AT&T’s Stephens: We're ready to serve businesses as they ramp investments

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AT&T says tax and regulatory reforms pursued by the Trump administration could yield increased investment in the telco. Image: AT&T

AT&T said if the Trump presidential administration were to implement tax reform and other regulatory reforms, the telco could see business service revenue benefits.

John Stephens, CFO of AT&T, told investors at the Barclays Global Technology, Media and Telecommunications Conference that its business customers are ready to make more technology investments.

“Our customers have a pent up need to invest, so we believe that with those regulatory reforms that we would envision there’s a real opportunity for investment,” Stephens said. “That investment is great for our customer base, particularly for business solution group from the large corporate investment and for all of our services.”

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Stephens added that “when businesses make investments, they hire people to the jobs and we get revenue generation, which is an important piece because it’s a story that often does not get told.”

Energy, financial show potential

So where does AT&T see business growth coming from? The telco sees potential investments from vertical segments like energy and finances as making the biggest impact on business service revenue growth.

“Revenue on the top line is really being impacted by the energy, financial and manufacturing sector,” Stephens said. “We serve these customers and it would be great to see those investments improve."

TDM to IP migration pain

Even as businesses increase network service investments, AT&T still faces TDM to IP migration service revenue pain where legacy losses continue to decline while strategic services rise, a trend continued in the third quarter.

AT&T reported that third quarter strategic business services revenues rose 9% year-over-year to $2.9 billion and now consist of 37% of business wireline revenues.

Wireline business services revenues were $7.8 billion.

“Strategic business services are growing at about 10 %,” Stephens said. “We have some traditional Frame Relay, ATM and dial tone services in our business solutions group, but we’re growing that business by bringing in wireless internet of things and these great strategic services.”

However, AT&T’s third quarter strategic business services growth was offset by the decline in legacy services. Legacy data services declined 15.8% year-over-year to $1.8 billion, while legacy voice and other services declined 6.2% year-over-year to $3.2 billion.