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How AT&T Is Working on the Connected Car Concept

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Oct. 2 2018, Updated 6:33 a.m. ET

AT&T collaborates with Harman

AT&T (T) has recently teamed up with Harman International, a US subsidiary of Samsung Electronics, a South Korean electronics manufacturing firm. It’s expected to help give shape to the connected car concept on existing models manufactured after 1996, thus fueling business transformation through edge-to-edge capabilities.

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How is AT&T-Harman developing connected cars?

Harman develops connected products and solutions for automakers, consumers, and enterprises worldwide. They include connected car systems, audio and visual products, enterprise automation solutions, and services supporting IoT (Internet of Things).

With the help of AT&T, Harman has launched Harman Spark, an OBD-II (onboard diagnostics) dongle that will add diagnostics, tracking, and LTE (Long-Term Evolution) data to cars. The dongle will be used in-car only and will be exclusively available at AT&T retail stores and online for $79.99. Harman Spark also offers constant surveillance on a car through the WatchIt function and alerts the user through the app whenever the vehicle is moved, towed, or even bumped.

AT&T’s balance sheet

Over the past five years, AT&T has invested $145 billion in wireless and wireline networks, including capital investments and the acquisition of wireless spectrum and operations. Currently, the company’s wireless network covers more than 99% of Americans.

At the end of the second quarter, AT&T’s capital spending was $5.1 billion, which is lower than $5.2 billion in the year-ago quarter. Its cash flow from operations increased 17.5% YoY (year-over-year) to $10.2 billion, while its free cash flow grew 46.4% to $5.1 billion at the end of the second quarter.

AT&T also pays regular dividends. In the second quarter, it paid quarterly dividends of $0.50 per share, up ~2% YoY from the second quarter of 2017. Its quarterly dividend is equivalent to an annualized dividend of $2 per share and a dividend yield of 5.96% as of September 28. In comparison, Verizon (VZ) has a dividend yield of 4.51%.

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