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AT&T Customer Service: From the Outhouse to the Penthouse

Stocks in this article: T VZ S

NEW YORK ( TheStreet) -- I don't consider myself old, but I often find myself talking about the past in the same way that "boring older people" did when I was younger.

Take AT&T (T), for example.

I remember when "Ma Bell" was the only game in town. There were no cellphones. You had to pay more if you wanted touch-tone buttons instead of a rotary dial. Long distance wasn't included as part of any plan, and it was expensive.

But did you know AT&T company was recently awarded the top spot in J.D. Power customer satisfaction for 2013?

For those who don't remember, try to imagine a customer service mix between the local Department of Motor Vehicles and Charter Communications (CHTR).

After 30 years of adjusting to the realities of a competitive free market, Ma Bell reached the top of customer service. Investors and customers should anticipate the C-suite continuing to focus on the customer experience.

T Free Cash Flow TTM Chart T Free Cash Flow TTM data by YCharts

In the last 12 years, AT&T transitioned from a landline telco offering cellphone service into a cellphone provider offering U-verse. U-verse is a blended service of high-speed Internet and TV.

Although I am unable to subscribe to U-verse at my home (I can get DSL.), most locations that are able to subscribe to U-verse are also able to select a similar competing offering from another such as Charter, Comcast (CMCSA), Time Warner Cable (TWC) and Verizon Communications (VZ).

Regardless of the competitive landscape, AT&T is executing well. Wireless revenue increased 5.7% last quarter compared to the same period last year. Wireless data revenue increased nearly 20%, and the previously mentioned U-Verse service reached a new mile-stone of 5 million active subscribers.

AT&T's valuation is a little rich when examined through the rearview mirror, but if we look at estimated earnings, this wireless carrier becomes downright cheap. The forward price-to-earnings ratio is only 13.3, and the amount of debt in relation to cash flow, earnings, and cash on hand also makes AT&T attractive.

Verizon and Sprint (S), the other two of the three biggest carriers, failed to encroach on AT&T's market share nearly as much as some predicted when Apple (AAPL) discontinued the exclusive deal with AT&T and started offering iPhones to others.

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