to keep the ship afloat.
However, I fear these blind, drastic cost cutting actions will have a further negative impact on these companies.
Knowing where to cut like a butcher is key to success. However, blindly cutting everything will negatively impact them in ways they do not yet understand.
How quickly things change.
A year ago, some companies were expanding rapidly and saw huge growth ahead, while others were not participating. Today, it seems the table has turned, for a while anyway.
A year ago, we saw Comcast and AT&T positioning themselves for growth in new areas. Today, while they are still strong and growing in their core areas, they are struggling with some of their newly acquired assets.
Verizon, T-Mobile, Spectrum, Altice remain strong during COVID-19
At the same time, their competitors, who were not making these kinds of acquisitions, and who therefore were more limited in their growth potential, seem to be the strongest of the group today.
Verizon Wireless, T-Mobile, Charter Spectrum, Altice, Cox and others continue to stick to their core and those services are stronger than ever.
Consider Charter Spectrum. While other cable TV competitors have lost market share, Spectrum seems to be dodging that bullet, for now anyway. Curious and good news for their workers, customers and shareholders.
What will happen next?
Going forward, after the pandemic is solved, perhaps companies like Comcast and AT&T will once again be able to move forward with their new plans and growth strategies.
Then again, perhaps the dramatic cost cutting moves they are making short-term will have a negative impact on them longer-term.
That could get in the way of their grand plans to restructure these industries for transformation and growth.
Bottom line: The marketplace has changed thanks to COVID-19
Bottom line, until a year ago when COVID-19 raised its ugly head, it seemed Comcast and AT&T were the only two companies to acquire other industries and expand beyond their core. It also seems their competitors were in a slower growth mode.
Now, in the middle of this coronavirus pandemic, it seems the competitors have all flipped. Suddenly, Comcast and AT&T are dealing with shut-down or at least slow-down of parts of their acquisition.
At the same time Verizon, T-Mobile, Spectrum, Altice, Cox and other competitors continue to do business, as always, in their core areas.
It will be interesting to see how this past year and the upcoming year will impact this industry moving forward. And it will also be interesting to see what happens after the pandemic passes. We’ll be keeping our eyes open for what’s coming next.
