AT&T Projects Q2 Postpaid Adds Below Q1 Levels
AT&T provided some of the first subscriber projections for Q2 Tuesday, putting postpaid phone net adds in the range of about 300,000, below the 476,000 forecast by Wall Street analysts. AT&T Chief Financial Officer Pascal Desroches cited the numbers in…
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a Bank of America conference. AT&T expects a “normalization of overall industry growth” in 2023, compared with the “elevated levels of growth” in the past two years, he said. AT&T reported 424,000 postpaid phone net adds in Q1 (see 2304200059). The AT&T wireless team is performing well. Desroches said: “We went from a place where we weren't growing. We were losing share. … Now we have added share. We're growing wireless service revenues. We're growing [average revenue per user]. We're growing profits.” AT&T isn’t losing wireless subscribers to cable, he said. Desroches dismissed rumors earlier this month that Amazon may work with other major wireless carriers, but not AT&T, to offer free or low-cost wireless service (see 2306020055). “This was a rumor about nothing,” he said. Amazon already has a penetration “north of 80% of US households,” he said. “Would they really enter into a variable pricing construct for an incremental 5%, 10%?” Desroches asked. AT&T is on track to meet or exceed a goal of generating $16 billion in free cash flow this year, he said. Cash flow has been an analyst concern for AT&T in several recent quarters. T-Mobile CFO Peter Osvaldik told the conference T-Mobile remains optimistic about postpaid growth in Q2. “We do see slight industry normalization from what we saw in elevated 2022 levels,” he said. T-Mobile growth will come because the company offers “the best product at the best price, combined,” he said. T-Mobile is picking up enterprise and government customers, markets where its share was historically below 10%, he said. Osvaldik said customers are reporting higher satisfaction levels with T-Mobile’s Home Internet product than they had with cable and fiber broadband. Fixed wireless remains “an amazing opportunity,” he said. T-Mobile expects Dish Network to emerge as a postpaid competitor, he said. “I would never put anything past” Dish Chairman Charlie Ergen, he said: “I think he's a fierce competitor. We certainly have a good working relationship and we're here to support them.” Osvaldik also downplayed the Amazon rumors, noting Dish Wireless uses T-Mobile’s network and “our arrangement with Dish doesn't allow for resale of our network to a different brand -- under a different branding construct.”