AT&T adds 134,000 postpaid phone subscriptions in Q4

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AT&T Chairman and CEO Randall Stephenson "unequivocally" sees 5G as serving as a fixed broadband replacement product. (FierceWireless)

AT&T ended the fourth quarter with 134,000 net phone additions to its postpaid roster, lagging behind the 653,000 net phone additions rival Verizon reported for the same quarter.

Overall, AT&T reported strong results from its mobility and WarnerMedia divisions for the fourth quarter, including what it described as solid domestic wireless service revenue growth with record four-quarter wireless service margins.

For North America, AT&T reported a total of 3.8 million total wireless net adds, with 2.8 million in the U.S., driven by connected devices and smartphones, and 1 million in Mexico. Wireless service revenues in the U.S. were up 2.9%. It also recorded only 13,000 prepaid phone net adds.  

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The top priority for 2018 and 2019 is reducing debt, and AT&T Chairman and CEO Randall Stephenson said he is pleased with how the company closed the year. “This momentum will carry us into 2019 allowing us to continue reducing our debt while investing in the business and continuing our strong record for paying dividends,” he said in a prepared statement.

During the earnings call, Chief Financial Officer John Stephens stressed the importance of AT&T’s FirstNet business, which it’s building out at 700 MHz across the country. As the company goes into sites, it’s doing the work to make them ready for 5G from a software-ready perspective.

It’s also on track to get a majority of the country covered with a mobile standards-based 5G by 2020. 

AT&T expects a couple of 5G phones to be available this year and one of them to work backward and forward, meaning it will be compatible with existing low-band LTE and millimeter wave. The existing customer base is also going to see the benefits, he said.

“It is an evolution. It is real. It affects our customers as we roll it out,” he said.

AT&T did a demonstration on New Year’s Eve in Times Square where it invited the first responder community to come to Times Square and use the first responder network when it was fully loaded to see how the speeds worked. “I will tell you, the first responder community that saw it was quite impressed and we have some high expectations on where FirstNet goes this year and next year,” Stephenson said.

RELATED: AT&T boasts of Q3 wireless growth without promotions

Asked whether AT&T sees a large addressable opportunity for 5G as a residential broadband replacement product, Stephenson is clear about that.

“Over time, three- to five-year time horizon, unequivocally, 5G will serve as a fixed broadband replacement product,” Stephenson said. “I am very convicted that that will be the case. We are obviously on a standards-based path that is mobile first.”

But just like every other product evolution in mobility, this will play out the same, he added. Back in the 1990s, everybody was saying wireless would never serve as substitute for fixed line voice because there wasn’t sufficient capacity. “Well, it is a substitute for voice.”

The same thing was said about broadband in terms of whether the wireless device would serve as a broadband replacement broadly, and the iPhone and LTE began to make that happen. With 5G, there will be enough capacity for streaming video for services like DirecTV and Netflix, he said. “I absolutely am convinced” the capacity will come, including from millimeter wave.

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