AT&T Expects to Gain Customers Due to T-Mobile/Sprint, CFO Says
AT&T hasn’t stated a position on T-Mobile’s buy of Sprint, but the company is pushing forward on 5G and ready to pick up customers who will inevitably leave the combined company, said Chief Financial Officer John Stephens at an Oppenheimer conference Tuesday. Stephens said there are many unknowns, including whether the states will prevail in their lawsuit to block the deal (see 1907260071). In 2011, AT&T tried but dropped plans to buy T-Mobile.
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“Mergers are really hard,” Stephens said: “You have to bring together two different cultures; that's hard, two different technologies, two different customer bases.” Whether Dish Network will be a viable fourth wireless network isn’t clear, he said. The U.S. wireless market is already competitive and will remain so, he said.
AT&T sees the potential to pick off customers, Stephens said: “Our chances of attracting those customers will be enhanced as two companies come together and go through the normal distractions that mergers provide and go through the normal distractions of changing out technologies … working with different spectrum bands and the disruption that it causes.” T-Mobile didn't comment.
AT&T’s goal is to add 5G to its core network in mid-2020, Stephen said. When 5G software is available “we will upgrade a significant part, not all, but a significant part of our … core network, to 5G through a software upgrade,” Stephens said: “We may have to go to the tower but we don't have to climb the tower. We have to touch the computers at the base.” Stephens said the company has about 600 MHz of high-band spectrum, which it plans to use for 5G. The company’s focus is on business customers, like automated factories, he said: “You'll see businesses come up with ideas in the IoT space and applications there.”
AT&T’s contract with FirstNet is paying off, Stephens said. AT&T’s goal is to build 70 percent of the public safety network by year-end, he said. “The network team has surprised me many times before,” he said: “Over the last few years, it's always been to the good. They've always gotten more done than we expected.” So far, 8,000 governmental agencies have signed on, with 700,000 FirstNet customers, he said. Only about half of those were AT&T customers before.
AT&T pegs the first responder market at 3 million, with another 11 million utility and other workers who would qualify for FirstNet, Stephens said: “Some are going to have tablets. Some of them are going to have body cams. Some of them will have drones. They all have husbands or children or families that can join in.” Many FirstNet customers are on discounted plans, he said. “That's OK,” he said: “This is a great customer segment to serve and at those prices, we can still make a buck.”