AT&T Inc Q3 2024 Earnings Call Transcript

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

Question: Simon Flannery - Morgan Stanley Co. LLC - Analyst : John, you mentioned in the fourth quarter, we expect seasonally higher phone purchasing activity upgrades and promo cycles. Can you just put some context around that you've continued to see low upgrade activity. There's concerns about a bigger iPhone cycle. What are you expecting in the fourth quarter and longer term as Apple introduces AI, et cetera? And then just one on the business wireline. Any kind of light at the end of the tunnel there? How much more of the sort of pressures do you think we get before the rate of change starts to stabilize and improve?

Question: John Hodulik - UBS Securities LLC - Analyst : I don't want to jump in too much on the December event, but can we talk a little bit about the out-of-region opportunity with fiber. I guess, first, how did you guys or what was the criteria for selecting the partners that you have? And are there more partners likely to be added? Second, how big could that opportunity be, I guess, including GigaPower? And third, are you guys seeing the churn benefits? I guess, you sort of laid out the customers that have bundled service, but are you guys seeing churn benefits in the wireless business for customers that have that take both services?

Question: Peter Supino - Wolfe Research, LLC - Analyst : A question on consumer broadband and one on capital allocation. In Consumer broadband, your Internet net add growth stabilized despite your announcement that you've launched about 204 partial regions last quarter. And so I wonder if you could comment on the relationship between that open for sale change and the growth path of Internet are just bigger picture. And then on capital allocation -- on the M&A front, I wonder if you have a point of view on HFC assets on cable assets where they could possibly be complementary to your fiber strategy depending on the region and the assets you have in place.

Question: David Barden - BofA Global Research (US) - Analyst : John, I do remember when you had hair, so you look great. So John, I wanted to ask this question, which is maybe the inverse of the GigaPower question, which is as you think about how you're building fiber out in your territory and as you make these new decisions about what's coming next, is the fiber build in your territory walled garden that's only for AT&T's benefit and however much share you're able to get is the share you get? Or is there a thought that maybe AT&T wants to be an open access provider and the parts of the market that it doesn't access directly, you can at least participate in on a wholesale basis the way you historically were talking about maybe the wireless business and the cable relationship? And then the second question, if I could, Pascal, I think you were reiterating the guidance, the -- I think I missed the line that said that 2025 earnings growth would be positive. Obviously, there's lots of moving parts, but could you just step us through kind of the thought process on taking that out.

Question: David Barden - BofA Global Research (US) - Analyst : I am.

Question: David Barden - BofA Global Research (US) - Analyst : Right back at you, John.

Question: Michael Rollins - Citi Investment Research (US) - Analyst : Curious if you could provide an update on the wireless competitive landscape broadly across the consumer and business verticals. And if you can unpack in a little bit more detail what's driving the growth in postpaid phone ARPU on a year-over-year basis and how you view the sustainability of postpaid phone ARPU growth over the next couple of years?

Question: Jim Schneider - Goldman Sachs & Company, Inc. - Analyst : If we consider the pace of your fiber net additions broadband heading into next year, if you're passing the same or more locations with better penetration, is there any reason to believe why those fiber net additions shouldn't accelerate next year? And then relative to CapEx, I believe we heard from one of your competitors yesterday that CapEx is moving higher in 2025, mainly due to accelerated fiber investment. And then obviously, this is an area where you've been the most vocal in your industry in terms of fiber expansion, is expect you would see the same trend in your CapEx next year?

Question: Sebastiano Petti - J.P. Morgan Securities LLC - Analyst : Housekeeping question. I think last quarter, you pointed out that the postpaid phone ARPU should probably, you see more of an impact or more of a benefit in the fourth quarter than third quarter related to the price increase that kind of went into effect mid 3Q. Is that still the right way to kind of think about it? And relatedly, of the $90 million onetime benefit, is that within postpaid phone ARPU? Or is that perhaps captured somewhere else within service revenue? And then maybe, I guess, broader kind of question. I mean, John, you did talk about the 4.9 gigahertz award to FirstNet for AT&T, obviously, I think at Communacopia, did kind of talk about the supply of spectrum likely influencing pricing across the industry over the next several years, an election upcoming in a few weeks here, probably not going to materially change the availability of spectrum for a few years. So just thinking about AT&T's appetite, given your peer kind of did some transaction in the secondary market just last week. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 23, 2024 / 12:30PM, T.N - Q3 2024 AT&T Inc Earnings Call

Question: Kannan Venkateshwar - Barclays Capital Inc. - Analyst : Maybe a couple on '25. I know it's a little early for you the to start talking about it. But maybe if we could just understand the levers, I mean, operating leverage this year has been very high. especially on the mobility side because of upgrade rate and also churn being low, of course. So if you could just talk through maybe some of the levers next year, maybe on the cost front or maybe the price versus value dynamic. That would be helpful. And the same question on cash flow, just in terms of leverage, you -- obviously, taxes will be a headwind. But when the financing in theory should be an easier comp and directly, of course, would be depending on when the deal closes, that would be another variable. So if you could just help us think through the operating leverage side and the cash flow that would be helpful. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 23, 2024 / 12:30PM, T.N - Q3 2024 AT&T Inc Earnings Call