Speaker 1: AT and T trading high today as it says they
Speaker 1: see sustained profit growth over the next three years, including
Speaker 1: double digit gains in twenty twenty seven. This is the
Speaker 1: company is really doubling down on its fiber rollout as well.
Speaker 1: I'm pleased to say for more. The AT and T
Speaker 1: CEO John Stankey joins us now from your own named stadium. John,
Speaker 1: let's talk a little bit about twenty twenty nine. You're
Speaker 1: expecting to have fifty million plus total locations with fiber.
Speaker 1: Why this big fiber focus? How do you get there?
Speaker 2: Well, look, we've had great success with what we've built
Speaker 2: thus far, and we see customers, first of all, love
Speaker 2: the product, they stay with us longer, they drive better
Speaker 2: value into the business. We're having great success at selling
Speaker 2: multiple products into fiber households. Four out of every ten
Speaker 2: of our fiber subscribers also subscribe to our wireless service
Speaker 2: today and that's getting higher. And when you think about
Speaker 2: where technology is going in the future, workloads are only
Speaker 2: going to go up. We expect data consumption is going
Speaker 2: to increase about eighty percent over the next five years.
Speaker 2: In Fiber is the one that can do that. It's
Speaker 2: the one that has the symmetrical bandwidth characteristics that will
Speaker 2: facilitate AI and sending more data up into a network
Speaker 2: than what comes down, which is traditionally how broadband networks
Speaker 2: are built today, and we think that's a great investment
Speaker 2: for the law Hault.
Speaker 1: John, Just as you speak, we've got some breaking international news.
Speaker 1: We've just got to bring our viewers of South Korean
Speaker 1: lawmakers voting to request lifting martial law. We will bring
Speaker 1: you up to the moment news. But at South Korean
Speaker 1: National Assembly Speaker Wo is saying they will protect democracy. John,
Speaker 1: we return to you and a US focus and a
Speaker 1: business that you are currently wanting to see, really the
Speaker 1: bandwidth and the broadband and the infrastructure play that you're offering.
Speaker 1: What's interesting is the way that you're fueling investment in
Speaker 1: fiber in particular is by doing innovative partnerships like the
Speaker 1: one with Blackrock. Do you need outside investment to commit
Speaker 1: to this sort of infrastructure rollout?
Speaker 2: Look, we have a great portfolio of options. We primary
Speaker 2: portfolio play is owned and operated where we take one
Speaker 2: hundred percent of the economics. We fund it, build it,
Speaker 2: and operate it ourselves. But we also realize we're in
Speaker 2: kind of a constrained window right now. Fiber is needed now,
Speaker 2: there isn't going to be a window that's open for
Speaker 2: a long period of time to do this work. Capital markets,
Speaker 2: of course, private capital markets sometimes provide a little bit
Speaker 2: of insulation that public markets won't, and in order to
Speaker 2: make sure we keep our lead, will balance that portfolio
Speaker 2: out and our relationship with Blackrock and our gigapower work
Speaker 2: has been really effective. What we've proven in the market
Speaker 2: is that we can operate outside of our traditional operating
Speaker 2: territory just as effectively as we have in our home territory.
Speaker 2: I think Blackrock as a partner, has viewed it as
Speaker 2: being a really successful investment. They've been willing to put
Speaker 2: more into it, and we expect we're going to continue
Speaker 2: to use that as one of the tools to grow
Speaker 2: our footprint over time to get past that fifty million
Speaker 2: we're talking about.
Speaker 1: And it's really interest and you brought up, of course,
Speaker 1: AI and the demands there. In many ways, everyone's been
Speaker 1: ringing the hands of the energy infrastructure needs and black
Speaker 1: Croc sort of funding that infrastructure build out. But how
Speaker 1: significant is the AI demand and the strains on what
Speaker 1: you provide.
Speaker 2: It's an interesting issue. I think actually power consumption is
Speaker 2: going to be really important moving forward. That's one of
Speaker 2: the things we're talking about today with our analysts and investors,
Speaker 2: which is how do we shut down our century old
Speaker 2: copper infrastructure and all the electronics and equipment that support
Speaker 2: it that are really power hungry. And that's one of
Speaker 2: the ways that getting more of this traffic over to fiber,
Speaker 2: which is passive and uses a lot less power, that
Speaker 2: we can actually help to offset some of the increase
Speaker 2: of what data demand and AI will drive moving forward.
Speaker 2: And we think that's a really important policy dynamic on
Speaker 2: this look. I think there's going to be a lot
Speaker 2: of issues that the country has to work through on
Speaker 2: getting the power grid to support leadership and AI. It's
Speaker 2: going to happen. Maybe it gets slowed down a little bit,
Speaker 2: maybe there's a few bumps in the road, but what
Speaker 2: we do know is that demand's going to be continuing
Speaker 2: to go up.
Speaker 1: Well, you're also talking to analysts and investors about today,
Speaker 1: is how you're giving money back big returns investors, whether
Speaker 1: you're doing it through driven in but also through buybacks
Speaker 1: as well. Why have you chosen that angle? Now you've
Speaker 1: paid down debt.
Speaker 2: It's a good day when you're giving more back to shareholders. Look,
Speaker 2: we feel very comfortable with our debt position that we're
Speaker 2: going to arrive at in the middle of next year,
Speaker 2: and that's why we're making this announcement today. First of all,
Speaker 2: we did a really nice job of structuring our balance
Speaker 2: sheet properly, so we've got really attractive interest rates on
Speaker 2: our portfolio of debt. We've got it turned out that's
Speaker 2: a really, frankly, a strategic asset. And the way it's
Speaker 2: set up right now, and given that we're largely investing
Speaker 2: organically in the business, reinvesting in our business like this
Speaker 2: and getting our leverage structure the way it is, feels
Speaker 2: very comfortable to us because every year we're reinvesting in capital,
Speaker 2: reinvesting in assets that we hold. And frankly, when you
Speaker 2: kind of look at some of the m and A
Speaker 2: work we've done as we've restructured the business, we spun
Speaker 2: out certain non strategic assets. We haven't really gone back
Speaker 2: after the equity structure and reducing the share count outstanding,
Speaker 2: and when the dividend yield is still over five percent,
Speaker 2: we've got fantastic dividends coverage. This is an opportunity for
Speaker 2: us to maybe balance that out a little bit and
Speaker 2: bring a little bit of equity back in house.
Speaker 1: Okay, let's talk about that changing over your own portfolio
Speaker 1: of the assets you hold DirecTV moving away. I mean,
Speaker 1: will we see that being integraled to these financial forecasts.
Speaker 2: No, we've actually today as we sit down and talk
Speaker 2: with the investment community, we'll be providing restated constructs under
Speaker 2: ex Direct TV. Assuming that we're going to close up
Speaker 2: by the middle of next year. We still see great
Speaker 2: improvements in our cash flow. We'll expect that we'll probably
Speaker 2: grow cash flow by about a billion dollars a year
Speaker 2: even without direct TV. As we move through this planning process,
Speaker 2: we see acceleration on our EPs, our ebit is going
Speaker 2: to continue to grow. So, you know, Direct TV has
Speaker 2: been really good. It's provided us a lot of cash coverage.
Speaker 2: We did a really nice job of managing the asset
Speaker 2: down to this point. It's time to focus on what
Speaker 2: we're going to do moving forward, which is build a
Speaker 2: world class connectivity business. And it's the right decision to
Speaker 2: make at this point.
Speaker 1: A lot of analysts are echoing that, and we are,
Speaker 1: of course with John Sanky, the eight and TCO to
Speaker 1: our worldwide radio and TV audiences. Many relieve that you're
Speaker 1: getting back to what you do best, which is telecoms.
Speaker 1: Within that though, is you know, some really clear clarity
Speaker 1: being given on the numbers. You're getting forty billion dollar
Speaker 1: plus of anticipate anticipated shareholder returns, fifty billion dollars plus
Speaker 1: of financial capacity over the next three years. What are
Speaker 1: the risks we're at this time of a new administration
Speaker 1: coming in? They are a macro headwinds, global headwinds. Are
Speaker 1: their risks to these numbers?
Speaker 2: Well, I think every time there's an administration change, there's
Speaker 2: usually a discussion about boy could change his negatively impacted business.
Speaker 2: I mean a call four years ago, there was a
Speaker 2: little bit of that narrative going on, and I think
Speaker 2: we'd done just fine for the last four years. And frankly,
Speaker 2: some of the things that I hear right now, tax policy,
Speaker 2: possibly reinstituting accelerated depreciation, those things could be very very
Speaker 2: good for our business. And in fact, when they were
Speaker 2: in place and they weren't lapsing, we were investing at
Speaker 2: a higher level. And so I think if this administration
Speaker 2: incoming administration follows through on what they'd like to do,
Speaker 2: which is to put pro investment policies in place for
Speaker 2: the nations one of the nation's largest capital investors. That's
Speaker 2: going to be a really good thing for us. So
Speaker 2: we watched that carefully, certainly like everybody else. There's other
Speaker 2: policies up in the air around tariffs and a few
Speaker 2: other things that we're all kind of wondering what might
Speaker 2: occur with that. I think same minds will prevail. I
Speaker 2: think some of what we're hearing right now is directed
Speaker 2: to make sure that we negotiate from a position of strength,
Speaker 2: and we make sure that we respect the US market
Speaker 2: as strong and as meaningful as it is, that people
Speaker 2: should play on a fair and level playing field when
Speaker 2: they gain access to it. And I'm hopeful that we'll
Speaker 2: see good policy comes out that drives good investment and
Speaker 2: good economic returns as a result.
Speaker 1: Well, returns are up on your shares you're currently training
Speaker 1: at the high since twenty twenty one. More broadly, do
Speaker 1: you think that you can sustain this sort of growth we.
Speaker 2: Do, Otherwise we wouldn't be out giving the three year
Speaker 2: guidance that we're giving. We feel, first of all, strong
Speaker 2: and the fundamentals consumers need to use more Internet. They
Speaker 2: need to get higher performance networks to support that. That's
Speaker 2: the business we're in, and we're going to talk a
Speaker 2: little bit this afternoon with our investors about our ability
Speaker 2: to manage the cost structure in dealing with that accelerating
Speaker 2: and increased growth so that as customers use more that
Speaker 2: we can ultimately drop more cash to the bottom line.
Speaker 2: And that growth dynamic of us getting more efficient people
Speaker 2: using more of the product, we think that's going to
Speaker 2: sustain itself over the next three years, and that's why
Speaker 2: we gave the guidance that we gave.
Speaker 1: We so appreciate you coming live at and T Stadium
Speaker 1: over in Texas. Johns Thanky at and T cdo