AT&T stands by handset promotions

Asked about the longevity of AT&T's handset promotions, CEO John Stankey said he's not going to talk specifics about sales tactics. However, "it's a great strategy," and one that has led to an uptick in postpaid phone subs. (Getty Images)

AT&T has made significant investments in wireless in the past several years, notably in the FirstNet public safety network and in C-band spectrum, where it spent about $27.4 billion,

Of course, AT&T CEO John Stankey says AT&T is in a great position moving forward, but the wireless industry, as a whole, is as well. Stankey made the comments during the online Goldman Sachs investment conference on Tuesday.

“I think there’s tremendous promise right now” in the kind of ubiquitous, high-capacity bandwidth capabilities that 5G brings, he said. That includes the devices coming online and the ability to use technologies like network slicing to differentiate the network.

“I think this is going to be great for society. I think this is going to be great for the U.S. economy as a whole. If I had to bet … we’re probably going to see record infrastructure investment coming out of this industry in this period of time,” he said.

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A big factor in why AT&T was able to attract Dish Network as a wholesale customer is a recognition of AT&T’s network performance and that “we would be a great partner,” he said. That provides a big vote of confidence in the company, which has moved to the No. 3 position in wireless.

Working on the brand

There’s a lot more work to be done on the AT&T brand overall. In terms of where the brand needs to be, “this is an area where I’m frankly not satisfied on where we stand right now,” he said.

AT&T is a great brand with a storied history but “I’m not sure the brand is positioned well for the next 10 years” in terms of a new generation, Stankey said. “I think we need to do some work to reposition and update it. I’m not talking about advertising here.”

The management team has done a lot of work over the last several months, including primary research, inter-departmental work within the company and consultation with outside talent to define what they want the brand to mean. “We’re not quite finished with the work yet,” but very close, he said.

“I think you’re going to see us take what is a strong brand today, a highly recognized brand,” and take it to a new place that extends into the next 10 years, he said.

Handset promos resonate 

AT&T’s handset promotions have been the subject of a lot of speculation from investors who question whether that strategy is going to lead to an attractive long-term yield rather than short-term gains.

Meanwhile, analysts at LightShed Partners recently created a stir by calling for AT&T’s stock to outperform T-Mobile over the next 12-18 months. It was notable given T-Mobile has been a darling among investment analysts of late – and AT&T has not.

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Stankey said he’s not going to prognosticate on how long or exactly what tactics AT&T is going to use when it comes to handset promotions, but he said it’s important to differentiate products beyond just a handset or an attractive offer. He hinted that software is where it’s at.

AT&T already has started doing some things quietly behind the scenes, and “we have another muscle to build here, which is how do we begin to work on software” to differentiate products and services.

AT&T boasts a different asset base and can serve everything from the largest enterprise to the smallest apartment. “I don’t think we’ve done as much as we can do in that vein to actually make that real for our customers,” he said.

That said, “there’s nothing wrong with that strategy right now,” he added. “It’s a great strategy,” and one that’s resonating with customers.