AT&T added more than 5 million domestic wireless net adds in Q3
During the AT&T 2020 Q3 earnings call, the latest quarter was summed up as follows: strong connectivity results; business transformation on track; and improved cash flow. Digging deeper into these assessments shows that the company saw solid wireless and HBO subscriber growth, as well as fiber broadband additions.
More specifically, AT&T’s consolidated revenues for the third quarter totaled $42.3 billion. In wireless, it says it saw 5 million domestic net additions, of which around 1 million were postpaid net additions, including 645,000 postpaid phones. Prepaid net additions were 245,000, of which 131,000 were prepaid phones. The company’s AT&T Fiber net adds and total broadband net adds both reached a record high of 357,000 and 158,000, respectively. Further, the company reported that total domestic HBO and HBO Max subscribers topped 38 million, exceeding the year-end target of 36 million. Total subscribers worldwide was 57 million.
“We delivered a solid quarter with good subscriber momentum in our market focus areas of connectivity and software-based entertainment,” said John Stankey, AT&T CEO. “Wireless postpaid growth was the strongest that it’s been in years with one million net additions, including 645,000 phones. We added more than 350,000 fiber broadband customers and are on track to grow our fiber base by more than 25% this year. And we continue to grow and scale HBO Max, with total domestic HBO and HBO Max subscribers topping 38 million — well ahead of our expectations for the full year.”
In fact, the strong quarter resulted in an updated guidance, with the company now expecting 2020 free cash flow of $26 billion or higher, with a dividend payout ratio in the high 50s%.
“Our strong cash flow in the quarter positions us to continue investing in our growth areas and pay down debt,” Stankey commented.
AT&T also continues to expect gross capital investment in the $20 billion range in 2020.
Despite the positive results, the impact of the COVID-19 pandemic was felt across all businesses, particularly WarnerMedia due to the halt in movie production. AT&T added that many of these film projects have picked up again. AT&T also took a revenue hit in domestic wireless service revenues, primarily from lower international roaming.
However, these, and other revenue declines, were partly offset by higher wireless equipment revenues and higher advertising revenues associated with timing shift of sports from the first half of 2020.
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