AT&T, T-Mobile CEOs Agree: Wireless Competition Is Strong but Rational

T-Mobile CEO Mike Sievert and AT&T CEO John Stankey had a similar message at the UBS conference Tuesday. Wireless competition in the U.S. is thriving, but the big carriers' investments are rational as they target higher average revenue per user. Stankey also discussed AT&T's open radio access network strategy (see 2312050049).

The wireless sector is “healthy and vibrant,” Sievert said. “This is a highly competitive industry, but it's also a very valuable industry,” he said.

While carriers are competitive in adding subscribers, they’re also “very diligent around trying to walk customers up to higher returns with better ARPUs and trying to keep them longer … and they're doing it in a very appropriate and rational fashion,” Stankey said. While AT&T didn't release early results, he projected net growth in subscribers over Q3.

“We've got a formula here that's really resonating,” Sievert said: “We're out there marketing this world's best 5G network.” That will be the continuing message from T-Mobile, he added.

Customers are getting service that’s 5X faster than five years ago, Sievert said. Subscribers and the industry are “winning,” he argued. “That's the 5G dividend that everybody has been looking for. It's right there in front of our face.”

Cable wireless isn’t “the bogeyman that's coming,” but the one that showed up five years ago, Sievert said. Cable has become a “real vibrant player” in wireless, contrary to the expectations of some, but competition gets more difficult as time goes on, he said. You might see promotions from cable, “but that's because they're trying to outrun their own churn as they get bigger, and that's just a normal dynamic of a subscription business,” he said: “I'm not discounting their contribution and that they're building a business for themselves.”

More than 60% of T-Mobile customers are opting for premium monthly rate plans, Sievert said. When customers switch to T-Mobile it’s “because they want the best 5G network, and when they get here, they want rate plans that unleash that network for them.”

BEAD Questions

Stankey told investors he welcomes government investment in broadband, including through the broadband equity, affordability and deployment program, as long as the money is spent wisely. If it's a good policy for the U.S., “it's a good policy for AT&T,” he said: “I do get a little worried. We're all taxpayers. We all want the money to be spent effectively.”

The states seem to be all over the place on how they plan to use broadband funds, Stankey said. Some states want to reshape the structure of the industry, and “drive smaller providers and more entrepreneurialism into the sector,” he said. “I'm skeptical that you can necessarily be successful in what is … a scale business,” he said.

Stankey continues to question the relevance of proposed net neutrality rules (see 2310190043). Unlike earlier years, consumers aren’t demanding FCC action, he said. “Maybe there's kind of an apathetic tone on the issue right now because there isn't an issue,” he said. Consumers aren’t having trouble accessing the internet because of anything their provider did, he said: “Why are we spending scarce time and energy, resources, policymaking capability on a topic that really isn't today's burning bush?”

AT&T still has questions about fixed-wireless access, Stankey said. “Fixed wireless is great in the business space” for customers who aren’t “sitting around streaming Netflix all day long and driving massive consumption levels.”

“Cable is a very capable competitor,” Stankey acknowledged: It “would be very wrong to discount what they can do in the market. … They've been effective in places where we are under-penetrated. They've been effective in the smaller one- and two-line type accounts.”