What AT&T claims: At a recent investor conference, AT&T COO John Stankey claimed that AT&T had achieved network operation cost reductions of 6-8% annually for the most recent 5 years, and discussed future objectives including a shift in focus from network operations to SG&A. Clearly, these are laudable numbers; but what do they mean, exactly? let’s think about this in context. Using 7% (the middle of Stankey’s range) infers a productivity improvement of more than 3 times the national average over the same period – almost startling. If we do the math, it also suggests a halving (50% reduction) in costs, or said differently, a doubling of labor factor productivity, each decade (for simple estimates, use the “rule of 72”). By way of contrast, below is a set of productivity data from 2018, for a set of industrial sectors, courtesy of the US Bureau of Labor Statistics. I want to point specifically to two sectors: “information” technology and “utilities”. IT shows nearly 6% and leads the pack by far. Utilities on the other hand shows more modest 0.5% annual YoY gains. So – has AT&T broken the code and delivered 1100% better performance than its peers? Has it equaled IT, […]