AT&T Inc at Goldman Sachs Communacopia & Technology Conference Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Jim Schneider - The Goldman Sachs Group, Inc. - Analyst : Great. And then I just want to start with a very high-level our question. You've been CEO for just over four years now, I believe and --

Question: Jim Schneider - The Goldman Sachs Group, Inc. - Analyst : (laughter) Just help us understand, you know, if you think about your tenure, what do you think is the biggest accomplishment you've made thus far as CEO? What's perhaps the one action that's going to have a lasting impact on the company that maybe investors don't see or appreciate?

Question: Jim Schneider - The Goldman Sachs Group, Inc. - Analyst : And I won't get into that in detail because I think it's very good story to tell there. But maybe just starting to dive in with the wireless market for a second. I think if you look at that market, it's one where gross subscriber additions have continued to sort of outpace and defy expectations for a slowdown for a while now. In terms of normalization, I think we've seen net adds about 4 million in the first half of the year alone. Maybe just give us an update on what you've seen before this quarter in terms of kind of market activity, growth additions in the market? And are you still expecting to see relatively healthy market momentum heading into year-end?

Question: Jim Schneider - The Goldman Sachs Group, Inc. - Analyst : Yeah. Good to hear. I mean I think it's fair to say also to your point, over the past few years, the mobility performance has improved pretty substantially for the company. In the past, you said that's because of a focus on the consumer, things like the next step upgrade plans and others. Maybe just kind of articulate some of the other biggest drivers of that? And like what do you think those continue to be sustainable?

Question: Jim Schneider - The Goldman Sachs Group, Inc. - Analyst : One of the things I think is notable about the industry structure right now is pricing dynamics because they seem to have finally started to move in the right direction again, a pretty healthy spot for the industry. It seems not only just for you, but for your competitors as well. As you think prospectively about the sustainability of ability to kind of take price for value over time, structurally, do you think that's sustainable?

Question: Jim Schneider - The Goldman Sachs Group, Inc. - Analyst : One question about competition in the wireless space. I mean I think your cable competitors continue to add wireless subscribers in marketplace. I think you've been somewhat skeptical of their ability to kind of compete over the long term given their lack of owners economics. But maybe just refresh our -- your view on how cable companies, you see them as competitors? And whether you expect them to sort of behave as aggressively as they have in the past in terms of price subsidy levels and so on?

Question: Jim Schneider - The Goldman Sachs Group, Inc. - Analyst : Sure. maybe kind of moving on to the AI smartphone cycle, which has been the headlines recently. We all see the upgrade rates for the industry are about as low as they've been. And I think there's some excitement about the new phones that are out there, that incorporate the AI, specifically the next iPhone got then launched yesterday, we got your offers this morning, with respect to that. Maybe just kind of think about what this means for AT&T in terms of how compelling this project is going to be for consumers? How much you're willing to subsidize that and whether we should be at all worried about elevated churn rates over the next few quarters as a result?

Question: Jim Schneider - The Goldman Sachs Group, Inc. - Analyst : I wanted to kind of pivot and sort of talk about fiber and broadband in a little bit more detail. You alluded to in your opening. I think you've just generally talked about the -- how you see your reordering of assets at the industry level large kind of fiber backbone, different access technologies sort of hanging off of them. And maybe just kind of talk about the implications for AT&T and the rest of the industry. I think you've been very clear about kind of building more fiber in your footprint and that being a strategic priority for you. So you've also talked about the notion of convergence and getting synergy between those different parts of your business. You've also alluded to higher market share in wireless where you have fiber. So maybe talk about where you think the industry is headed over the long term from a structural perspective and maybe go from there.

Question: Jim Schneider - The Goldman Sachs Group, Inc. - Analyst : And so you've talked already about in footprint getting to $40 million, $45 million by the end of the decade. You just alluded to the BlackRock partnership. You just alluded to some of the open access partnerships you just announced. Maybe just talk about kind of the ambitions for out of footprint? And is it a combination of all those tools we just talked about, which ones do you think are going to be likely most effective? And I guess a bigger question is, what is your scale ambition out of footprint as well as in?

Question: Jim Schneider - The Goldman Sachs Group, Inc. - Analyst : Got it. And in terms of the mix of partnerships you go to do that, do you have a sense of what you prefer?

Question: Jim Schneider - The Goldman Sachs Group, Inc. - Analyst : Got it. And then in many cases, you're going into markets where cable is incumbent. Maybe give us a sense about -- I mean, this has been happening for a while now, but obviously, it seems to be intensifying to some extent. So maybe give us a sense of what you anticipate the competitive response to be? And what do you think is going to change at all?

Question: Jim Schneider - The Goldman Sachs Group, Inc. - Analyst : Yeah. I want to -- a quick macro question for you. I mean, say the US consumer has been the big topic of debate among investors. You touch a lot of them. You also see the business roundtable, you see what business is, both in terms of your own business and also through that venue. So maybe give us a sense about how do you see the state of the US consumer and the US business right now? Any signs of a slowdown or any signs of distress on the consumer side? And in terms of businesses propensity to spend more or less or the same, how do you see it? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 10, 2024 / 3:10PM, T.N - AT&T Inc at Goldman Sachs Communacopia & Technology Conference

Question: Jim Schneider - The Goldman Sachs Group, Inc. - Analyst : Very fair. Capital allocation, something you alluded to earlier, you've said that you'll be at your target leverage rate of 2.5 times by the first half of next year. So how are you thinking about the decision coming up in terms of the different options available to you, debt paydown, increasing dividend versus buybacks and kind of maybe help us understand what the Board is thinking about?

Question: Jim Schneider - The Goldman Sachs Group, Inc. - Analyst : Yeah, yeah. And we feel, I mean, broadly okay with kind of the level of kind of CapEx and other investment envelope you have today, given all the activities you've been doing and kind of keeping that pace of -- over there.

Question: Jim Schneider - The Goldman Sachs Group, Inc. - Analyst : Excellent. Last place I want to end, I think is just on the topic you mentioned before, which is supply and specifically spectrum and specifically kind of federal policy around that. Maybe talk about kind of how you're thinking about your overall kind of supply in the wireless business over time, what you think needs to get at the federal level in terms of making more spectrum available and how high is the urgency level as you see it today?

Question: Jim Schneider - The Goldman Sachs Group, Inc. - Analyst : I guess, a topic of national importance. It's a great place to leave it. So thank you very much for being with us today.