CEO Stankey emphasizes “durable trends” for 5G and fiber growth
AT&T reported wireless postpaid phone net additions of 419,000, with mobility service revenues up 3.4% year-over-year to $16.3 billion for the second quarter. CEO John Stankey noted on the company’s quarterly call that so far this year, AT&T is “modestly ahead of last year’s pace” in terms of wireless subscriber numbers.
Stankey also said that the company anticipates higher activity levels in wireless subs during the second half, due to “availability of new devices and features, seasonal purchasing activity and promotional cycles.”
The company reported that it gained 139,000 net additions in Fixed Wireless Access with its AT&T Air offering, bringing its FWA customer base to nearly 350,000. That service is now available in parts of 137 markets, according to CFO Pascal Desroches, up from parts of 95 markets at the end of the first quarter of 2024.
Stankey reiterated AT&T’s targeted strategy with FWA, which he has made clear is not its preferred technology for bringing on broadband customers (fiber is). “We’re not broadly offering Internet Air everywhere we do business. We’re being selective in how we do that,” he told investors. “We’re doing it in places where it makes sense to aid our transition from legacy technology to new technology that helps us take cost out of the business. We’re doing it in places where we have very fallow capacity that we can be confident will be long-lived in nature and not something that we end up having to incrementally invest in two years out after we sell into the market.” In particular, AT&T is targeting small businesses that have similar usage profiles to residential households and also offer the opportunity to bundle and sell multiple enterprise products.
Company consolidated revenues for the second quarter were down slightly, from $29.9 billion in the year-ago quarter to $29.8 billion in the second quarter of 2024. That was driven by lower business wireline revenues as the company continues to transition away from legacy network technology and services, according to AT&T, as well as lower mobile device equipment revenues.
Net income for the second quarter was $3.9 billion, compared to $4.8 billion in the year-ago quarter.
AT&T continued its streak of 18 consecutive quarters with more than 200,000 net fiber additions, bringing in 239,000 during 2024’s second quarter; overall, the company brought in 52,000 total broadband subscribers in the quarter. Its consumer broadband revenues, meanwhile, were up 7% compared to the same time last year.
The company says it is on track to meet its guidance for the year. It passed 27.8 million consumer and business locations with fiber as of the end of Q2 and is planning to surpass 30 million-plus locations by the end of 2025.
AT&T reported that its operating expenses were up slightly year-on-year from $23.5 billion to $24.0 billion, which it said were due to costs primarily related to its Open RAN network modernization focus as well as higher depreciation on its fiber and 5G investments.
Stankey emphasized the company’s converged strategy of being able to offer both fiber and 5G and sell wireless across its fiber customer base; AT&T said that 40% of its fiber customers are also wireless subscribers. “I am encouraged by our momentum and see a long runway of growth with 5G and fiber together,” Stankey added.
