AT&T reported increased company revenues and solid growth in its wireless segment, driven in part by a bump in device upgrades.
AT&T’s consolidated company revenues for the first quarter were $43.9 billion, up 2.7% from $42.8 billion in the first quarter of 2020.
“Our execution has been sharp, and we have momentum,” CEO John Stankey said on the company’s call with investors, adding that the company is growing its customer base across wireless, fiber and HBO Max. “We’re doing it the right way, with a focus on growing profitability,” he said.
Higher equipment revenues led to mobility segment revenues jumping 9.4% compared to the same period last year — equipment revenues themselves were up more than 45% from the same quarter last year, although AT&T noted that last year’s first quarter was unusually low because of Covid-19-related store closures impacting device sales. Service revenues were up just 0.6% compared to the same period last year, with subscriber gains offsetting declines in international roaming revenues, the carrier said.
However, with higher equipment revenues also came higher equipment costs: AT&T saw higher domestic wireless equipment costs impact its operating expenses, bringing them up to $36.3 billion from $35.3 billion in the year-ago quarter.
AT&T gained 823,000 postpaid net additions, of which 595,000 were postpaid phone net adds. Postpaid phone churn was 0.76%, falling from 0.86% in the year-ago period; overall postpaid churn was 0.93%, down from 1.08% at the same time last yearThe carrier tallied 207,000 prepaid phone net adds and said that its prepaid churn was at a record low of less than 3%.
Asked on the quarterly call about AT&T’s plans for its C Band, Stankey said that the carrier plans to begin turning up some markets late this year; the first tranche of C Band spectrum is expected to be cleared in December. AT&T doesn’t expect to make any changes to deployment or capex guidance; Stankey said that C-Band prep is already built into its current plans and one of the factors going into current decisions on work. “There are things that we can do today, as we’re touching towers and doing things in parts of the infrastructure that … maybe aren’t going to be in service until later in ’22, that we can do a little more efficiently to pre-provision some things and not go back and touch them a second time,” he said. Stankey didn’t add much detail to what AT&T provided at its recent investor day, but he expressed some concern about global supply chains being “stretched” and adding that with the current supply chain dynamics, it’s possible that equipment shortages could crop up.
Other highlights from the results:
-WarnerMedia’s revenues for the quarter were up nearly 10% to $8.5 billion, rebounding from some pandemic impacts and driven by 12.6% growth in subscription revenues from HBO and HBO Max and higher advertising and content revenue. CFO Pascal ??? said that AT&T expects 2021 to be a “transformational year” for its WarnerMedia business.
-AT&T’s business wireline revenues dropped 3.5% year-over-year, which the company said was due to “lower legacy service demand as customers shifted to more advanced IP-based offerings.” AT&T said that its fiber serves more than 650,000 U.S. business buildings and connects more than 2.5 million domestic business locations, with more than 9 million business customer locations on or within 1,000 feet of its fiber.
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