AT&T Plans to Deploy 3.45 GHz, C Band Concurrently Starting Mid-Year
AT&T plans to deploy much of its C-band spectrum at the same time it deploys the 3.45 GHz licenses it bought in a recent FCC auction, CEO John Stankey told analysts on the company’s Q4 call Wednesday. Stankey said the radios needed for 3.45 GHz should become available in late spring or early summer. Installing the bands “together at one time with one tower climb … allows us to start really going what I would call good guns on this in scaling up,” he said. AT&T has followed a similar one-touch strategy in building out FirstNet spectrum.
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AT&T expects to cover 200 million POPs with its new 80 MHz of mid-band by the end of next year, said Stankey. Based on the price of changeovers in air interfaces, he expects deployment costs to run about $8 billion spread over several years. AT&T bid $9.1 billion in the 3.45 GHz auction and $23.4 billion on the C band and is likely on the hook for an additional $4 billion in incentive costs. AT&T also expects to pass 30 million fiber locations by the end of 2025, Stankey said on the call.
Verizon didn’t bid in the 3.45 GHz auction, and on a call Tuesday executives emphasized its work turning on C-band licenses (see 2201250061)
AT&T executives also reported progress on the company's major media deal. AT&T is “encouraged with how the process for the WarnerMedia deal is progressing and [we] now expect the transaction to close” in Q2, Stankey said. Most discussions have been with U.S. regulators and “all that is going right to pattern as we expected,” he said: “We don't see anything that causes us concern. … There's still work to be done, always is. There are a lot of moving parts.”
The company reported net income of $5 billion in Q4, on revenue of $41 billion. It had a $4.7 billion revenue drop tied to selling its U.S. video business and its Vrio business in Latin America. AT&T said at the end of Q4 it had 73.8 million HBO and HBO Max subscribers worldwide.
AT&T won’t start mid-band deployment until mid-year because it's “waiting for radios that can handle C-band and 3.45GHz,” New Street’s Jonathan Chaplin told investors: “That suggests a torrid pace of deployment over six quarters. But plausible.”
“That AT&T acquired its latest tranche of mid-band spectrum for considerably less per MHz POP than did buyers in the C-Band auction is good news,” said MoffettNathanson’s Craig Moffett. The 3.45 GHz spectrum “helps narrow the spectrum gap versus Verizon considerably,” he said: “T-Mobile will still be advantaged (versus both AT&T and Verizon), but the differences will be smaller, with perhaps larger regional differences, than would otherwise be the case.”
JP Morgan downgraded Verizon to neutral after Tuesday’s earnings report and warned of slowing post-paid phone growth in the wireless sector in general. AT&T already reported adding 880,000 post-paid subscribers in the quarter, topping Verizon and T-Mobile (see 2201060063). AT&T's stock closed 8.4% lower Wednesday at $24.24.