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AT&T today reported revenue of $30.0 billion for the first quarter 2024
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Mobility service revenues of $16.0 billion were up 3.3% year over year
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Consumer broadband revenues of $2.7 billion were up 7.7% year over year
AT&T today reported 349,000 postpaid phone net adds in the first quarter 2024, now counting 71.6 million postpaid phone subscribers.
“These aren’t empty calorie additions,” said AT&T CEO John Stankey on today’s earnings call with investors. The company also reported postpaid phone churn of an incredibly low .72%, which was its lowest first quarter churn on record.
Its prepaid phone net additions this quarter were flat.
In its fiber business, AT&T reported 252,000 fiber additions in the first quarter. The company now passes more than 27 million consumer and business locations with fiber. It remains on track to pass 30 million locations with fiber by the end of 2025.
AT&T CFO Pascal Desroches said, “This is the 17th consecutive quarter with AT&T fiber net adds above 200,000. We now have fiber penetration of 40% with several markets well above that level."
In the past year (from Q1 2023 to Q1 2024) the company added 2.5 million fiber passings and grew its consumer fiber base by about 1.1 million to nearly 8.6 million customers.
Desroches said the “better-than-expected returns we’re seeing on our fiber investments potentially expands the opportunity to go beyond our initial target by roughly 10-15 million additional locations.”
AT&T reported that its FirstNet wireless connections grew about 320,000 sequentially from the previous quarter.
Fixed wireless
During the first quarter, AT&T added 110,000 AT&T Internet Air customers – this is its fixed wireless access (FWA) product. It now counts more than 200,000 AT&T Internet Air consumer subscribers.
Stankey talked quite a bit about the company’s AT&T Internet Air on today’s call.
He said AT&T Internet Air for Business is a national product, not limited to AT&T’s fixed broadband footprint. He said, “It doesn’t mean it’s a product for every business. But it certainly is a product for every state.”
He said it’s very useful for certain businesses because it provides a reliable 5G-powered primary internet connection where fiber is not available in remote locations, or when temporary access is needed, or with small and medium businesses that don’t require always-on video streaming.
“We want to make sure we match the product with the businesses that have the right usage characteristics that we think we can provide a quality level of service. There are many businesses that match that,” he said.
In terms of AT&T Internet Air for consumers, Stankey was asked if the company plans to promote it in the same aggressive manner as Verizon and T-Mobile. Stankey said, “No.” He doesn’t think wireless networks are “particularly the best place to take a single family home that streams hours of video a day and try to serve them with kind of a $50 per month product. I just don’t see that as long term sustainable.”
But he did mention some other places where FWA makes a lot of sense.
For instance, places where AT&T is transitioning from copper DSL to fiber, but it’s going to take perhaps 12-18 months. “We’ll use it as a bridging or hold strategy for those customers that are high value to us,” he said.
He also said FWA is a good product in places where AT&T wants to completely leave a geography. “Where I’ve got small numbers of data customers in place I need to get them off of fixed infrastructure that I ultimately want to shutter because that allows me to turn down a geography that is a low utilization and a low profitable geography.”
For example, AT&T is currently asking the California Public Utility Commission to relieve it of its duties as the carrier of last resort in some locations.
Finally, Stankey said there are some “select” markets where AT&T’s penetration levels in mobility are low and its spectrum position is high, and the company may do some targeted marketing to gain FWA customers in those places.
ACP sunset
The Affordable Connectivity Program (ACP) will be ending in May. Stankey said, “We’ve started the process of notifying customers and working with them. I think we’ll be successful in many instances in finding ways to continue relationships with many customers.”
He said in AT&T’s case, ACP subscribers over-indexed on fixed broadband as opposed to wireless.
The numbers
Today, the company reported revenues of $30.0 billion for the first quarter 2024 and net income of $3.8 billion.
Mobility service revenues of $16.0 billion were up 3.3% year over year. And consumer broadband revenues of $2.7 billion were up 7.7% year over year.
AT&T remains on track for full year capital investment in the $21 billion to $22 billion range versus approximately $24 billion in 2023. It told investors to expect full year free cash flow in the $17-$18 billion range.
Last year, AT&T set a new $2 billion target in cost savings by mid 2026. This came on top of the $6 billion cost savings target it achieved last year.