Most States Likely to Opt In on FirstNet, AT&T Says
AT&T executives laid out an ambitious schedule for starting to deploy FirstNet. AT&T, working with FirstNet, will post state plans for the national network for first responders in June, Chief Financial Officer John Stephens said in a Q1 earnings call…
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Tuesday (see 1704250067). States have incentives to opt in, including jobs and investments, and opting out presents challenges, Stephens said. “We'll go through that process through the summer and hope to get the states to move as quickly as possible with … encouragement that we are ready to go and the first ones that opt in are going to get that first investment in their states,” he said. FirstNet funding is available only for states that opt in, and states that go it alone “take the risk of any project cost overruns,” he said. Stephens said most states are likely to make a decision in the last quarter of 2017, with first deployments expected next year. Since AT&T will have to wait to be reimbursed for deploying FirstNet, the company could see limited effects on its capex and cash flow, he said. “Our capital spending guidance remains in the $22 billion range, but with FirstNet it could be at the higher end of that $22 billion range,” Stephens said. “Free cash flow is expected to be in the $18 billion range, and it may be a little bit on the low end of the range with the timing of the FirstNet reimbursements.” AT&T “worked it hard” to get the FirstNet contract “and our effort paid off last month,” said CEO Randall Stephenson, also on the call. The 20 MHz of low-band spectrum from FirstNet improves AT&T’s spectrum position, he said. “We now have more than 60 MHz of fallow spectrum that we're ready to light up and we'll be deploying all the bands simultaneously starting this fall when states begin to opt in to the FirstNet,” he said. “The efficiencies we'll gain from climbing the tower once to put up multiple bands of spectrum, those efficiencies are significant. And we're going to see those cost savings and the network performance materialize immediately and then throughout the life of this multiyear buildout.”