AT&T reorganizes operating segment into 4 divisions, but analysts say plan lacks performance metrics

Now that its DirecTV deal is done, AT&T (NYSE: T) is realigning its operating segment into four new divisions, an initiative it says will align with the new management structure and organizational responsibilities of the company.

Under the new structure, which was laid out in an SEC filing, AT&T will reorganize its operating segments into four divisions: Business Solutions, Entertainment and Internet Services (EIS), Consumer Mobility (CM) and International.

AT&T said in the SEC filing that in its upcoming third quarter 2015 results, Business Solutions produced the largest amount of revenue, followed by Entertainment and Internet Services, Consumer Mobility, and International -- the smallest segment.

The Business Services unit will provide a mix of wireless and wireline services to business customers as well as to consumers who purchase wireless services through their employers. 

Through the adoption of SDN and NFV, AT&T has been enhancing its business services line with a host of additions to its on-demand service capability, including a managed service that allows business customers to adjust and add network capabilities as needed.

By leveraging NFV, business customers won't need to house router hardware at their locations. Routing functions will be run and accessed from AT&T's core network.

The EIS segment will mainly provide U.S. residential customers with video entertainment, high-speed Internet and voice services. This segment will include DirecTV U.S and is AT&T's wireline sub-segment for Consumer markets, excluding the Connecticut operations it sold off to Frontier.

Despite its promise, some analysts are concerned that the telco is not giving enough information about performance metrics such as net additions and ARPU.

"While the announcement contains financial data, the lack of metrics (net adds, ARPU, etc.) concerns us," said Evercore ISI in a research report. "With the split of wireless into business and consumer, we believe comparisons to peers will be difficult and dependent on the metrics provided."

Evercore added that in their discussions with AT&T management, it appears that "in the EIS segment, we would still receive U-verse video and broadband net adds as well as separate DTV items."

For more:
- see this SEC filing

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