AT&T To Maintain 5G Spend In 2023

AT&T has kicked off this year on a positive note, as the last year saw it add more mobile phone customers than expected, and is also working on a new offer of fixed wireless access.

However, the US telco still has to deal with massive bills for launching its 5G infrastructure and it has not forecast a capex cut yet, even though most of its major rivals have done so already.

The statistics

While AT&T did have solid results for the full year, its operating expenses did experience a blow because of a write-down of $2.4 billion for its Mexican and fixed-line businesses.

But, most of the attention of the industry has shifted to the company’s postpaid net additions as it is considered a vital metric for mobile operators.

T-Mobile US and Verizon have already disclosed their numbers. The net additions were 656,000 and even though that’s almost 228,000 less than the same quarter a year ago, it is still better than expectations.

Moreover, it means that AT&T is catching up to the rapidly growing T-Mobile and leaving the struggling Verizon far behind.

AT&T’s response

It is understandable that AT&T is feeling chipper about the numbers. John Stankey, the CEO, said that they were able to see additions to their fiber and wireless customers in the fourth quarter.

The chief executive said that this was due to their consistent market strategy as well as their simple offerings.

He said that the company had shown sustainable momentum in the last 10 quarters, as their customer relationships have grown.

AT&T saw net additions of 7.5 million postpaid subscribers, while Fiber net additions stood at 2.9 million. The fourth quarter saw it add fiber customers of about 28,000 and 1.2 million in a year.

5G

It should be noted that both T-Mobile and Verizon have made a commitment to reduce their rollout of 5G spending from 2023 onwards.

However, AT&T continues to spend huge amounts of cash on its 5G infrastructure. According to the company’s outlook, the capital investment in 2023 would come to $24 billion.

Last year, the company spent a total of $24.3 billion on the same. But, this is not really a surprise because AT&T had said as much last March at its investor day.

The company does not have any plans of changing its stance for now. But, Paul Desroches, the chief financial officer, said that they would eventually reduce their capital intensity close to the end of the year.

He said so in an earnings call on Wednesday and also dropped a hint about the launch of a new service this year.

AT&T has remained low key where its fixed wireless access (FWA) services are concerned, even though Verizon and T-Mobile have made significant progress.

Stankey said that areas that have a less dense population will benefit from FWA, which implied that the company is not prioritizing FWA.

This is likely because they are working on something new, but they have not provided a lot of detail about it.