AT&T has a new story to tell after cutting the cord and financial drag associated with its underperforming media and entertainment businesses, but it’s not yet well articulated and it seems to involve software, at least conceptually.

The premise of AT&T’s transformation, which provides focus and brings the company back to its roots as a mobile network operator with an expanding fiber footprint, makes perfect sense. The details underpinning AT&T’s vision for the next decade, however, remain lacking and disconnected from other recent business activities.

“I’m not sure the brand is positioned well for the next 10 years in terms of a new generation and what’s shifting, and I think we need to do some work to reposition and update it,” CEO John Stankey said at the Goldman Sachs Communacopia conference. 

This isn’t a marketing problem, but rather an issue framed by technological prowess and competitive differentiation, he explained. 

With 5G and fiber now touted as the primary focus for AT&T going forward, the company is working behind the scenes to improve skills and the technology it brings to market, according to Stankey.

“We have another muscle to build here, which is how do we begin to work on software to differentiate our products and services in a way that makes our product better than what our competitors can do,” he added. 

The ironic and perhaps most confounding issue for AT&T there is that it just sold its network cloud technology to Microsoft, effectively abandoning software and internally developed technology that provided clear potential differentiation from its competitors.

If AT&T wants to be known as a software pioneer, it sure has an odd way of showing it. Wireless networks are moving infrastructure to the cloud, and operators are unlikely to create separation from competitors without internally developed software designed for that burgeoning architecture. 

Stankey didn’t disparage the value of the assets recently sold to Microsoft, but broadly described AT&T’s many business sales and related activities as decisions designed to regain focus and invest in segments where AT&T has the best chance to lead.

“I believe we’re in a moment in time that to be effective in markets right now — you can’t be average or OK,” he said. As such, AT&T is investing in what he described as “core infrastructure” and technology that supports the products it cares about moving forward. This involves removing clutter from its catalog of products, resizing the corporate structure of the business, and committing the entire company to develop and sell market-leading products, he explained. 

“Where we are operating right now, we’re not perceived from a brand perspective of being the best in all cases,” Stankey said. 

Reorienting AT&T to a business purely focused on fiber and 5G has put some pressure on the company and its workforce, he admitted. Nonetheless, Stankey is undeterred. 

He remains convinced 5G will be a positive for the entire industry, society, and the U.S. economy as a whole. “We’re probably going to see record infrastructure investment coming out of this industry in this period of time, and I think it’s going to equip the U.S., and our economy, and our infrastructure in a way that we’ve never seen. I think that’s going to be incredibly powerful,” Stankey said. 

The executive also argued, despite its financial challenges, AT&T has the wherewithal and capability to match its biggest competitors on infrastructure investments. “I believe when unleashed we have some of the best network minds in the country,” he said. 

Stankey also illustrated, in rather dramatic fashion, the unrelenting and seemingly all-encompassing constraints AT&T and its peers encounter throughout the entire supply chain. “The supply chain is fragile at all levels. It’s fragile on everything,” he said. 

“Last week it was the number of generators we’re deploying for power backup on cell sites. We’re going to miss a target on some of those by a couple hundred because there’s a resin base connector in the harness,” Stankey said. “We can’t get the resin in that resin base connector. You know, it’s a $15,000 generator that’s being held up on something that’s a 25-cent part. You see these things popping up left and right, every corner of the business. So I don’t know what next week brings.”