AT&T CEO: 'We're On Track For Nationwide 5G By The First Half Of 2020'

The carrier said it is ahead of the game in 5G, and growth in its wireless segment as well as the strongest business wireline revenues its seen in years paved the way for a strong second-quarter for AT&T.


AT&T's strong focus on next-generation technologies, such as 5G, coupled with "surprising" strength in wireline services led to a solid second-quarter for the second-largest carrier in the country.

AT&T's nationwide FirstNet emergency communications network buildout, which is about 60 percent complete, is helping the carrier get a leg-up on the competition in the 5G space because AT&T is deploying 5G-capable hardware during its FirstNet build, AT&T CEO Randall Stephenson explained during the carrier's Q2 2019 earnings call on Wednesday.

"As a result, we're on track for nationwide 5G coverage in the first half of 2020," Stephenson told investors.

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AT&T is currently offering 5G to both consumers and business customers. AT&T's standards-based mobile 5G network is live today in certain areas of 19 U.S. cities.

[Related: 8 Things To Know About AT&T's Partnerships With IBM, Microsoft]

AT&T's mobility segment continued its momentum, totaling $17.51 billion during second-quarter 2019 compared to $17.28 billion in the same quarter a year ago. The communications business, which includes high-speed internet, video and legacy voice services, rose slightly to $35.51 billion during the quarter from $35.41 billion in the second quarter of 2019.

The carrier reported growth in fiber, with its footprint now reaching a total of 22 million residential and business customers.

While business wireline services stayed mostly flat at $6.63 billion compared to $6.65 billion a year ago, the trend is an improvement over the last several years of declining wireline revenues, said John Stephens, AT&T's senior executive vice president and CFO, citing improvement thanks to strength in strategic and managed services.

"Business wireline trends were best we've seen in years, and when you factor in strong business wireless performance, our business solutions revenue grew 2.3 percent," Stephens said.

Stephenson added that business wireline revenues are benefiting from a strong U.S. economy with "rational" pricing, but did say that China trade discussions have softened the segment slightly.

"We really have picked up a number of new logos in the past year … that business continues to surprise us in terms of how good its doing, and I wish I could say it was because of great execution, but I think it's really about good economic health," he said.

The Dallas-based carrier has also been working diligently on cutting network costs, the most expensive item on its balance sheet, Stephenson said, noting its recent cloud deals with Microsoft and IBM.

"These are not inconsequential deals … We're leveraging IBM and Microsoft who are taking over a lot of applications for AT&T so we can continue on our cost reduction curve on the network side of the house," he said.

AT&T is relying on its WarnerMedia unit, which includes Turner and premium TV channel HBO that it acquired from Time Warner last year, for future revenue growth. WarnerMedia reported revenue of $8.35 billion in the quarter compared to $1.39 billion last year when the deal had just closed.

For the second quarter, which ended June 30, net income was $3.71 billion, down from $5.83 billion in the second quarter of 2019. Diluted earnings per share during the quarter was 89 cents compared with 91 cents one year ago. Total revenue rose 15.3 percent to $44.96 billion from $38.99 billion in the same quarter one year earlier, which the carrier attributed to its acquisition of Time Warner.