AT&T hosted a two-and-a-half-hour online analyst and investor meeting on Friday where the company outlined its overall strategy for exiting the media industry and doubling its sales of 5G and fiber connections.
During the event, the company outlined some of its financial and business expectations for 2022 and 2023, and several company officials discussed exactly how AT&T plans to achieve its goals.
Perhaps the main plank of AT&T’s strategy is to shut down its copper DSL network and expand fiber to about 30 million locations over the next few years. “Wherever fiber goes, wireless follows,” boasted Jeff McElfresh, CEO of AT&T Communications.
That said, AT&T has offered some new insight into its maturing 5G strategy. Here are four 5G takeaways from AT&T’s event:
1. AT&T’s midband 5G configuration follows that of Verizon and T-Mobile.
AT&T executives said the company plans to cover 70 million people with midband 5G connections by the end of this year. By the end of 2023, AT&T said it will increase that number to 200 million people. AT&T said it plans to start rolling out 80 MHz of midstream spectrum starting this year and will expand it to 120 MHz by the end of 2023.
AT&T spent a total of $36 billion in two recent FCC spectrum auctions to acquire its midband licenses. Midband spectrum is critical for 5G because it can support fast connections along large geographic coverage areas. Additionally, the amount of midband spectrum that operators deploy is also critical – more spectrum directly equates to faster speeds and additional network capacity.
AT&T said its capital investments would total $24 billion in 2022, of which $5 billion would be for 5G spectrum deployment. The company said it expects to spend roughly the same on capital investments in 2023.
But it’s now clear that AT&T lags its rivals in the midfield. For example, Verizon recently said it plans to cover 175 million people with around 60 MHz of median spectrum by the end of this year. By the end of 2023, it plans to expand that to 160 MHz of spectrum. By 2024, Verizon plans to cover 250 million people with midband 5G.
As for T-Mobile, the company already covers about 210 million people with 100 MHz of median spectrum and plans to increase those numbers to 300 million people and 200 MHz by 2023.
2. AT&T didn’t mention mmWave 5G.
AT&T officials didn’t once mention the high-bandwidth, millimeter-wave (mmWave) flavor of 5G during its event.
However, that’s not necessarily a surprise given that Apple recently released a new iPhone that doesn’t support mmWave 5G at all. Separately, T-Mobile recently updated its “layered cake” view of the 5G spectrum to remove the focus on mmWave.
In the US, Verizon remains the only carrier to forcibly deploy mmWave. The company ended 2021 with around 30,000 mmWave transmission sites and promised to increase that number in the months and years to come.
“We see millimeter waves as a differentiator,” Kyle Malady, CTO of Verizon, said at his company’s recent analyst day. He said about 30% of Verizon’s customer base has an mmWave-enabled device, and about 10% of the carrier’s network traffic now goes through mmWave in locations where it’s available.
3. AT&T remains indifferent to FWA.
Although AT&T now orders roughly the same amount of low-band and mid-band spectrum as Verizon, the company still has no plans to embark on a major deployment of fixed wireless access (FWA) technology.
“We’re not opposed to fixed wireless,” said AT&T CEO John Stankey. Indeed, AT&T has more than 500,000 fixed wireless customers, according to FierceWireless, of which about 130,000 are classified as business users.
“The curve is moving away from the scalability of wireless,” Stankey said, explaining that the impressive increase in home broadband data traffic indicates that fiber, not wireless, can meet demand.
“I’m betting on the longer term,” he said. “Nothing goes above fiber.”
This view contrasts with the strategies of Verizon and T-Mobile. Verizon expects to register a total of 4-5 million FWA customers by 2025; T-Mobile hopes to gain 7-8 million FWA customers over roughly the same period.
4. AT&T’s IoT business remains attractive.
AT&T was an early mover in the Internet of Things (IoT) space and the company continues to boast market traction. Rasesh Patel, EVP and Chief Product and Platform Officer at AT&T, put a value of $1.3 billion on the company’s IoT business, noting that it is growing 18% year-over-year . By the end of 2021, AT&T had 95 million IoT devices on its network.
AT&T’s IoT successes are most evident in the automotive sector. The company has 50 million cars in the United States on its network, which AT&T says accounts for 80% of the market.
And Patel said the auto industry was going through a “dramatic shift” towards electric and autonomous vehicles, which he said would lead to a 40-fold increase in vehicle connectivity consumption.
He said AT&T recently signed new long-term connectivity agreements with GM, Ford, Nissian and Tesla.
Additionally, he said AT&T hopes to replicate the approach it took in the automotive industry — which included hiring a dedicated sales force — in other industry verticals, by particularly manufacturing and health. He said the company would do this through technologies such as edge computing and private wireless networks.
— Mike Dano, Editorial Director, 5G and Mobile Strategies, Light Reading | @mikeddano