uploads///

Is Time-Warner AT&T’s Saving Grace?

By

Oct. 18 2017, Updated 8:09 a.m. ET

T-Mobile disrupting the market

Once trendsetters in the wireless carrier industry, AT&T (T) and Verizon (VZ) have largely been following leads in recent years. T-Mobile (TMUS) has been a particularly disruptive rival, as well as Sprint (S). In the June quarter, AT&T shed both phone and video customers, while T-Mobile made a significant gain in the postpaid phone market.

Article continues below advertisement

Coping with un-carrier practices

Despite their large market share, AT&T and Verizon couldn’t compete with T-Mobile in the unlimited data plans arms race, returning to a scene they had ditched years ago. How can AT&T cope with its “noisy” neighbors? Time Warner (TWX) could be a solution. With its wide-ranging media assets, Time Warner could make AT&T’s wireless phone services more appealing, reducing subscriber churn. Additionally, Time Warner has the right mix of media assets to help AT&T become more successful in media and advertising.

More than $206 billion in US ad market

Although growth of the US (SPY) television ad market has been sluggish due to digital disruption, the overall media ad market is growing. According to eMarketer, US media ad spending will grow 6.1% to $206 billion this year. TV ad spending will be about $73 billion, while digital ad spending will be $83 billion this year, as illustrated in the chart above.

Advertisement

More From Market Realist