AT&T enhances Capex to $5 bn in Q1 targeting 5G network expansion

AT&T has revealed that it has stepped up its Capex related investment in networks to $5 billion in the first quarter of 2020 as compared with capital expenditures of $3.8 billion in Q4 2019.
AT&T ThanksThe primary of focus of AT&T during the first quarter was increase in its investment in 5G networks and fiber. AT&T earlier said it aims to make investment of $20 billion in 2020 as compared with capital expenditures of $19.6 billion in 2019.

AT&T continued its 5G deployment. AT&T now covers more than 120 million people in 190 markets. AT&T aims to become a nationwide 5G service provider this summer.

Randall Stephenson, AT&T Chairman and CEO, indicated that the telecom operator is facing challenges in the roll out of 5G network and fiber in the wake of the spread of coronavirus epidemic.

“We have no intention of slowing down on 5G and fiber deployment. Reality is that a lot of it is not in our control. There is probably going to be relatively to what the targets we gave you on the Capex of downward proclivity on that number, just because of logistical issues that we are running into,” Randall Stephenson said.

AT&T did not reveal the number of 5G subscribers in the first quarter, though it launched the advanced mobile services in April 2019.

AT&T’s revenues for the first quarter dropped significantly to $42.8 billion versus $44.8 billion in the year-ago quarter. Growth in domestic wireless service revenues and strategic and managed business services revenues partially offset declines in revenues from WarnerMedia, domestic video, legacy wireline services, domestic wireless equipment and Vrio.

AT&T reported operating expenses of $35.3 billion versus $37.6 billion in the year-ago quarter, down 6.1 percent due to a one-time spectrum gain, lower Entertainment Group costs, lower WarnerMedia costs primarily associated with lower revenues, lower domestic wireless equipment costs and cost efficiencies.

AT&T reported operating income of $7.5 billion versus $7.2 billion in the year-ago quarter. Operating income margin was 17.5 percent versus 16.1 percent in the year-ago quarter.

“We have a strong cash position, a strong balance sheet, and our core businesses are solid and continue to generate good free cash flow. As a result, we’re able to continue investing in critical growth areas like 5G, broadband and HBO Max,” Randall Stephenson said.