AT&T’s FirstNet build 75% complete; CFO says ‘money well spent’

As AT&T this week announced momentum for its FirstNet dedicated public safety platform, passing the 1 million connections mark, the carrier’s finance chief touted multiple benefits of the network build.

AT&T CFO John Stephens, speaking Tuesday at the Wells Fargo 2019 TMT investor conference, called the FirstNet buildout “really, really successful” and at 75% complete, well ahead of schedule.

AT&T was targeting 70% completion by the end of the year, but at this point Stephens estimated the team is about six to nine months past the goal marker.   

Earlier this year AT&T came under fire from activist investor Elliot Management, and last month outlined a three-year plan that includes revenue growth of 1-2%. Service mobility revenues will play a key component, as well as equipment sales, Stephens reiterated.  

“When you have the FirstNet effect on our network – it’s now recognized as the fastest, that we’re the best in quality, the ability to expand product, services, client and customer base, that service revenue is critical,” he said.    

During tower climbs for the FirstNet buildout, AT&T is adding three different bands of spectrum to its sites at the same time, AWS-3, WCS and the dedicated FirstNet Band 14 spectrum. AT&T is also installing 5G-enabled equipment at many of the sites that will be turned on next year.

Stephens said AT&T is making those investments today, but pointed to the added speed and efficiency from the one-climb FirstNet strategy on the carrier’s planned 5G network roll out.

“If you're going to climb that tower, I'll pay for it and we'll spend more money than we normally would, because it can be done so efficiently,” he said. “And you can do things quicker because you only have to touch a tower once.”

AT&T has pledged to roll out low-band 5G using 850 MHz spectrum by year’s end, and Stephens reiterated its commitment for nationwide 5G covering more than 200 million people by mid-2020.

“We couldn't do that unless it was a [5G] software upgrade for so many of the towers,” said Stephens. “It has a real impact and real savings. It's costing us some more money ahead of time, but I believe money well spent.”

FirstNet’s new disaster response blimp

Hitting its 1 million milestone, AT&T said more than 10,000 public safety agencies have subscribed to the FirstNet platform.

In conjunction with the announcement, AT&T also launched its FirstNet’s 76th deployable network asset – a 55-foot blimp called the FirstNet One.

FirstNet’s disaster response mobile fleet already includes Flying COWs (Cell on Wings), as well as ground-based assets like Cell on Wheels (COWs) and Satellite Cell on Light Trucks (SatCOLTS) that can be deployed on the scene within 14 hours following the initial emergency request.

“Like our Flying COWs, when deployed FirstNet One provides LTE coverage across the targeted area during times of disasters,” wrote Chris Sambar, EVP of AT&T Technology Operations in a Tuesday blog. “FirstNet One is portable and can fly up to 1,000 feet for approximately 2 weeks before needing additional helium top-off, which means it has advantages in altitude and duration. It can also reduce the need for other traditional temporary ground-based assets, such as SatCOLTs.”

The blimp is meant to help first responders during large-scale catastrophic events, and is fully operational in wind speeds up to 50 mph, and can withstand wind speeds up to 70 mph, according to AT&T. The FirstNet One blimp can also be tethered to a trailer to provider satellite or wireline backhaul.

Tests on the deployable assets were recently conducted in Tuskegee, Alabama, establishing things like coverage area, airworthiness, and performance of the power and data transmission lines connecting to the FirstNet network core.

With the FirstNet build, Stephens at the investor conference said that in addition to faster speeds and better network quality overall, AT&T is getting “tremendously increased capacity.”

“It’s opening doors, not only for additional FirstNet customers, but reseller arrangements and so forth,” he said.

In connection with the FirstNet build and 5G upgrades, AT&T is deploying about 150-170 MHz of low and mid-band spectrum. Stephens noted AT&T likely has about 50% more mid and low-band spectrum than its closest competitor, which is Verizon, and that 75% of it is built out “in a very deep environment.”

In the U.S., there’s been a lack of mid-band spectrum availability, including delays on the C-Band, with an auction timeline still uncertain. While acknowledging that mid-band spectrum is needed and important, Stephens said AT&T’s historic ownership of spectrum puts the carrier in a different position than the rest of the marketplace.

“The investments we've made over the last five years and quite frankly, because the FirstNet contract allows us to put it in service in a really efficient way that will pay us dividends for years and years to come,” said Stephens. “Others will try to catch up, I'm sure and I understand that, and respectfully. But those things are tough to do. It's expensive to do. It takes time. You have to have spectrum.”