AT&T is setting the stage for a promising future, leveraging the power of 5G and fiber technologies. In their recent Q1 2024 earnings call, CEO John Stankey and CFO Pascal Desroches shared how these investments are transforming the company and what this means for investors.
Building the Best 5G Network
AT&T’s dedication to rolling out 5G is paying off. With 349,000 new postpaid phone subscribers added in the first quarter, AT&T now boasts 71.6 million high-value subscribers. This success is driven by a record-low postpaid phone churn rate of just 0.72%.
Stankey emphasized, “We started the year with a solid first quarter as we continue our investment-led strategy of being the best connectivity provider through 5G and fiber.”
Fiber Expansion: Fast and Far-Reaching
AT&T is also aggressively expanding its fiber network, passing 2.4 million more locations since last year and serving a total of 27 million homes and businesses. The company added 252,000 new fiber customers in Q1, bringing the total to nearly 8.6 million.
“Where we have fiber, we win,” Stankey said, highlighting the success of the fiber initiative. Fiber’s advantages, such as faster speeds and better reliability, make it a compelling choice for consumers and businesses alike.
Synergy of 5G and Fiber: A Unique Advantage
What sets AT&T apart is its dual focus on 5G and fiber. This combination offers seamless connectivity at home and on the go, enhancing the overall customer experience. Stankey explained, “Where we have both our wireless and fiber products, we see a meaningful improvement in customer satisfaction and lower churn rates.”
Financial Health: Strong and Stable
AT&T’s finances are robust. The company reported a free cash flow of 3.1 𝑏𝑖𝑙𝑙𝑖𝑜𝑛 𝑖𝑛 𝑄1, up from 1 billion in the previous year. This strong cash flow has enabled AT&T to reduce its debt, targeting a net debt-to-EBITDA ratio of 2.5x by the first half of 2025.
CFO Pascal Desroches noted, “We delivered first quarter free cash flow of $3.1 billion… This aligns with the expectations we shared for more steady, quarterly free cash flow.”
Looking Ahead: A Bright Future
AT&T’s investments in 5G and fiber not only promise immediate growth but also set the stage for long-term success. The company aims to cover over 30 million locations with fiber by the end of 2025 and has plans to connect 25 million Americans as part of its digital divide initiative.
“We believe that connecting changes everything,” said Stankey. “We must collectively address the communications needs of our country for the next century.”
Investor Takeaway: A Winning Strategy
For investors, AT&T’s strategic investments are a strong growth story. The company’s focus on 5G and fiber, along with its sound financial management, paints a promising picture for the future.
As AT&T continues to harness the power of 5G and fiber, it stands out as a leading player in the connectivity landscape. Stankey summed it up best: “Across the services and technologies most important to the future, 5G and fiber, we’re performing well and growing our share in a healthy industry environment.”
For retail investors, AT&T’s digital future looks bright, filled with potential for strong returns and sustainable growth.
Disclaimer: While Hudson Atlas strives for accurate, quality reporting we do not guarantee that this article is one hundred percent error free.
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