AT&T CFO Desroches talks about the carrier's satellite plans
AT&T, T-Mobile, and Verizon are all threatened by, and teaming up with, satellite firms.
AT&T CFO discusses its satellite plans | Image by PhoneArena
Starlink is a major threat to the "Big 3" carriers in the U.S. With its exclusivity deal with T-Mobile over, Starlink can bypass cell towers and offer its direct satellite-to-consumer mobile service. It can also make a deal with MVNOs (Mobile Virtual Network Operators) and sell them wholesale cell service, eliminating the Big 3 and completely eliminating the need to hook up with cell towers.
AT&T is teamed up with satellite firm AST SpaceMobile
During the Mizuho Technology Conference in New York on Tuesday, AT&T Chief Financial Officer Pascal Desroches said that satellite is great, but for only 1% of the population. The executive said that fiber, cable, fixed wireless, and the wireless infrastructure will cover 99% of the country. That 1% that Desroches concedes to satellite firms like Starlink is for those living in rural areas and AT&T's CFO stated that "I think satellite is a great solution for that."
What will be your main use of satellite connectivity for your phone?
AT&T is teamed up with AST SpaceMobile thanks to an agreement that runs through 2030. Under the terms of the deal, space-based cellular broadband is made available to regular smartphones as a way to eliminate cellular dead zones, something which is important to the FirstNet public safety network.
AT&T CFO Pascal Desroches spoke at the Mizuho Technology Conference on Tuesday. | Image by AT&T
AT&T CEO John Stankey says the carrier will team up with multiple satellite firms to cover gaps
AT&T CEO John Stankey has said that the carrier plans to team up with different satellite players to help it cover some of the coverage gaps found in rural areas. By having multiple satellite companies providing service in dead zones, AT&T customers can drive into rural areas and still have seamless service.
Right now, we're focused on what we have in front of us. We have a lot of work to do to continue to execute and monetize the assets recently acquired, and plenty of room to run an organic footprint
Pascal Desroches, AT&T CFO
SpaceX's has made moves to become an alternate wireless provider that would have the satellite firm deliver wholesale wireless to MVNOs, and offer service directly to consumers. This has AT&T, T-Mobile, and Verizon executives so concerned that they formed a joint venture. This won't change the current partnerships that the carriers have independently and directly with the satellite firms. AT&T, as we already noted, works with AST SpaceMobile, T-Mobile with SpaceX, and Verizon with Skylo (for direct-to-device emergency messaging) and AST (for satellite-to-cellular broadband coverage).
By combining their resources, the trio can pool together spectrum and share the costs of building out the needed infrastructure to offer direct-to-device (D2D) service. As AT&T's Desroches has pointed out, by putting their spectrum together, the three joint venture partners can better serve the D2D market than they could individually.
AT&T believes it is in the best position of the Big 3 when it comes to convergence
AT&T's CFO also made it clear that his company is in the best position of the three when it comes to convergence. The latter is the ability to sell mobile cellular service bundled with home broadband internet through a single provider with one bill.
Last year AT&T acquired 30MHz of mid-band 3.45GHz spectrum and 20MHz of low-band 600MHz airwaves from EchoStar. The carrier expects to end the year with 40 million fiber passings, which is the number of potential customer locations it can sell fiber and wireless service to. By 2030, that should expand by 50% to 60 million passings.
Desroches says that the company's focus is on providing service in both urban and suburban areas at prices that can be considered attractive.
When AT&T plans to release its second quarter earnings
With second quarter earnings expected to be released before the stock market opens at 9:30 AM EDT on July 22, AT&T expects to report year-over-year growth in wireless service and Wall Street forecasts that the carrier will announce 250,000 to 300,000 net new postpaid phone subscribers. That would be a decline from the 301,000 reported during last year's Q2, and sequentially it could be higher or lower than the 287,000 net new postpaid phone subscribers that AT&T reported for this year's first quarter.
Since the start of the year, AT&T has seen its stock price decline by 5.5% or $1.35 to $23.21. The 52-week high is $29.79 and the 52-week low is $22.32.
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