The AT&T CFO in a trade event in the U.S. said that much of the company’s wireless subscriber base has migrated to plans with no overages. The company expects benefits from ongoing trends in its wireless operations.
AT&T is facing tough competition from Verizon, T-Mobile and Sprint to retain its wireless subscribers across the nation.
AT&T is expecting expansion of its smartphone base, growth in prepaid subscribers and revenues, benefits from low postpaid phone churn levels, and opportunities from bundling wireless services with premium entertainment.
AT&T said its over-the-top video service, DIRECTV NOW, has over 900,000 subscribers in less than a year after its launch. About half of these subscribers are cord cutters, with about 10 percent of those coming from AT&T’s DIRECTV and U-verse services. The other half has migrated from other traditional TV providers.
AT&T has achieved success from its strategy to bundle DIRECTV NOW entertainment service with other services.
AT&T is providing at least one additional service to about 50 percent of DIRECTV NOW subscribers as part of its bundled strategy. AT&T has provided postpaid wireless services to about 40 percent of DIRECTV NOW subscribers.
“AT&T has an opportunity to attract new wireless subscribers with compelling offers. Churn for subscribers with multiple services is significantly lower than for subscribers to individual services,” John Stephens said.
The company said it expects pressure in the fourth quarter from natural disasters. AT&T revenue fell in Q3 as well. Following Hurricane Maria, the company has suspended charges to its video subscribers in Puerto Rico. While customer cancellations in Puerto Rico may affect overall subscriber counts, the company expects positive video net adds in the fourth quarter — including DIRECTV NOW.
AT&T, as part of its investment strategy, has launched 5G Evolution in Austin and Indianapolis. AT&T has plans to expand the coverage of 5G Evolution to 20-plus metros by the end of 2017. The company’s 5G Evolutions plans include parts of Minneapolis — including areas near the stadium — to deliver the latest technology in time for the Big Game in February.
AT&T CFO John Stephens said that telecom operator continues to expect capital expenditures (Capex) in the $22 billion range for the full year of 2017.