AT&T Is Making One Misstep After Another

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AT&TSee if you can figure out what's wrong with this sponsored Twitter post from AT&T (T) that went out on Tuesday afternoon.

There's never a reason to text and drive. Retweet this if you pledge you won't.
AT&T's It Can Wait pledge drive is honorable. Texting while driving has been the root of countless roadside fatalities in recent years. However, encouraging using the same viral media tools to promote the message seems battered and deep fried in irony.

How many people do you think retweeted the message -- wait for it -- while driving?

Pledge of Allegiance

Obviously there's more going on at AT&T these days than an otherwise noble pledge drive to draw awareness to an unfortunate byproduct of its flagship wireless service.

AT&T is positioned well to cash in on Apple's (AAPL) shiny new iPhone 5. Ma Bell was the smartphone's original carrier in 2007, and it continues to be a top draw for AT&T Wireless even though its larger rivals are also selling the iPhone these days.

However, AT&T can't escape controversy there either.

Net neutrality advocacy groups are gearing up to file regulatory complaints about AT&T's decision to restrict Apple's FaceTime video calls to WiFi. With this week's iOS 6 update, Apple is promoting how its video calling features can now be used through mobile carrier data plans.

Well, AT&T last month revealed that the data video calls will be limited to folks on its new shared data plan.

It was bad enough when AT&T was only throttling some of the bigger data hogs on unlimited data plans or when it stopped offering unlimited data plans to new accounts altogether. Sprint Nextel (S) is now the only one of the three major carriers to continue to offer unlimited data to new smartphone buyers.

However, now AT&T is once again drawling a line in the sand and forcing customers to pay up or lose features that other subscribers will now be receiving.

AT&T is Slower Than You Think

It's been nine months since I wrote why AT&T will never be great again.

There isn't any reason to believe that things will be any different. Yes, AT&T continues to attract income investors given its juicy 4.7% dividend yield, but where's the growth that will keep the good times coming?

Analysts see revenue this year climbing a mere 0.4%, and next year's target calls for AT&T's top line to inch just 1.2% higher.

What's the problem? Despite the smartphone boom and AT&T's success at winning over frustrated cable TV customers with its cheaper U-verse platform, we're still talking about consumers ditching their landlines and companies moving to more high-tech Web-based communications.

Revenue in AT&T's latest quarter rose a mere 0.3%, and it would've still been a measly 2% climb if it hadn't sold off a small subsidiary.

Sorry, Wrong Number

AT&T may have an impressive 105.2 million subscribers, but will the company be able to keep them happy?

The telecom behemoth is bragging about scoring record wireless margins in its latest quarter. AT&T is also proudly telling shareholders that it has the highest average revenue per user in the industry. It's scoring an average of $64.93 per month for its postpaid subscribers.

Just as AT&T may have missed the irony behind the promoted Twitter post on Tuesday, does AT&T not realize that customers know how to read financial statements? If AT&T is generating record margins and is the most expensive service in the country, isn't it just a matter of time before folks catch on and move on?

Your move, AT&T.

Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article. The Motley Fool owns shares of Apple. Motley Fool newsletter services have recommended buying shares of Apple. Motley Fool newsletter services have recommended creating a bull call spread position in Apple.

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11 Comments

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Butthead

I experienced another reason to dump Antichrist Telephone and Telegraph: their slimy habit of overcharging, double-billing and sending customer accounts to the sleaziest debt collectors when they get fed up and cancel service. If corporations are people, then AS&S is Jerry Sandusky!

September 20 2012 at 6:07 PM Report abuse rate up rate down Reply
dgmcmahon

To John Howard:
You CAN get ATT service at home if you have broadband internet. ATT has a thing called a Microcell which is like your own personal cellphone tower and works through the internet. They charge $199 for it, but if you make enough noise and threaten to leave, they'll sell it to you for $199 and then give you a credit on your monthly bill for $199. So you get it for free, but you basically have to lay out the money and then get paid back over a couple of months, depending how much your average monthly bill is.

It works great and you can add other ATT cell phones to it for family or friends when they are at your house.

September 20 2012 at 4:49 PM Report abuse rate up rate down Reply
dp978

How about the fact that there is a T Mobile store reflecting in the background :)

September 20 2012 at 4:39 PM Report abuse rate up rate down Reply
John Howard

I too will be leaving ATT as soon as my contract is up. There service sucks. It is pretty bad when you can not even get service in your own home. Good thing I have a land line phone.

September 20 2012 at 2:49 PM Report abuse +1 rate up rate down Reply
DrHallDental

AT&T is the worst corp in the world. They can never get it together. I will leave them asap.

September 20 2012 at 2:29 PM Report abuse +1 rate up rate down Reply
auburn1987

AT&T's attempt to get people to "retweet" its message about texting while driving is not only wrongheaded, you somehow forgot to mention how blatantly self-serving it is. They're simply trying to cover themselves in gaudy public-service clothes while nakedly trying to get people to send millions of text messages using AT&T's services. Some things never change. Especially AT&T.

September 20 2012 at 1:04 PM Report abuse rate up rate down Reply
SPQR

For the most part they have always paid a good dividend and I like that

September 20 2012 at 12:00 PM Report abuse rate up rate down Reply
johnguthrieyates

srw1964, Lowders, bashrin ... that's because it isn't really ... AT&T ... any more. There is a reason why it is so lousy now ... because it's now ... at&t ... . If ever there was a hiden meaning in a name change, lower case ... says it all. No, I really don't know why everyone still calls it ... AT&T ... it's Southwestern Bell (aka) SBC ... in AT&T clothing. They bought the rights to call themselves at&t ... but they're anything but.

September 20 2012 at 11:40 AM Report abuse +1 rate up rate down Reply
srw1964

Very well said boshrin i could not agree more. Best of the worst. AT&T was once a great company my land line service was great but once i went to u-verse it has been a night mare. They sure know how to play people.

September 20 2012 at 10:27 AM Report abuse +1 rate up rate down Reply
Lowders

ATT was doing business in America long before you were born. And all cell pnone companies are making big money. They are all expensive. It sounds like you are just mad because ATT has figured out a way to make more than the others. What is so wrong with that? This is America you socialist idiot. You want people to choose another provider? Why? So that way all the companies will be equal and one cannot make more money that the other? Why don't you just go ahead and say what you really think? That the gov't should force ATT to close because they are too successful. . You ask "will ATT be able to keep all their customers happy?" the answer is no, and people do change providers, but ATT has the most customers because that many people choose them over another company. Pretty simple.

September 20 2012 at 9:46 AM Report abuse -1 rate up rate down Reply