Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: Welcome to our Bloomberg TV and radio audiences worldwide. We
Speaker 2: bring in AT and T CEO John Stanky, the company
Speaker 2: reporting results this morning that showed higher than expected subscriber growth,
Speaker 2: though some analysts noting customer churn and average revenue per
Speaker 2: user showing signs of strain. John, It's great to have
Speaker 2: you back with us, you know.
Speaker 3: With your story.
Speaker 1: Thanks for having me.
Speaker 3: You're welcome. It's like a simple story. You know.
Speaker 2: The data from the quarter is very clear there was
Speaker 2: an element of promotion and marketing and deals that drove it.
Speaker 3: But how would you summarize it.
Speaker 1: Look, we had really strong growth, as you indicated, and
Speaker 1: we're really comfortable with our growth. As I think you're
Speaker 1: probably aware, we've been focusing on customers that want to
Speaker 1: buy both wireless and broadband from us and what we
Speaker 1: can do that and if it's promotional, that's a good
Speaker 1: customer to pick up because they have great lifetime values
Speaker 1: and over time they'll churn us and they'll address that
Speaker 1: very issue that you alluded to, which is the increasing
Speaker 1: churn in the industry. And we kind of anticipate as
Speaker 1: we acquire these customers, we're going to see a little
Speaker 1: bit of hardpoop pressure, partly because we obviously give them
Speaker 1: a better price for their loyalty, and over time we
Speaker 1: move them up on the continuum services we sell. So
Speaker 1: excuse me, buy and large. We feel really good about it.
Speaker 2: Oh, John, I don't know if you have some water
Speaker 2: there with you, Let me give you a second, just
Speaker 2: to take a quick drink if you need it. Of course,
Speaker 2: in the quarter, and we've discussed this with a number
Speaker 2: of the carriers, it was iPhone seventeen. You know, I
Speaker 2: was there at Kubatino Apple Park on the day of
Speaker 2: its release. Can you give us a real term sense,
Speaker 2: even if it's from the promotion perspective, of how big
Speaker 2: a fact of the iPhone seventeen was for you?
Speaker 1: Well, I think it's it's not a huge factor, but
Speaker 1: clearly there was a little bit of suppressed activity after
Speaker 1: the last iPhone cycle a year ago. Maybe some folks
Speaker 1: anticipated it was going to be a little bit larger
Speaker 1: customers were seeing if it was really frame breaking and
Speaker 1: change and concluded possibly that it wasn't and delayed waiting
Speaker 1: for the next cycle. And I think you can only
Speaker 1: suppress that activity for so long, and now the new
Speaker 1: device comes out, people see what it is. So there
Speaker 1: has been an increase over last year and maybe some
Speaker 1: other previous years. It's not a record breaking cycle, but
Speaker 1: it's strong and we're seeing that as a result. But
Speaker 1: I don't think it's anything dramatically out of pattern, given
Speaker 1: the suppression we've seen in the market, and we were
Speaker 1: very effective at working through at four hundred thousand over
Speaker 1: four hundred thousand postpaid vone netads. It shows we can
Speaker 1: compete in that space and do well with it.
Speaker 2: If you're joining us on Bloomberg Television and Radio. We're
Speaker 2: speaking to AT and tco John Stanky final on the
Speaker 2: iPhone seventeen. Will it be more of a factor in
Speaker 2: the three month period that ends in December?
Speaker 1: The holidays, Well, the holiday season moving through the fourth
Speaker 1: quarter is always a peak season for everybody in the industry.
Speaker 1: I expect that's going to continue to be the case
Speaker 1: this year. I don't see anything what we've had over
Speaker 1: the first couple of weeks of the introduction to suggest
Speaker 1: we're going to see a step function change from current
Speaker 1: rate and pace. So all of our forward guidance that
Speaker 1: we've given expects that it's going to be competitive, that
Speaker 1: we're going to compete and continue to earn our fair
Speaker 1: share of service revenues on those converged customers I talked about,
Speaker 1: and I expect that it'll be as rambunctious in the
Speaker 1: industry as it has been and we'll do just fine.
Speaker 3: John.
Speaker 2: If I turn on my television and watch a show
Speaker 2: that has adds or a scroll on any given social
Speaker 2: media timeline, I keep seeing AT and T talking about
Speaker 2: itself as a home internet provider.
Speaker 3: I know that's been a priority.
Speaker 2: Have you any evidence that that push has been a
Speaker 2: success and that you have positioned AT and T in
Speaker 2: that domain.
Speaker 1: Well, I'm glad you're seeing those means we must be
Speaker 1: getting our right market and targets out there, and I
Speaker 1: think this quarter was an excellent example of it. We
Speaker 1: had our best broadband gain on our strategic products and
Speaker 1: services fixed, wireless and fiber that we've had in eight years,
Speaker 1: and so over five hundred and fifty thousand ADS on
Speaker 1: those strategic products and a net gain of over two
Speaker 1: hundred and thirty thousand of broadband total. It's the best
Speaker 1: we've done in eight years. I think that's a good
Speaker 1: strong indication that it's working, especially when you consider the
Speaker 1: industry has been rife with examples of our competitors adjusting
Speaker 1: their offers, trying to do different things to stem the
Speaker 1: momentum we've had. So I feel really good about where
Speaker 1: we're going on that front, and to the effect we
Speaker 1: can add that with wireless subscribers, which we're showing that
Speaker 1: we can do over fifty percent of the time when
Speaker 1: somebody buys our fixed wireless product and we're over forty
Speaker 1: one percent penetrated on our fiber base, that's a winning
Speaker 1: combination economically and what kind of differentiates us from everybody
Speaker 1: else in the industry.
Speaker 2: Okay, shares a down a touch more than one percent,
Speaker 2: which in the grand scheme of today is modest, is
Speaker 2: a decline. The back and forth you had with the
Speaker 2: analyst was, yes, churn is up and arpus are down,
Speaker 2: but you seem not to be concerned about that. Why
Speaker 2: Why is that not the metrics by which we should
Speaker 2: should look to progress.
Speaker 1: Yeah, it's part of it, I think ed as well
Speaker 1: as we've got a little bit of churn going on
Speaker 1: in the industry from CEO changeouts, and there's a little
Speaker 1: uncertainty around what the competitive posture is going to be.
Speaker 1: And then you look at the data points you just
Speaker 1: reference and we're the first to report, and people are asking,
Speaker 1: you know, what's going to happen when we hear from
Speaker 1: everybody else, And my answering your question is, we're going
Speaker 1: to talk about the fact that we're focused on putting
Speaker 1: customers together with wireless and broadband, and part of that
Speaker 1: dynamic is go penetrate segments that we've not been successful
Speaker 1: at penetrating or as successful. So when we go to
Speaker 1: value segments that were maybe a little under shared in
Speaker 1: you're going to naturally have a little bit less urpoo
Speaker 1: or average revenue per user when you pick that customer up.
Speaker 1: And when you combine wireless and broadband together, you may
Speaker 1: be giving initially a little bit better deal to do that,
Speaker 1: but that's designed into the plan. We want to grow
Speaker 1: and aggregate service revenues, which we've demonstrated that we can
Speaker 1: do that. We indicated we're going to see some strengthening
Speaker 1: of that as we move through the year from where
Speaker 1: we were this quarter. And I'm okay with a little
Speaker 1: bit lower urpoo if we actually execute on this consolidated
Speaker 1: customer strategy or more successful at penetrating some of these
Speaker 1: segments that we haven't been as active in.
Speaker 2: John Stanky at and TCO, it's great to have you
Speaker 2: back here on Bloomberg Tech.
Speaker 3: Thank you very much,