AT&T CEO John Stankey will soon be the longest tenured CEO among the top executives running the Big 3 wireless firms in the U.S. After all, Mike Sievert is leaving November 1st and is being replaced by Srini Gopalan after 5 years and 7 months as CEO of T-Mobile. Dan Schulman just took the CEO job at Verizon replacing Hans Vestberg. Stankey made some comments during the conference call that was held after
AT&T reported its Q3 numbers.
AT&T reported strong postpaid phone net additions for the quarter
First, let’s look at the numbers, which were released on Wednesday. The carrier topped Wall Street expectations with 405,000 net postpaid phone additions. This is arguably the most important metric released by carriers each quarter. The consensus forecast from Wall Street analysts called for AT&T to report 334,100 net postpaid phone additions for Q3. Postpaid phone churn was .92%, up from .78% during the same quarter last year. Carriers want to see this number get lower since it measures the percentage of their customers that discontinued service during the three-month period.
During the quarter, AT&T purchased low and mid-band spectrum from EchoStar, covering nearly every market in the U.S., for approximately $23 billion. For the quarter, AT&T generated $30.7 billion in revenue, a bit shy of the $30.87 billion estimated by Wall Street analysts. Net came to $9.7 billion or 54 cents per share, pretty much what was forecast. Investors weren’t pleased as a sell-off took the stock down 3.7% on Thursday, or 94 cents, to $24.61 at the closing bell.
John Stankey has no plans to follow Sievert and Vestberg by leaving his CEO job at AT&T
Stankey, asked whether he had plans to leave AT&T as Sievert and Vestberg did at T-Mobile and Verizon respectively, made it clear that he is planning to remain AT&T‘s CEO. And while he wouldn’t rule out any additional acquisitions, the CEO said that self-driven growth is the preferred method of growing the company at AT&T. He said that the plan is to focus on offering converging mobile and fiber services to customers.
Stankey says, “Our shift in tactic is to focus on converged customers. We have all the assets in front of us, and we’ve run the plays we need to be successful.” He added that growth will come from “within the four walls of AT&T.”
The $23 billion worth of spectrum that AT&T purchased from EchoStar is now being deployed. Two-thirds of the U.S. population will be covered by AT&T‘s 3.45 GHz mid-band spectrum by the middle of next month. It will be used to enhance AT&T‘s 5G service and its fixed wireless access (FWA) Internet Air performance. In addition, with EchoStar selling off its spectrum, Boost Mobile now operates as a “hybrid mobile network operator (MNO) with AT&T acting as Boost’s primary network operator.
While high on satellite technology, AT&T’s CEO says that it won’t replace cellular for every day wireless service
One technology that Stankey is high on is low-earth orbit (LEO) satellites. AT&T has invested $155 million in AST SpaceMobile and has plans to use its LEO satellites, which have just started launching, as a satellite powered space-based cellular broadband network. Stankey sees the technology used to track livestock or shipping containers when they are in areas without cellular connectivity.
What the AT&T CEO sees is that satellites, whether part of the SpaceX constellation or AST’s airborne fleet, will not replace cellular service for everyday wireless connectivity. Not only would it require too much money to operate such a service, Stankey says that it can’t deliver the same level of performance that you would get from a 5G cellular network, both indoors and outside, that major carriers can deliver in cities and towns covered with 5G signals.
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