AT&T CEO John Stankey (pictured) hailed net post-paid phone additions in Q2 as the operator’s highest for the period in more than a decade, gains booked despite price increases on some tariffs and concerns over inflation.
Additions of 813,000 compared with 789,000 in Q2 2021, with churn of 0.75 per cent in the recent period versus 0.69 per cent.
AT&T raised its full-year wireless service revenue growth forecast to a range of 4.5 per cent to 5 per cent from 3 per cent previously, citing the price increases and subscriber gains.
CFO Pascal Desroches stated the company doesn’t expect 2022 post-paid phone user demand to replicate 2021, but H1 figures gave AT&T “confidence in our raised service revenue outlook”.
Desroches noted the Q2 post-paid additions came with less promotional phone activity than competitors without naming which.
On an earnings call, Stankey noted some customers had accepted higher tariffs while some moved to other price plans, noting “as you would expect, there’s a degree of inertia at any subscription base.”
“Sometimes it takes a little bit of time for somebody to process what’s occurred and react.”
He stated inflation tended to hit the lower end of the market but AT&T was somewhat insulated due to its post-paid base being “skewed a little bit more to the higher socio-economic demographic”.
Stankey noted a rise in bad debt compared with the period before Covid-19 as some customers delayed paying bills, but emphasised it “typically is not an issue of people not paying” rather “of when they pay.”
Reported net income attributable to AT&T rose to $4.2 billion from $1.6 billion due to a new accounting method employed after the spin-off of its WarnerMedia unit into a new entity with Discovery in April.
Operating revenue fell to $29.6 billion from $35.7 billion.
Stankey said AT&T lowered its full-year free cash flow from $16 billion to around $14 billion “to reflect heavy investment in growth and working capital impacts related to timing of collections”.
Fibre net additions of 316,000 were its tenth consecutive quarter of gains in excess of 200,000
The company reached a goal of covering 70 million people with its mid-band 5G spectrum and is now on track to reach 100 million people by the end of the year.
Recon Analytics analyst Roger Entner told Mobile World Live AT&T had a “monster” Q2 due to the net additions, the mid-band progress and near-flat churn.
He branded AT&T’s mid-band coverage “huge” given a decision to split its C-Band and 3.45GHz spectrum. “I don’t think a lot of people expected them to be at this point now.”