AT&T Chief Executive Officer Provides an Update at JP Morgan Conference
May 15 2018 - 4:51PM
Business Wire
Randall Stephenson, chairman and chief executive officer of
AT&T*, provided an update to investors while speaking at the JP
Morgan Technology, Media and Communications conference.
Stephenson reiterated the company’s priorities for 2018,
including closing AT&T’s pending acquisition of Time Warner and
integrating the two companies. The company expects a ruling on June
12 in the suit brought against the companies by the U.S. Department
of Justice.
AT&T’s other priorities for this year include building out
its Gigabit network; developing its next-generation streaming video
platform and targeted advertising capabilities; enhancing the
growth and profitability of its Mexico wireless operations; and
maintaining an industry-leading cost structure.
Network evolution
Stephenson noted that the company is focused on building the
best Gigabit network in the United States over the next three
years. Key to this is AT&T’s public-private partnership with
the First Responder Network Authority. In March, AT&T launched
the FirstNet network core, the first core dedicated to first
responders when they need it, giving them always-on priority access
and preemption, with 3 levels of priority to meet their shifting
needs. Stephenson said to date, nearly 650 agencies across 48
states and territories are subscribing to FirstNet services.
As AT&T builds out the FirstNet platform, it is deploying
the accompanying 20MHz of 700 MHz spectrum to towers across its
network. The company is simultaneously deploying additional
commercial spectrum using hardware that is 5G ready while putting
that spectrum in use today. Once the company is ready to upgrade to
5G, this will let it efficiently enable that hardware for 5G via a
software update. In the meantime, Stephenson said the company plans
to reach 500 markets with 5G Evolution by the end of 2018.
Leading the transition in video
In video, as the move from linear video to over-the-top (OTT)
services continues across the industry, AT&T expects to build
on its successful history of managing technology transition.
AT&T today launched new capabilities and options for DIRECTV
NOW, including a new user interface. Customers can now add a third
simultaneous stream for an additional $5 per month and will also
get a beta version of cloud DVR functionality with 20 hours of free
storage. This summer, AT&T plans to roll out an option to
purchase 100 hours of storage for $10 per month.
AT&T will continue to introduce new video options tailored
to the needs of different customer segments. Following the close of
the Time Warner deal, the company plans to introduce WatchTV, a
skinny package without local programming or sports-only channels.
WatchTV will be priced at $15 per month but will be offered for no
additional charge for some of AT&T’s unlimited wireless
subscribers.
The company also expects to launch a premium streaming
experience that will compete with traditional linear TV products
for in-home use. The product will be app-based with a small device
that connects to customers’ TVs and home broadband. This service
will offer the content available on traditional linear TV with a
great user experience and lower price points. With the product’s
lower capital intensity and acquisition cost, there is an
opportunity to achieve a higher return on investment and comparable
margins to traditional satellite video. The company expects to
launch the service by the end of 2018.
Opportunities in advertising
Discussing the company’s opportunities in advertising,
Stephenson cited the vast ad inventory AT&T will have across
its platforms following the Time Warner acquisition. He said that
the company will be able to collect additional data and insights
from its broad base of mobile and video subscribers, as well as
subscribers to other properties like Otter Media and Turner
Digital. While Stephenson said it may take some time to fully
develop these capabilities, the ability to deliver more targeted
advertising gives AT&T an opportunity to significantly improve
ad-generated revenues.
Growth in Mexico
AT&T is the fastest-growing wireless company in Mexico, with
more than 3 million subscribers added over the past 4 quarters. The
company covers nearly 100 million people with 4G LTE and expects
continued subscriber growth. AT&T expects its Mexico operations
to be profitable by the end of 2018.
Cost structure improvements
Stephenson noted that AT&T’s network-related costs have
trended down as it has moved to a software-defined network. The
company previously said that 55% of its network functions were
virtualized at the end of 2017. He also said that the company’s
cost structure was helped by improving sales and distribution
costs.
Wireless trends
Despite continued high levels of competition in U.S. wireless,
Stephenson said the company is hopeful it can return to wireless
service revenue growth on a comparable basis in the second half of
2018. He said that the company has invested in its subscriber base
with new offers and noted that the ability to bundle wireless with
video gives AT&T additional opportunities to attract and retain
customers. Stephenson also said that he believes the company will
add postpaid phone subscribers for full-year 2018.
A replay of the webcast will be available later today at
https://investors.att.com/.
*About AT&T
AT&T Inc. (NYSE:T) is a holding company. AT&T products
and services are provided or offered by subsidiaries and affiliates
of AT&T Inc. under the AT&T brand and not by AT&T
Inc. Additional information about AT&T Inc. is available
at about.att.com.
© 2017 AT&T Intellectual Property. All rights reserved.
AT&T, the Globe logo and other marks are trademarks and service
marks of AT&T Intellectual Property and/or AT&T affiliated
companies. All other marks contained herein are the property of
their respective owners.
Cautionary Language Concerning Forward-Looking
Statements
Information set forth in this news release contains financial
estimates and other forward-looking statements that are subject to
risks and uncertainties, and actual results might differ
materially. A discussion of factors that may affect future results
is contained in AT&T’s filings with the Securities and Exchange
Commission. AT&T disclaims any obligation to update and revise
statements contained in this news release based on new information
or otherwise.
This news release may contain certain non-GAAP financial
measures. Reconciliations between the non-GAAP financial measures
and the GAAP financial measures are available on the company’s
website at https://investors.att.com.
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version on businesswire.com: https://www.businesswire.com/news/home/20180515006705/en/
AT&T Global Media RelationsErin McGrath,
214-862-0651erin.mcgrath@att.com
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