AT&T Chief Financial Officer Provides an Update at Cowen Conference
John Stephens, senior vice president and chief financial officer of AT&T*, provided an update to investors while speaking at the Cowen Technology, Media and Telecom Conference.
Stephens said the company expects a ruling on June 12 in the suit brought against AT&T and Time Warner by the U.S. Department of Justice and stands ready to close if the court rules in its favor. He reiterated that the company expects annualized cost synergies of $1.5 billion by the end of the third year after close.
Stephens also discussed AT&T’s other priorities for this year, including developing its next-generation streaming video platform and targeted advertising capabilities. AT&T expects to build on its successful history of managing technology transitions as the video industry moves from linear to over-the-top (OTT) services. He said the company expects to expand its video offerings to better address each customer segment and grow its total video subscriber base.
This includes AT&T’s top-of-the-line services DIRECTV and U-verse and OTT service DIRECTV NOW. Following the close of the Time Warner deal, the company plans to introduce AT&T Watch, a skinny package without local programming or sports-only channels. By the end of the year, 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 same content as linear TV with a great user experience and lower price points.
Stephens also said advertising is a significant part of the company’s video strategy and noted the vast ad inventory AT&T will have across its platforms following the Time Warner acquisition. The company will be able to offer more targeted advertising using data from its broad base of mobile and video subscribers, as well as subscribers to other properties like Otter Media, HBO and Turner Digital.
Stephens also discussed the wireless competitive environment and the company’s FirstNet deployment. AT&T continues to expect wireless service revenue to return to growth in 2018 on a comparable basis.
Stephens said the FirstNet deployment is off to a strong start. FirstNet is the first-ever nationwide public safety broadband network for America’s first responders. The company has launched the first and only dedicated network core for first responders and expects FirstNet capital spending of $2 billion this year.
In addition to its work with FirstNet, Stephens said AT&T expects to be the first U.S. company to launch standards-based mobile 5G service in 2018. The company also conducted 5G fixed wireless trials and has seen gigabit speeds on millimeter wave spectrum. The company also plans to reach 500 markets with 5G Evolution technology by the end of 2018. With 5G Evolution, the company is seeing speeds at two times of standard LTE in many areas.
A replay of the webcast will be available later today at https://investors.att.com/.
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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.