AT&T expects elevated levels of capex in 2022 and 2023

AT&T Chief Financial Officer Pascal Desroches revealed that AT&T expects to invest at record levels in 2022 to meet demand for core connectivity, while also meeting free cash flow guidance for the year in the $14 billion range.
AT&T 5G and fiber connections in Q3 2022
The capital expenditure (Capex) of AT&T was $5.9 billion during the third quarter of 2022. AT&T posted revenue of $30 billion in Q3. AT&T had 2.2 million 5G Wireless additions YTD through Q3. AT&T Fiber had nearly 1 million net adds YTD through Q3.

Pascal Desroches said that AT&T expects elevated levels of capital investment in 2022 and 2023 with moderated investment beginning in 2024. The company remains focused on investing in building a sustainable and durable connectivity operation. AT&T’s main focus areas are fiber and 5G network roll outs.

AT&T said it is adding customers in its focus areas of 5G and fiber as customer demand for connectivity services remains healthy. Pascal Desroches feels confident in the ongoing benefits of AT&T’s simplified business model as a pure play connectivity provider. AT&T’s consistent go-to-market approach, along with an improved customer experience, continues to attract high-value customers.

Pascal Desroches highlighted that the company is lapping investments made over the past two years and realizing additional cost savings from its transformation initiatives to enhance its high-performing workforce, optimize and expand connectivity networks and improve distribution.

AT&T Fiber delivers the best customer experience in the marketplace. He’s pleased with the momentum in AT&T Fiber’s ARPU and penetration rates for fiber build. The company has seen AT&T Fiber first-year penetration rates about two times greater than historical norms.

AT&T is expanding its fiber footprint and has the ability to serve 18.5 million consumer locations and 3.0 million business locations in more than 100 metro areas with fiber. Desroches added that AT&T expects to achieve its target of 30 million-plus locations with fiber by the end of 2025.

AT&T is exploring ways to expand where it can serve customers fiber, including outside of its traditional wireline service area. When AT&T Fiber is available, the company has seen an uplift in subscriber penetration. Regardless of location, AT&T will target areas not currently widely served with fiber and that offer attractive returns. Fiber deployments also support AT&T’s wireless business, Pascal Desroches.