AT&T Expects Annual Capital Investment To Be In $22 Bln Range

AT&T Inc.'s (T) chief financial officer Pascal Desroches said that the company has good momentum as the company continues to successfully execute in its market focus areas of 5G, fiber and HBO Max. The company continues to invest in its network and the creation of compelling content. For full-year 2021, AT&T expects gross capital investment to be in the $22 billion range, capital expenditures in the $17 billion range and cash content spend of approximately $19 billion.

In wireless, Desroches said he expects strong demand for mobile services and AT&T's consistent go-to-market strategy will enable the company to sustain profitable postpaid subscriber growth in the second half of 2021.

Following completion of the WarnerMedia/Discovery transaction, AT&T expects to significantly reduce debt and to increase investment in 5G and fiber.

At the Oppenheimer Technology, Internet & Communications Conference, Desroches reiterated the benefits of AT&T's wireless network strength and performance. AT&T currently covers 250 million people in the U.S. with 5G using sub-6 MHz spectrum across nearly 500 markets. The company plans to begin C-Band deployment by the end of 2021 and expects to cover approximately 200M POPs with C-Band by the end of 2023.

In discussing the company's expectations for the second half of 2021, Desroches noted that in most cases AT&T has long-term supply agreements that provide for priority access and committed pricing for materials and equipment. He also noted, AT&T is now seeing some disruption in its supply chain, including for fiber and related components.

Desroches indicated that the company is seeing a slower-than-anticipated ramp within its fiber ecosystem and the fiber locations buildout for 2021 is now expected to be in the 2.5 million range. Management does not expect any impact to its financial guidance as a result of this shift.

AT&T also continues to experience healthy demand for HBO Max in both domestic and international markets and therefore reiterated its recently raised global HBO Max and HBO 2021 subscriber guidance of 70 million to 73 million.

During the third quarter, HBO will cease to be offered as a subscription on Amazon Channels. This was a strategic decision made by WarnerMedia. It is anticipated that there will be an impact on HBO Max / HBO domestic subscribers in the third quarter.

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