Stay in Your Lane, Bro!

Wireless carriers are great at operating mobile networks

Russell McGuire
Nov 21 · 9 min read

One of my favorite recent series of television commercials was the ones by AT&T wireless that ended with the tagline “JUST OK IS NOT OK,” and in that series, the one called “Tattoo Parlor” may be my favorite. In it, the customer says to the tattoo artist “Aren’t you supposed to draw it first?” which earns the rejoinder “Stay in your lane, bro!” Maybe I’m being as over-confident and overly reactive as that inkman, but it seems that AT&T and their brethren in the mobile industry could benefit from that advice.

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This week, BuzzFeed announced that it was acquiring HuffPost (acquired by Verizon in 2015 as part of the $4.4 billion AOL acquisition) in a complex deal with Verizon Media. Meanwhile, AT&T is still looking for a buyer for DirecTV (which they acquired in 2015 for $49 billion). Also announced this week, T-Mobile is shutting down their TVision Home service that they aquired in 2017 (while confusingly launching a similar service also called TVision). These transactions are just the latest in a long line of symptoms of a consistent problem. While mobile operators are great at operating wireless networks, they fail their stakeholders when they stray beyond their strategic boundaries.

This really is a strategy issue. A strategy is a framework that makes hard decisions easier. My favorite strategic framework places the organization’s Purpose at the pinnacle of the framework, supported by three Pillars. For any business, a solid business strategy makes pretty clear the types of things you should do, and more importantly, the things you shouldn’t do. Corporate strategies for large entities like Verizon, AT&T, and Deutsche Telekom (T-Mobile’s parent) are more about portfolio decisions than operating decisions — what businesses should you have in your portfolio and which shouldn’t you have in your portfolio. In both cases, a solid strategy helps you allocate your resources to the activities and assets that help you fulfill your purpose and not to things that will lead you astray.

Let’s look at the strategies of each of these companies to understand how their forays into media fit for each.


  • Preserve the immense advantages that this company has inherited from its proud past: including “a highly skilled workforce, a deeply trusted brand, and a network infrastructure that is second to none”.
  • Strengthen these core assets in order to retain market leadership at a time of increased competition.
  • Transform operations wherever needed in order to not only keep pace with change, but to drive the change.

I struggle to see how Verizon Media fits into this strategy, but perhaps that’s because the assets that make up the company’s media division were collected before Verizon had this clear of a strategy. Verizon acquired AOL for $4.4 billion in 2015. Two years later they added Yahoo to the mix through a $4.5 billion acquisition and rebranded the combined company Oath. Then in 2018, the company took a $4.6 billion write-down on Oath — indicating that the company was worth less than half what Verizon had paid for its two major parts.

So, why did Verizon try to get into the media business in the first place? There probably were many factors. The most obvious thread is that the company’s core telecom and wireless businesses are being commoditized, so the company wanted to move “up the stack” to capture more of the value being delivered over Verizon’s (and other carriers’) “dumb pipes”. AOL and Yahoo had digital advertising technology, and brands and websites that attract millions of eyeballs. Moving into media and advertising seemed like an opportunistic way to escape the commodity trap.

In Verizon’s 2015 Annual Report, Chairman Lowell McAdam wrote of “positioning Verizon to be an innovator in the digital-first mobile future”, and he explained the acquisition of AOL and the launch of go90 (which I’ve recently written about) this way: “the intersection of digital and mobile represents a significant incremental growth opportunity for Verizon.”

In reading that annual report, it would seem that Verizon didn’t really have a strategy. Digital+Mobile looked like a big opportunity that someone was going to capture, so “it might as well be Verizon”. I’ve seen that kind of thinking too many times in my career. Without a strategy to tell you where to go (and where not to go), it’s easy to lose your way.

By 2017, the company at least could quote a purpose statement: “To give people the ability to do more in this world.” Unfortunately that doesn’t provide much direction or any guardrails. I guess, based on that statement, Verizon wasn’t going to pursue building a 5G network on the moon, but anything involving people on earth was in-bounds. So, lacking a strategy that would challenge them to look elsewhere, they completed the Yahoo deal and formed Oath. In explaining why that made sense, McAdam had to invent new words: “Expanding our digital-media presence is not only exciting, it’s deeply important to our company’s future. When we talk about giving people the ability to do more, it’s about something even bigger than these transformative advances in entertainment and communication. It’s about something we call ‘humanability,’ a word that describes our commitment to expanding the possibilities of people everywhere — at home, at work, in their communities and around the world.” In other words, the company still didn’t seem to know what they were doing — they didn’t seem to have a strategy.

By the time of the company’s 2018 annual report, McAdam was out and new Chairman Hans Vestberg described the company’s purpose as “Deliver the promise of the digital world by enabling people, businesses and society to innovate and drive positive change.” That is perhaps slightly more directional than the previous version. The rest of his letter was much more centered on the company’s core network businesses than McAdams’ letters and conveniently failed to mention the $4.6 billion Oath write-down. And now, with the most recent (2019) annual report, Vestberg has introduced yet another purpose for the company (but helpfully with more of a fully developed strategy).

With a focus on the company’s historic assets, I’m guessing we’ll continue to see Vestberg and team looking for ways to unwind their media empire. As good stewards, they should seek to do so in ways that retain the potential for the company to benefit from the upside growth in media businesses. Their complex deal with Buzzfeed is an example of putting the assets in the hands of a leadership team with real strategic focus on media, while retaining some ability to participate in the resulting value creation.


To get here, they have undertaken some breathtaking transactions:

  • In 2015, AT&T completed the acquisition of DirecTV for $49 billion.
  • In 2015, AT&T also acquired Iusacell and Nextel Mexico for a combined $4.4 billion to form AT&T Mexico.
  • In 2018, the company completed the $85 billion acquisition of Time Warner, overcoming the Department of Justice’s antitrust concerns.

Interestingly, if we go back to the beginning of this journey in 2015, AT&T seemed to have more of a strategy than they do today. In his letter to investors in the 2015 annual report, Stephenson says that the company’s mission is to “Connect people with their world, everywhere they live, work and play … and do it better than anyone else.” The company seemed to have five pillars to support this mission:

  • Lead in connectivity and integrated solutions. (This is the company’s core business of operating communications networks.)
  • Serve our customers globally. (Thus the expansion into Mexico.)
  • Operate with an industry-leading cost structure. (In the language of Market Disciplines, the company would focus on operational excellence.)
  • Deliver an effortless customer experience. (As described in his letter, this has more to do with operational excellence than customer intimacy.)
  • Equip our people for the future.

While this was a very aspirational mission, the strategy seems relatively sound for pursuing it. I would probably have simplified it down to three pillars: Operate industry leading networks, Expand globally, and Focus on operational excellence. If the company had just had the strategic discipline to focus on those activities, they may have made progress towards their mission.

However, I struggle to see how the DirecTV acquisition that year (or the Time Warner one three years later) had much to do with this strategy. The company’s focus on operational excellence is not at all aligned with being a media company. And the overwhelming debt that the company has taken on to pay for these acquisitions makes it hard for the company to be a cost leader.

Verizon and AT&T have reached their similar situations by moving in opposite directions. Verizon seemed to start without a strategy, so they made some big mistakes, and now that they have a strategy they need to unwind those mistakes. AT&T had a strategy, but they ignored it and made some big mistakes. They now don’t seem to know what their strategy is, but still need to unwind those mistakes so their debt doesn’t kill them.


For the past seven years, T-Mobile USA has had a consistent business strategy which they call being the “un-carrier.” They describe the emergence of this strategy: “John Legere joined T-Mobile in September 2012 as President and Chief Executive Officer, and found a stupid, broken, arrogant wireless industry that was in desperate need of a customer advocate. Since then, John and his leadership team have crisscrossed the nation, listening to customers and employees, attacking their pain points, forcing the industry to respond and, ultimately, changing wireless for good!”

From their 2019 annual report, I would say that T-Mobile’s strategy has three core pillars:

  • Build and operate a great network
  • Obsess over the customer experience
  • Focus on under-served customer segments

The company’s major transactions have been aligned with this strategy:

  • In 2011, AT&T’s attempted $39 billion acquisition of T-Mobile USA was blocked by regulators. The break-up fee AT&T paid provided T-Mobile the spectrum and cash they needed to dramatically improve their network.
  • In 2013, T-Mobile acquired MetroPCS for $1.5 billion in cash in a reverse merger. This provided additional spectrum and a strong prepaid platform from which T-Mobile would begin to build its un-carrier offerings.
  • In 2018, T-Mobile acquired Layer3, which offered a TV-over-broadband service which T-Mobile used to launch TVision Home. As John Legere said at the time “We know people love their TV, but hate their TV providers. … I can’t wait to take the fight to Big Cable and Satellite TV on behalf of consumers everywhere!” This was the first step in T-Mobile expanding their un-carrier strategy into the poorly served home broadband and TV space dominated by Comcast, Charter, AT&T, and Verizon.
  • In 2020, T-Mobile completed the acquisition of Sprint for $26 billion, a deal that had been in the works, off and on, since at least 2014. The combination moved T-Mobile into the #2 spot in total wireless subscribers, helping the company drive down scale-driven costs. Perhaps more importantly, Sprint’s spectrum portfolio has enabled T-Mobile to offer true broadband speeds to customers’ homes and deliver a new version of TVision over that 5G wireless connection.

Given T-Mobile’s focused execution against their strategy, it’s not surprising that the company has consistently taken market share from its larger competitors. In 2005, AT&T had 50 million subscribers, Verizon had 45.5 million, Sprint had 44 million, and T-Mobile was a distant fourth with 18.2 million subscribers. Today, T-Mobile has 100.4 million wireless subscribers, AT&T has 94.1 million postpaid and prepaid subscribers, and Verizon has 120.3 million retail wireless subscribers.

T-Mobile was a scrappy, under-resourced upstart that executed against a focused strategy. AT&T was a resource-rich industry leader that failed to follow its own strategy and now finds itself falling behind the upstart and struggling under a crushing debt load (caused by huge misaligned acquisitions).

In short, strategy matters. Know what you’re good at. Identify the opportunities that align with your strengths. Pursue them with passion. (And stay in your lane.)


Tales and Tools for Sound Strategies

Russell McGuire

Written by

Strategist, Entrepreneur, Executive, Advisor, Mentor, Inventor, Innovator, Visionary, Author, Writer, Blogger, Husband, Father, Brother, Son, Christian


Through ClearPurpose, we share our experience, tools, and methodologies to approach strategy development with discipline and structure, making it easier to achieve clarity, gain consensus, and communicate coherently. Note: As an Amazon Associate we earn from qualifying purchases.

Russell McGuire

Written by

Strategist, Entrepreneur, Executive, Advisor, Mentor, Inventor, Innovator, Visionary, Author, Writer, Blogger, Husband, Father, Brother, Son, Christian


Through ClearPurpose, we share our experience, tools, and methodologies to approach strategy development with discipline and structure, making it easier to achieve clarity, gain consensus, and communicate coherently. Note: As an Amazon Associate we earn from qualifying purchases.

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