AT&T Chief Financial Officer Discusses 2018 Priorities at UBS Conference
06 December 2017 - 7:03AM
Business Wire
John Stephens, chief financial officer of AT&T*, discussed
the company’s priorities for the coming year while speaking at the
UBS Global Media and Communications Conference in New York.
AT&T announced earlier today that its over-the-top video
service, DIRECTV NOW, passed the 1 million subscriber mark.
Stephens said that in 2018, the company expects to address losses
in the company’s traditional video customer base and continue to
expand DIRECTV NOW in the rapidly growing OTT market. The company
continues to expect net video gains in the fourth quarter of 2017,
including DIRECTV NOW. AT&T is also on track to achieve $2.5
billion or more in annualized cost synergies from the DIRECTV
acquisition by mid-2018.
AT&T’s other 2018 priorities include building out the
FirstNet network — the country’s only communications platform
purpose-built with public safety, for public safety. To date, 35
states and territories have announced their decisions to opt in to
FirstNet. The deadline for states’ decisions is Dec. 28. States
that don’t act by that date will automatically be opted in.
The company also plans to build on its momentum in key strategic
areas in wireless in the coming year. It will maintain its strategy
of bundling wireless services with video. When customers bundle
DIRECTV satellite service with wireless, their churn goes down
significantly and the long-term value of the customer relationship
increases. AT&T will continue to work through the transition
from feature phones to smartphones, and remain focused on competing
in the prepaid market.
Stephens said that while the company expects sales volumes to
increase during the holidays, assuming no supply constraints, it
also expects that the smartphone upgrade rate will remain lower
than historical levels.
The company also plans to continue its push to bring high-speed
internet to more customers. Stephens reiterated the company’s
commitment to reach 12.5 million customer locations by mid-2019 as
part of its acquisition of DIRECTV and said he expects to exceed
that target. AT&T now markets its 100% fiber network to 7
million customer locations in 62 markets. AT&T’s penetration
rate in markets with fiber is significantly higher than in other
areas. Across the company’s fiber footprint, penetration rates are
in the mid-30% range, and penetration is closer to 50% in markets
in which fiber has been marketed for 24 months or more.
Stephens reiterated the company’s longer-term plan to cover more
than 50 million locations with high-speed internet. The company
expects to accomplish this while maintaining capital expenditures
at a rate of 15% of service revenues or lower. Cost savings enabled
by the company’s network virtualization initiative may enable
AT&T to keep capital expenditures below 15%.
In its Business Solutions organization, AT&T will focus on
continued growth in strategic services to offset declines in legacy
wirelines revenues. And in Mexico, AT&T plans to complete the
buildout of its 4G LTE network to 100 million people and expects
EBITDA and operating income from Mexico wireless operations to
improve in 2018.
If a new tax bill is not signed into law this year, AT&T
will continue to push for meaningful tax reform in 2018. The
company previously announced that if the corporate tax rate is
permanently lowered to 20%, it would increase investment in the
United States by $1 billion in the first year in which the new rate
is in place. According to research, every $1 billion in capital
invested in the telecom industry creates about 7,000 middle class
jobs.
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: http://www.businesswire.com/news/home/20171205006328/en/
AT&T Global Media RelationsErin McGrath,
214-862-0651erin.mcgrath@att.com
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