AT&T Video Losses Accelerate and Stock Falls; Executives Pleased With 5G, FirstNet

AT&T has deployed 5G in parts of 19 markets, with plans to cover 200 million POPs by the end of next year, Chief Financial Officer John Stephens said Wednesday on Q1 results. “Our plans for 5G are going quite well,” he told investors and analysts. “We’re very optimistic. We’re leading in 5G.” But the company won’t see an uptick in revenue until next year, he said. The stock closed down 4.1 percent to $30.79 as analysts said some results like video losses lagged behind expectations. The FirstNet build has hit 53 percent competition, with a goal of 60 percent by the end of Q3, Stephens said. “We’re well ahead of schedule.” Putting new spectrum in play is “working and it’s working in the quality of the network,” he said. Customers get that the quality of the network is improving, said CEO Randall Stephenson. “We’re not going out and doing a lot of aggressive promotions and we’re not doing pricing to try to get customers to stay,” Stephenson said. “It is happening just organically.” AT&T customers like the 5GE, or 5G evolution, service and are finding it to be faster than 4G, he said. “It is truly a step-change difference in product capability,” Stephenson said. “This is the No. 1 area that I am most pleased with.” FirstNet now has 570,000 subscribers at 7,000 agencies, with many new customers, Stephenson said. “This is driving a not inconsequential impact in subscriber gains,” he said. “We continue to be more enthused about [FirstNet] than when we won the bid.” AT&T reported 204,000 postpaid net losses in Q1 “with losses in tablets offsetting gains in wearables and phones.” The company added 79,000 postpaid smartphones, but lost 428,000 tablets and other branded computing devices. Postpaid churn was 1.17 percent, up from 1.06 percent the same quarter last year. DirecTV Now, AT&T’s streaming service, lost 83,000 subscribers and the number of premium video subscribers declined by 544,000. Stephenson warned that more losses are on the way. Net income attributable to AT&T fell to $4.1 billion, from $4.66 billion. Total revenue rose almost 18 percent to $44.83 billion compared with a year ago. Wells Fargo’s Jennifer Fritzsche saw results as mixed. “Mobility offered a pleasant surprise as the postpaid phone additions were in stark contrast to where the Street was looking,” she said. “While Entertainment Group financials were in-line, the video losses continue to be worse than expected.” New Street’s Jonathan Chaplin saw the results as “uninspired.” The quarter “was a mixed bag for AT&T: subs grew in Wireless, but were worse than expected in the Entertainment group,” Chaplin told investors.