AT&T claims its FirstNet deployments will also advance 5G

The number of FirstNet connections grew to 450,000 by the end of last year. (Getty Images)

AT&T CFO John Stephens said at last evening’s Deutsche Bank Media, Internet and Telecom Conference that the company has several priorities for the coming year. It wants to grow service revenues on its mobility side; stabilize its enterprise group margin; lead with its FirstNet emergency network, advance 5G and fiber; pay down debt; and get merger savings out of its purchase of WarnerMedia.

Paying down debt is a top priority. “We feel very good about our ability to generate $6 billion to $8 billion of assets sales,” said Stephens, according to a Seeking Alpha transcript. “I don't have any asset sales to announce, but I think everyone knows we are actively on the market with a collection of real estate. We have over 50 of our historic buildings on the market, we have a headquarters building in New York that's on the market.”

Regarding fiber, Stephens said the company has reached 11 million customers with its fiber-to-the-premises. “And you know that we are committed to getting that number up to about 14 million in July of this year to meet our FCC requirements; we are on track to do that,” he said.

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AT&T still sees lots of room in the market to sell fiber connectivity. “I’d say that we really started building this out in the last few years," he said. "So even what we have in place today, we still have a lot more time to sell into it, as well as the additional 3 million that we’ll put in place this year.”

FirstNet

Stephens also discussed AT&T’s progress in executing its FirstNet strategy. Verizon traditionally has served a lion’s share of the nation’s first responders, but in 2017, AT&T was awarded the contract for the FirstNet network—the first LTE network dedicated to public safety—and the government is paying AT&T $6.5 billion to build it.

That deal was seen as especially lucrative because it came with 20 megahertz of Band 14 700 MHz spectrum nationwide. Stephens said the strategy all along was to combine that spectrum with AT&T’s AWS-3 and WCS spectrum, so that when it comes time to climb a tower, all three spectrum bands can be deployed, and the efficiency of doing that is proving out.

“So we are getting a 50% increase on average nationwide in our spectral capacity over a three-year period,” he said. “That's a dramatic leapfrog for our business, as well as we are putting in new technologies, 4-way MIMO, 4-way carrier aggregation, 256 QAM, all these physics that basically said what was challenging about our network before was that we had all these separate spectrum bands, we had all the separate highways and now with carrier aggregation, you can push them all together and use them as if they’re one highway.”

It’s an evolution of AT&T’s network because it’s “putting all this initial capacity and all these different technologies in place at once,” he said. “When we climb a tower now, we put up equipment that … is 5G-enabled by software. So when the 5G software comes out and we want to turn our—this evolving network into a 5G network, we can do it from a download or a data card, a software upgrade. We don't have to climb in again. And so that is the process we're going through, and it's proving to be very successful.”

In terms of 5G, Stephens said, “We’ve talked about 200 million pops in 2020 being covered with 5G. That will be a software upgrade. So all of this leads to an efficiency opportunity on a going-forward basis.”

RELATED: FirstNet subscriber base jumps 70% in less than 3 months

The number of FirstNet connections grew to 450,000 by the end of last year, which compares to about 250,000 subscribers at the end of October. The total universe of first responders is about 3 million across the country, and by adding a phone, tablet, body camera, drone or some other device, that total population could include possibly 10 million, he suggested.

Monica Alleven contributed to this report.

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