AT&T Is Making One Misstep After Another


See 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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