Dive Brief:
- AT&T CFO Pascal Desroches, speaking at a conference Wednesday in the wake of recent price hikes, said that the company has continued to see solid demand with “low postpaid phone churn,” according to a company release. Churn rates are a measure of how many customers discontinue their wireless service and switch to a different provider.
- Desroches signaled that the impacts of “recent pricing action on churn are within AT&T’s expected range and the company continues to expect that the pricing changes will be accretive in the back half of the year,” according to company details on his remarks at the Bank of America, Media Communications and Entertainment Conference.
- Despite “reduced visibility” into economic trends going into next year due to the current macroeconomic environment, Desroches expects improved cash conversions in 2023.
Dive Insight:
AT&T has raised prices on older mobile-service plans as part of a strategy to boost revenue and offset the impacts of inflation, according to a May 3 Bloomberg report.
Along with a low churn rate, Desroches cited the company having a continued amount of healthy postpaid phone volumes. Cash collections cycles have also been on par with expectations and comparable to normal pre-pandemic rates, said Desroches.
In his talk, the finance chief asserted that the company will continue to take a return-focused approach to growth and investment as the company adds customers in their focus areas of 5G and fiber, expands its fiber footprint and sees consistent cash collection cycles, according to the press release.
The finance chief also noted plans to further expand the company’s fiber network, which the company recently announced had expanded into Arizona as of Aug. 30.
Looking forward, Desroches said that he expects improved cash conversions in 2023 from 2022 and cited better service revenue levels exiting 2023, lower interest costs and the benefits from continued transformation savings.
The company also recently filed a lawsuit against competitor T-Mobile on Sept. 6 over its senior discounts ad campaign. In the campaign, T-Mobile claims that “92% of seniors in the U.S. can’t get a wireless discount from Verizon or AT&T because they don’t live in Florida.” AT&T said in their complaint that it offers discounted services in all 50 states in the U.S. through its partnership with AARP, per reporting from Fierce Wireless.
In the suit, AT&T is requesting a jury trial as well as the discontinuation of T-Mobile’s advertising campaign. The Dallas-based company also wants T-Mobile to pay compensatory damages, attorneys fees and give up any profits it made from this campaign.
