AT&T has ‘claimed the network quality mantel,’ CEO Stephenson says

AT&T CEO Randall Stephenson said the carrier's wireless strategy will remain the same regardless of whether Dish Network enters the market. (FierceWireless)

As AT&T reported second-quarter earnings Wednesday, CEO Randall Stephenson touted the carrier’s wireless network improvements enabled by its FirstNet build, and said strategy will remain the same regardless of whether Dish Network enters the wireless market.

“AT&T now has claimed the network quality mantel,” said Stephenson on the company’s earnings call with investors, emphasizing independent tests that ranked AT&T’s 4G LTE network on top. “And, as a marketing position that’s a great place to be, and we’re starting to see the impacts of this in key segment customer churn.”

In the second quarter AT&T added 72,000 postpaid phone subscribers, versus 51,000 a year ago. Postpaid phone churn in Q2 was 0.86% while total postpaid churn was 1.08%.

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Several network tests have recently acknowledged AT&T’s 4G LTE network improvements, with Ookla naming the carrier as fastest network, and OpenSignal giving the network top speed marks at the regional level. Tests from RootMetrics ranked Verizon’s network number one across categories, but results showed improvements on AT&T.

Stephenson said AT&T’s wireless confidence is growing every day as the company executes through its FirstNet and 5G network strategy. The carrier is 60% complete with its dedicated first responder network build-out, and is on track to finish 70% by year-end, according to Stephenson.

RELATED: San José connects first responders to FirstNet citywide

Stephenson said the first responder community presents a large market where AT&T is entering with a very small share. As of early May, AT&T FirstNet had more than 600,000 connections.

AT&T CFO John Stephens said they see the first responder market as about 3 million potential subscribers, but that potential market grows to about 14 million when secondary first responders, like those that restore power, are added in.

“And, then when you think about them having multiple devices, whether it be a tablet or a phone, and then you think about them having family members,” Stephens said. “So, it really is a very large scale.”

AT&T won the FirstNet contract, enabling it to deploy Band 14 spectrum and take advantage of a one-touch strategy during build-out, where the carrier simultaneously upgrades network hardware with LTE-A technologies and 5G-ready via a future software upgrade.  

With the build-out, AT&T expects to increase network capacity by 50% by year-end in its top 100 markets. Stephenson was confident 5G software will be ready next year and the reiterated the carrier’s plans to have a nationwide 5G footprint by mid-2020.

So far, AT&T’s millimeter wave 5G network has in select parts of 20 cities, but unlike competitors’, AT&T 5G service is only available to business customers for now. That follows with previous executive comments that 5G will initially be an enterprise-driven technology.

RELATED: Donovan claims AT&T is ‘world leader’ in 5G, outlines enterprise strategy

As AT&T reported earnings, the drama surrounding Sprint and T-Mobile’s proposed merger continued to play out in headlines. Most recently, it appears U.S. Department of Justice is poised to approve the deal, with Dish Network scooping up assets and entering the wireless market as a fourth competitor. Still, 14 state attorneys generals have sued to block the deal, so the DoJ might not be the final word.

When asked about what the next few years look like if a new player enters the market, Stephenson said AT&T’s wireless strategy remains the same.

“If Charlie Ergen has wireless assets and distribution or Sprint-T-Mobile happens or doesn’t happen, it doesn’t change anything we’re going to do for the next three years,” Stephenson said. “Our strategy is pretty well baked, and I think the strategy is resilient as it relates to changes in industry structure.”

He reiterated that wireless strategy is centered on FirstNet deployment with 5G launches ranking high on the priority list, paired with unique content from AT&T’s Time Warner acquisition last year.

Stephenson said HBO Max, a new subscription streaming service slated to launch in early 2020, will be a “key part” of the wireless strategy starting next year, with plans to bundle content with AT&T’s wireless, broadband, and new streaming TV offerings.

Overall in the second quarter, AT&T’s wireless business generated $17.5 billion in revenue, including $14 billion in service revenue, up 2.4% year over year.

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