AT&T: FWA is a stopgap tool but fiber is the main focus

Like all U.S. companies, AT&T is facing inflationary pressures. However, AT&T COO Jeff McElfresh told investors at the Bank of America C-Suite TMT Conference today that the company has other options for addressing inflation beyond just raising prices.

Earlier this month AT&T hiked prices for certain fixed and wireless subscribers and CFO Pascal Desroches told investors at the Credit Suisse conference last week that more price increases may be on the way. However, McElfresh said that the company has some flexibility, and there are other options besides raising rates. For example, the company has been in the midst of a “transformation program” for the past year-and-a-half that has looked at ways to reduce costs. McElfresh said that the transformation program is starting to mature and is helping the company drive better operational efficiencies.

He also said that AT&T is looking closely at its distribution model and has reduced costs there by growing its business through online retail and direct fulfillment. This allows AT&T to be more flexible with its distribution costs. “We know what to do for inflationary pressures,” McElfesh said.

Fiber remains the focus

When asked where AT&T intends to increase its fixed wireless access (FWA) buildout in response to pressures from competitors T-Mobile and Verizon, McElfresh said that the company continues to see FWA as a stopgap measure that AT&T will use in areas where it doesn’t plan to deploy fiber. “Is fixed wireless a tool to be used for a particular segment that doesn’t have access to fiber?  Yes,” McElfresh said.” But it is not the majority of our growth agenda.”

However, he added that AT&T does plan to experiment more with FWA, and will deploy it in areas where it won’t have fiber because FWA performs better than DSL.

Earlier this year, Chris Sambar, AT&T Executive Vice President of Technology Operations, told Fierce that the carrier has over 500,000 fixed wireless subscribers. “We’re no stranger to fixed wireless,” he said.

McElfresh said today that the company is “on pace” for its fiber build and will likely cover 3.5 million to 4 million locations with fiber this year.

In addition, McElfresh said that AT&T’s fiber penetration rates are nearly twice what they have been historically, reaching 24% penetration compared to 12% penetration in the past.

AT&T also is building outside its footprint. McElfresh said about 10% of the company’s fiber deployment is outside its footprint in “edge-out” neighborhoods.