Pascal Desroches Says AT&T to Lift Subscriber Growth, Reduce Costs, Invest for Growth

March 22, 2022

Speaking on March 14 at the Deutsche Bank Media, Internet & Telecom Conference, the chief financial officer of AT&T, Pascal Desroches, said the wireless carrier intends to grow its number of subscribers while making capital investments.

A statement from AT&T said that Desroches expressed AT&T’s growth strategy as a standalone company following the pending close of the WarnerMedia transaction.

“AT&T intends to become America’s best broadband provider, underpinned by a best-in-class network with fiber at its foundation and integrated with wireless,” the statement reads.

AT&T said that it expects to support additional wireless subscriber growth with a go-to-market strategy that would increase penetration in underserved customer segments and cross-sell wireless services into its expanding fiber footprint. It said the company would continue to optimize its cost structure via ongoing transformation initiatives, with opportunities to derive an additional $2.5 billion in cumulative cost savings over the next two years to reach a previously announced goal of $6 billion in run-rate cost savings by the end of 2023.

In addition, AT&T said it expects to maintain a total-return oriented capital allocation strategy with a focus on investing for growth, with capital investment in the $24 billion range for 2022 and 2023, and strengthen its balance sheet. At the same time, AT&T said, the company would deliver returns to shareholders via a dividend.

Desroches discussed near-term business trends.

“As already stated, the company expects to step up investment in 2022 to support its fiber rollout and mid-band 5G spectrum deployment,” the statement reads. “This investment in growth, combined with additional investment to support the ongoing rationalization of AT&T’s business wireline portfolio, is expected to drive a corresponding year-over-year increase in capital investment. Additionally, as noted during its analyst day, the company expects about $600 million in headwinds to adjusted EBITDA from its 3G shutdown costs and the absence of CAF II credits, weighted to the first half of the year and particularly the first quarter of 2022. As these headwinds abate, the company expects its adjusted EBITDA trajectory to improve throughout the year.”

Desroches also said that AT&T has continued to see healthy trends in wireless sales in the first quarter after leading the industry in postpaid phone net additions in 2021.