AT&T Broadband Gains Were Best in Eight Years, Says CEO

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00:00The data from the court is very clear. There was an element of promotion and marketing and deals

00:06that drove it. How would you summarize it? Look, we had really strong growth, as you indicated,

00:12and we're really comfortable with our growth, as I think you're probably aware. We've been

00:16focusing on customers that want to buy both wireless and broadband from us. And when we

00:23can do that, even if it's promotional, that's a good customer to pick up because they have great

00:28lifetime values. And over time, they'll churn less and they'll address that very issue that you

00:34alluded to, which is the increasing churn in the industry. And we kind of anticipate as we acquire

00:40these customers, we're going to see a little bit of ARPU pressure, partly because we obviously give

00:46them a better price for their loyalty. And over time, we move them up on the continuum of services

00:52we sell. So, excuse me, by and large, we feel really good about it.

00:59John, I don't know if you have some water there with you. Let me give you a second just to take

01:03a quick drink if you need it. Of course, in the quarter, and we've discussed this with a number

01:08of the carriers, it was iPhone 17. You know, I was there at Cupertino Apple Park on the day of its

01:14release. Can you give us a real-term sense, even if it's from the promotion perspective,

01:19of how big a factor the iPhone 17 was for you? Well, I think it's not a huge factor, but clearly

01:26there was a little bit of suppressed activity after the last iPhone cycle a year ago. Maybe

01:32some folks anticipated it was going to be a little bit larger. Customers were seeing if it was really

01:37frame-breaking and change and concluded possibly that it wasn't and delayed waiting for the next

01:42cycle. And I think, you know, you can only suppress that activity for so long. And now the new device

01:48comes out, people see what it is. So there has been an increase over last year and maybe some

01:55other previous years. It's not a record-breaking cycle, but it's strong. And we're seeing that as

02:00a result. But I don't think it's anything dramatically out of pattern, given the suppression we've seen

02:05in the market. And we were very effective at working through it. 400,000, over 400,000 post-paid

02:12phone net ads shows we can compete in that space and do well with it.

02:16If you're joining us on Bloomberg Television and Radio, we're speaking to AT&T CEO, John Stanky.

02:22Final on the iPhone 17, will it be more of a factor in the three-month period that ends in December,

02:29the holidays?

02:31Well, the holiday season moving through the fourth quarter is always a peak season for

02:35everybody in the industry. I expect that's going to continue to be the case this year.

02:39I don't see anything what we've had over the first couple of weeks of the introduction to suggest

02:45we're going to see a step function change from current rate and pace. So all of our forward

02:51guidance that we've given expects that it's going to be competitive, that we're going to compete and

02:57continue to earn our fair share of service revenues on those converged customers I talked about.

03:02And I expect that it'll be as rambunctious in the industry as it has been, and we'll do just fine.

03:08John, if I turn on my television and watch a show that has ads or I scroll on any given social media

03:15timeline, I keep seeing AT&T talking about itself as a home internet provider. I know that's been a

03:23priority. Have you any evidence that that push has been a success and that you have positioned AT&T in

03:30that domain? Well, I'm glad you're seeing those. It means we must be getting our right market and

03:35targets out there. And I think this quarter was an excellent example of it. We had our best

03:41broadband gain on our strategic products and services, fixed wireless and fiber that we've

03:48had in eight years. And so over 550,000 ads on those strategic products and a net gain of over 230,000

03:56of broadband total. It's the best we've done in eight years. I think that's a good, strong indication

04:01that it's working, especially when you consider the industry has been rife with examples of our

04:08competitors adjusting their offers, trying to do different things to stem the momentum we've had.

04:13So I feel really good about where we're going on that front. And to the effect, we can add that

04:17with wireless subscribers, which we're showing that we can do over 50 percent of the time

04:22when somebody buys our fixed wireless product and we're over 41 percent penetrated on our fiber base.

04:29That's a winning combination economically and what kind of differentiates us from everybody else in

04:34the industry. Okay. Shares are down a touch more than one percent, which in the grand scheme of today

04:41is modest. There's a decline. The back and forth you had with the analysts was, yes, churn is up

04:47and ARPUs are down. But you seem not to be concerned about that. Why? Why is that not the

04:55metrics by which we should look to progress? Part of it, I think, Ed, as well, is we've got a little

05:02bit of churn going on in the industry from CEO changeouts. And there's a little uncertainty around

05:08what the competitive posture is going to be. And then you look at the data points you just referenced

05:12and we're the first to report. And people are asking, you know, what's going to happen when we

05:17hear from everybody else? And my answer to your question is, we're going to talk about the fact

05:23that we're focused on putting customers together with wireless and broadband. And part of that dynamic

05:29is go penetrate segments that we've not been successful at penetrating or as successful. So

05:35when we go to value segments that we're maybe a little undershared in, you're going to naturally have

05:40a little bit less ARPU or average revenue per user when you pick that customer up. And when you

05:46combine wireless and broadband together, you may be giving initially a little bit better deal to do

05:52that. But that's designed into the plan. We want to grow in aggregate service revenues, which we've

05:58demonstrated that we can do that. We indicated we're going to see some strengthening of that as we

06:03move through the year from where we were this quarter. And I'm okay with a little bit lower ARPU if we

06:09actually execute on this consolidated customer strategy and are more successful at penetrating

06:15some of these segments that we haven't been as active in.

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