AT&T Chief Financial Officer Discusses 2018 Priorities at UBS Conference

The company plans to build on its momentum in key strategic areas in wireless in the coming year.

John Stephens, chief financial officer of AT&T (No. 3 on the DiversityInc Top 50 Companies list), discussed the company's priorities for the coming year while speaking at the UBS Global Media and Communications Conference in New York.


AT&T announced earlier that its over-the-top video service, DIRECTV NOW, passed the 1 million subscriber mark. Stephens said that in 2018, the company expects to address losses in the company's traditional video customer base and continue to expand DIRECTV NOW in the rapidly growing OTT market. The company continues to expect net video gains in the fourth quarter of 2017, including DIRECTV NOW. AT&T is also on track to achieve $2.5 billion or more in annualized cost synergies from the DIRECTV acquisition by mid-2018.

AT&T's other 2018 priorities include building out the FirstNet network — the country's only communications platform purpose-built with public safety, for public safety. To date, 35 states and territories have announced their decisions to opt in to FirstNet. The deadline for states' decisions is Dec. 28. States that don't act by that date will automatically be opted in.

The company also plans to build on its momentum in key strategic areas in wireless in the coming year. It will maintain its strategy of bundling wireless services with video. When customers bundle DIRECTV satellite service with wireless, their churn goes down significantly and the long-term value of the customer relationship increases. AT&T will continue to work through the transition from feature phones to smartphones, and remain focused on competing in the prepaid market.

Stephens said that while the company expects sales volumes to increase during the holidays, assuming no supply constraints, it also expects that the smartphone upgrade rate will remain lower than historical levels.

The company also plans to continue its push to bring high-speed internet to more customers. Stephens reiterated the company's commitment to reach 12.5 million customer locations by mid-2019 as part of its acquisition of DIRECTV and said he expects to exceed that target. AT&T now markets its 100% fiber network to 7 million customer locations in 62 markets. AT&T's penetration rate in markets with fiber is significantly higher than in other areas. Across the company's fiber footprint, penetration rates are in the mid-30% range, and penetration is closer to 50% in markets in which fiber has been marketed for 24 months or more.

Stephens reiterated the company's longer-term plan to cover more than 50 million locations with high-speed internet. The company expects to accomplish this while maintaining capital expenditures at a rate of 15% of service revenues or lower. Cost savings enabled by the company's network virtualization initiative may enable AT&T to keep capital expenditures below 15%.

In its Business Solutions organization, AT&T will focus on continued growth in strategic services to offset declines in legacy wirelines revenues. And in Mexico, AT&T plans to complete the buildout of its 4G LTE network to 100 million people and expects EBITDA and operating income from Mexico wireless operations to improve in 2018.

If a new tax bill is not signed into law this year, AT&T will continue to push for meaningful tax reform in 2018. The company previously announced that if the corporate tax rate is permanently lowered to 20%, it would increase investment in the United States by $1 billion in the first year in which the new rate is in place. According to research, every $1 billion in capital invested in the telecom industry creates about 7,000 middle class jobs.

A replay of the webcast will be available later today at https://investors.att.com/.

AT&T and U.S. Air Force Academy Collaborate to Explore Advanced Technologies

Formal 5- Year Agreement Aims to Help U.S. Air Force Keep Pace With, Acquire and Use Commercial Technology.

Originally Published by AT&T.

AT&T* and the U.S. Air Force Academy are working together on networking services and advanced technology capabilities. They entered a 5-year Cooperative Research and Development Agreement (CRADA) aimed at boosting the Air Force's use of modern technology at a pace more like the commercial sector.

"Networking is a platform for innovation and mission support," said Lt. Col. Michael Chiaramonte, director of Air Force CyberWorx at the Air Force Academy. "With access to AT&T's resources, we plan to advance our academic and research objectives. By leveraging public-private partnerships with AT&T and our other industry partners, we improve our understanding and use of technology and, ultimately, improve the Air Force's mission capabilities."

The collaboration aims to:

  • Offer knowledge and commercial best practices of cybersecurity, Internet of Things, and other AT&T-led innovations for the Air Force Academy faculty. Such innovations include Smart Base solutions, software-defined networking and 5G.
  • Provide hands-on demonstrations for Academy cadets.
  • Ensure AT&T has greater insight into the vision and technology needs of the U.S. Air Force.
  • Explore opportunities beyond academic interests.

"Our work with the U.S. Air Force Academy will be much like an action-oriented academic 'think tank.' We're here to help the Air Force keep pace with commercial innovation and pinpoint their current and future technology needs," said Rocky Thurston, Client Executive VP, AT&T Public Sector.

Part of the Air Force's larger mission

Partnerships fuel the Academy research program. There are 19 centers and 2 institutes, as well as cadets, faculty and industry all working together for the benefit of tomorrow's Air Force. CyberWorx was established in 2016 as a public-private design center focused on cyber capability. It combines Air Force, academic and industry expertise with state of the art technology and innovative thinking to solve operational problems.

AT&T: How to Build a Culture of Learning

Instead of only providing employees with classroom and web-based training, we're also supplementing those resources with relevant content from social and digital platforms, like social media channels, podcasts and video platforms.

By Jennifer Robertson

Originally Published by AT&T.

Last year, best-selling author and New York Times columnist Thomas Friedman visited AT&T. During a conversation with employees, he emphasized the importance of continuous learning for employees and employers to succeed in the age of acceleration.

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