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HomeTelecomKey takeaways from AT&T's third quarter of 2023

Key takeaways from AT&T’s third quarter of 2023

AT&T raised steerage for the 12 months based mostly on a robust third quarter efficiency, emphasizing that its 5G and fiber-focused technique is enabling the corporate to drive worthwhile buyer development and “wholesome” income features throughout its mobility and fiber segments.

Listed here are key takeaways from the corporate’s outcomes and quarterly name with analysts.

AT&T is already seeing advantages from making use of generative synthetic intelligence throughout its enterprise. CEO John Stankey mentioned that whereas it’s nonetheless “very early”, AT&T is already seeing “tangible AI-driven enhancements in productiveness and price financial savings,” together with decreasing buyer assist prices, extra environment friendly software program improvement and bettering effectiveness of community design. “We count on these capabilities to play a key function in our continued efforts to attain our future price financial savings aims,” he added.

5G continues to develop. AT&T is on monitor to succeed in a minimum of 200 million individuals with midband 5G service by the top of the 12 months, up from about 190 million presently.

The iPhone remains to be a supply of power for the service. Stankey mentioned that pre-orders for Apple’s iPhone 15 in September have been the “strongest … we’ve had in a few years” even supposing different service suppliers have been providing steeper reductions. And the “overwhelming majority” of individuals profiting from AT&T’s iPhone promotions have been signing up for the corporate’s costliest plans, he added—despite the fact that it wasn’t a requirement for the promotions.

By way of general cellular provides, AT&T reported postpaid telephone web provides of 468,000, with revenues for mobility up 2% and repair revenues up 3.7% year-over-year. Postpaid telephone churn was at 0.79% for the quarter.

Fiber is a robust adoption and income driver. Regardless of excessive rates of interest leading to fewer households transferring to completely different housing, Stankey mentioned, AT&T nonetheless added 296,000 web new fiber broadband clients. Fiber as an funding can be offering larger than anticipated returns, he added, with larger take charges than anticipated and buyer step-ups to pricier plans driving practically 9% enhance in fiber ARPU year-over-year. AT&T noticed its fiber revenues develop practically 30%, driving its complete broadband revenues up virtually 10% in comparison with the identical interval final 12 months.

AT&T is on monitor to cross greater than 30 million fiber areas by the top of the 12 months, with one other 24 million extra alternatives to supply service by way of federal broadband build-out funding or its three way partnership with BlackRock, Stankey mentioned—although he talked about that he expects BEAD to have extra influence in 2025 than in 2024.

5G FWA is a “focused” and selective a part of its service portfolio. The corporate’s 5G Fastened Wi-fi Entry product, AT&T Web Air, nonetheless has already helped the corporate achieve about 25,000 subscribers. As AT&T turns down legacy copper networks, the plan is to supply clients AT&T Web Air as a service various, aiming to get these clients to stay with the corporate relatively than churn away.

“We may give them a greater service on Web Air than we may probably on the present infrastructure that’s in place,” Stankey mentioned on the corporate’s quarterly name, including that the present legacy infrastructure “is usually going to be infrastructure that we’re going to be changing in pretty quick order with fiber.” As a “holding technique,” he mentioned, AT&T might supply Web Air to retain its high-value clients. “It permits us to maneuver into our technique of shutting down infrastructure in locations the place we have to in the end pull out prices and shutter community and infrastructure, and it turns into a device in permitting us to try this,” Stankey defined. “And in order that’s how we intend to make use of it, and we’ll use it … on a really cautious, surgical and focused foundation.”

AT&T additionally sees itself as in “the very early phases of reaping the long-term advantages from the inevitable convergence of 5G and fiber.” The place it deploys fiber, it additionally sees an uptick in wi-fi service clients—and AT&T clients who’ve each wi-fi and fiber providers are essentially the most useful and have the bottom churn price, Stankey mentioned.

“Because the one participant scaling each wi-fi and fiber networks, we’re nicely positioned to be the supplier of alternative for the ever present connectivity that buyers need,” Stankey mentioned.



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