AT&T at the Morgan Stanley European TMT Conference: Key Takeaways
AT&T’s Latin American operations
During the Morgan Stanley European TMT Conference held on November 12, 2015, John Stephens, AT&T’s (T) chief financial officer, discussed AT&T’s (T) Latin American operations. Stephens said, “When we did the DIRECTV transaction, we viewed the Latin America properties as optionality. The focus of the transaction was on the U.S. market and getting the integrated carrier model there.”
He also added, “I would expect that it’ll be a self-sufficient activity that the cash that they have on their balance sheets today and the cash flows that they generate will generally be self-sustaining for those businesses, and that’s how we look at it.”
Revenue mix for AT&T’s Latin American operations in 3Q15
As you can see in the above chart, Brazil was the largest revenue contributor to AT&T’s Latin American operations in 3Q15. It made up ~52.2% of the total revenue of these operations during the quarter.
Argentina contributed to ~28.2% of the 3Q15 revenue of AT&T’s Latin American operations. Meanwhile, the contribution of other countries was ~18.1% during the quarter.
Customer mix of AT&T’s Latin American operations in 3Q15
At the end of 3Q15, AT&T had ~12.5 million video subscribers in Latin America. In addition, Venezuela accounted for ~44.1% of this figure at the end of the quarter.
Instead of taking direct exposure to AT&T’s stock, you can consider taking diversified exposure to the company by investing in the iShares U.S. Telecommunications ETF (IYZ).
The ETF had ~11.5% of its holdings in the integrated telecom company at the end of September 2015. Please note that on the same date, the ETF also held a total of ~20.1% in Verizon (VZ), Sprint (S), and T-Mobile (TMUS).
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