John Stankey, chief executive officer of AT&T Inc.,
spoke recently at the Goldman Sachs Communacopia Conference, where he provided
an update to shareholders.
In discussing the company’s priorities since he became CEO
last year, Stankey said AT&T has now successfully restructured its asset
base to position its largest remaining entities – AT&T Communications and
WarnerMedia – to better capitalize on the long-term structural tailwinds of
each of their respective markets.
Following the close of the WarnerMedia-Discovery
transaction, Stankey believes AT&T Communications and Warner Bros.
Discovery will each have the right scale, capital structure and asset base to
lead their respective industries.
The company is pleased with early momentum in its strategic
areas of focus underscored by continued strength in 5G, fiber and HBO Max
subscribers.
However, to deliver on the long-term benefits of
management’s vision, Stankey recognizes that the company must continue to
consistently execute, innovate, drive out additional costs and build upon its
recent market momentum to improve its value proposition across all of its
customer segments.
In AT&T’s wireless unit, customers have been receptive
to the company’s simplified and consistent go-to-market strategy combined with
its network quality.
AT&T’s network is performing as well as ever, recently
winning recognition as the Nation’s Best 5G Network 1 and, for the fourth
straight year, America’s Best Wireless Network 2 overall. This has helped drive
improved subscriber growth trends and lower churn, indicating that customers
are happy with the combination of service and network quality AT&T delivers.
AT&T expects to continue to invest — and has the ability
to accelerate that investment if warranted — to deliver 5G capabilities to its
expanding customer base, particularly as new applications and use cases for the
technology emerge.
AT&T continues to deploy fiber across its wired
footprint and remains confident in its ability to reach about 2.5 million
incremental customer locations passed by the end of 2021. As previously noted,
AT&T has experienced some disruption in its supply chain.
However, the company now believes this has been addressed
and remains comfortable with its long-term guidance to reach 30 million
locations by the end of 2025. Stankey believes AT&T’s multi-year investment
plan will give the company a competitive advantage as it deploys technology
that delivers 25X faster upload speeds than cable. 3
Stankey indicated that AT&T continues to expect to close
the pending WarnerMedia-Discovery transaction in mid-2022. In the interim,
AT&T remains focused on expanding HBO Max’s global footprint.
HBO Max launched in 39 Latin America territories in June and
is set to launch in six European countries next month, with plans to launch in
at least 14 additional European territories in 2022. AT&T expects HBO Max
subscriber growth in the second half of 2021 to primarily come from outside the
United States, reflecting the strategic decision to cease offering HBO Max on
Amazon Channels.
While AT&T expects this decision will likely impact
total HBO Max / HBO domestic subscribers and net additions in the third
quarter, Stankey said he is encouraged by initial international subscriber
activity and believes exciting content launches in the second half of 2021 and
first half of 2022 will help drive continued subscriber growth. AT&T
continues to expect to reach 70 million to 73 million global HBO Max and HBO
subscribers by the end of 2021. 4
1 AT&T awarded Best 5G Network by GWS OneScore 2021. GWS
conducts paid drive tests for AT&T and uses the data in its OneScore
analysis. AT&T 5G requires compatible plan and device. 5G not available
everywhere. Go to att.com/5Gforyou for details.
2 AT&T awarded Best Network by GWS OneScore 2021. GWS
conducts paid drive tests for AT&T and uses the data in its OneScore
analysis. AT&T 5G requires compatible plan and device. 5G not available
everywhere. Go to att.com/5Gforyou for details.
3 Comparison of Internet 1000 wired upload connection speed
to Xfinity, Spectrum & COX 1Gig and 1.2Gig service with uploads of 35 Mbps.
For more information, go to www.att.com/speed101.
4 Global HBO Max and HBO subscribers consist of domestic and
international HBO Max and HBO subscribers, and exclude free trials, basic and
Cinemax subscribers.
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