AT&T to Launch First Mobile 5G Network in Next Few Weeks
AT&T said it will be the first U.S. carrier to offer mobile 5G, with launch in weeks. Verizon was first with a fixed wireless 5G product earlier this month (see 1810010028). AT&T reported a 346,000 Q3 net loss in DirecTV subscribers and earnings below expectations. The stock closed down 8.1 percent at $30.36.
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The soon-to-come 5G "will be standards-based" fifth-generation, said John Donovan, CEO of AT&T’s wireless business, on a call with analysts. He said it will launch “in parts of 12 cities" this year.
AT&T is ready, with trials completed over the past three years, Donovan said. “Fiber is the backbone of 5G, and we have one of the nation's largest fiber networks,” he said: AT&T fiber passes about 18 million customer locations, to be expanded to 22 million next year. The company LTE licensed assisted access in parts of 24 cities by year-end, he said.
AT&T devices support all AT&T commercial LTE bands and the FirstNet band, Donovan noted of Tuesday's announcement. “We're six months ahead of schedule, with our network deployment already covering about one-third of the expected FirstNet area." AT&T said FirstNet has surpassed 250,000 connections and 3,600 public safety agencies have signed on.
FirstNet did well during Hurricane Michael, Donovan said. “We're seeing in real time how we are performing in times of emergency.” AT&T spent about $500 million building FirstNet in Q3 and expects to be reimbursed $1.3 billion this quarter by the public safety network, AT&T officials said.
Revenue rising about 15 percent to $45.74 billion, mostly because it bought Time Warner, was slightly above consensus expectations. Earnings of $4.8 billion were slightly below estimates but an improvement over last year’s $3.1 billion. AT&T added 69,000 postpaid subscribers and 481,000 prepaid. “Growth is being heavily driven by our prepaid business, which is running red-hot,” said AT&T CEO Randall Stephenson. “We're seeing Cricket truly begin to distinguish itself.”
AT&T and Verizon results may show some market changes, said BTIG analyst Walter Piecyk. They "reported surprising growth in post-paid phone gross additions and an increase in churn this week, stoking some concerns that competition in the wireless market is picking up,” Piecyk wrote. “Upgrade rates and smartphone sales are also on the rise at AT&T, a possible early indication that the multi-year lengthening of the smartphone replacement cycle might finally be coming to an end.”