AT&T CEO Randall Stephenson acknowledged device availability would be a hurdle in a plan to launch mobile 5G service this year, but revealed the operator would use a dedicated device to get round the problem.

Stephenson addressed the device issue as AT&T announced its first positive subscriber gains in more than a year and a surge in net profit during Q4 2017.

Facing insistence from Qualcomm and others 5G phones won’t hit the market until 2019, Stephenson said AT&T will initially launch its service using a device called a Puck. While the operator did not detail what the device is, Moor Insights & Strategy principal analyst Patrick Moorhead suggested it is “likely a description of a portable access point,” such as a mobile hotspot.

Stephenson said: “Getting the handsets at scale penetrated into the market will slow things down. So that’s why we’re going to be deploying pucks in the first part of our deployments in these 12 markets. So it is a mobile solution but it’s not going to be a handset just because there aren’t going to be that many handsets available.”

Infrastructure, spectrum
The CEO also explained AT&T’s construction of the FirstNet emergency service network will serve as the foundation for broad 5G deployments. Construction is already underway, with new towers being installed in unserved and underserved rural parts of the country. The infrastructure will play host to spectrum allocated for FirstNet, 40MHz of fallow AT&T spectrum and 39GHz airwaves the operator is expecting to acquire from FiberTower, he said.

Stephenson noted mmWave spectrum is “critical” to AT&T’s 5G plans: “This is what’s required for 5G. We get from FiberTower an average of 360MHz of nationwide spectrum. We’ll be putting this spectrum to work later this year.”

Subs rebound
CFO John Stephens highlighted a total of 329,000 post paid net subscriber additions in Q4, marking a stark turnaround from at least four straight quarters of losses. The figure was up from a loss of 67,000 post paid subscribers in Q4 2016 thanks in part to best-ever Q4 post paid churn of 0.89 per cent. The operator’s device upgrade rate also improved year-on-year, from 6.3 per cent in Q4 2016 to 7 per cent in the recent quarter.

Net profit soared from $2.4 billion in Q4 2016 to $19 billion as the operator benefitted from a recent reduction in corporate tax rates. Wireless service revenue fell 5 per cent year-on-year to $6.4 billion. Equipment revenue of nearly $1.9 billion was up just over 10 per cent year-on-year, but overall wireless operating revenue dipped nearly 2 per cent to $8.3 billion.