AT&T Communications boss John Donovan to retire

Dallas-based AT&T is losing the boss of its communications division

AT&T Communications chief executive officer John Donovan – whose remit includes overseeing the telecom giant's over-the-top (OTT) TV business – announced plans to retire from the company on 1 October.

Donovan joined AT&T in 2008 as chief technology officer and was named boss of the communications unit in July 2017. AT&T created the communications group ahead of its $85bn acquisition of Time Warner.

AT&T Communications is AT&T's largest business unit, serving 100 million mobile, broadband and pay-TV customers.

AT&T said the company will name a replacement soon.

“It’s been my honor to lead AT&T Communications during a period of unprecedented innovation and investment in new technology that is revolutionizing how people connect with their worlds,” said Donovan. “All that we’ve accomplished is a credit to the talented women and men of AT&T, and their passion for serving our customers. I’m looking forward to the future – spending more time with my family and watching with pride as the AT&T team continues to set the pace for the industry.”

While AT&T Communications accounts for a majority of AT&T's revenue, earning $145bn in 2018, the division's TV business is struggling.

In the second quarter of 2019, AT&T lost 946,000 TV subscribers across U-Verse, DirecTV and its OTT product DirecTV Now.

AT&T has since rebranded its OTT product as AT&T TV Now and launched a new streaming service – AT&T TV. At a Credit Suisse conference in June, Donovan said AT&T's go-forward plan in TV "radically reshapes what your concept of television is."

While AT&T reshapes its TV products, eMarketer has dialed back its excitement on the growth of linear OTT services, or "skinny bundles" such as AT&T TV Now that offer slimmed-down versions of traditional pay-TV packages.

Citing price hikes, high levels of churn and competition from incoming streaming services – including AT&T-owned HBO Max – eMarketer projects linear OTT will reach 31.6 US subscribers by 2023. The previous forecast came in at 35.1 US subscribers by 2022.

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