AT&T CEO: More fiber is the company's top-priority

When it came to naming the company's top-priorities, AT&T CEO John Stankey said adding more fiber topped the list. Speaking Tuesday at the annual Goldman Sachs Communacopia conference, Stankey said AT&T's second key priority was making sure that it has broadband connectivity on 5G, which means even more fiber.

Stankey said anything AT&T could do to put more fiber out into the network was a top priority because fiber fuels both the consumer and business segments.

"When you have a great 5G network, you're deploying a lot of fiber, and that's something that we think are married well," Stankey said, according to a transcript. "And we think we're in a very unique position because the fiber that we deploy not only powers our wireless business, but it helps our consumer business and fixed broadband. It helps our enterprise customers and how we deal with them as well, and so we strategically want to make sure we're doing that."

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According to Vertical Systems Group, AT&T had the most on-net fiber lit buildings in the U.S. in April. In its second quarter earnings report, AT&T had 4.3 million AT&T Fiber customers with nearly two million of them on 1-gigabit speeds. At the start of the year, AT&T had more than 1.3 million fiber route miles globally. All of which isn't enough.

When asked if there was a business case for adding more fiber, Stankey answered in the affirmative. Stankey said AT&T's confidence level for deploying more fiber is even higher now due to increased traffic on its network related to Covid-18.

"There is clearly an easy path for us to think about a substantially larger fiber footprint than what we have today with returns that are as good as the great returns we've gotten from the first tranche that we've built," Stankey said.

Covid's impact

Due to its virtualization efforts and fiber builds, AT&T was in good shape to weather the fallout from Covid-19. When it came time to send employees home to work, AT&T had the tools to make the transition easier.

"I think the new normal for AT&T probably isn't dramatically different than the new normal for everybody else," he said. "I would tell you if I went and looked at some of the trends that were going on in key parts of our business, Covid was kind of a shot of adrenaline.

"It just accelerated things that were happening and carried them forward. If you don't have a robust digital capability, omnichannel capability and are able to bridge that across your various distribution channels, it's a tough environment to work in."

Stankey said that Covid-19 did shine a light on other opportunities for AT&T, including shifting its distribution and how it thinks about serving customers. Stankey said AT&T knew that robust scale and connectivity were important, but there's an opportunity to distribute its connectivity beyond urban areas.

"We have an opportunity to think about more varied forms of access that are more flexible, and that plays right into our strength," he said. "We're looking at redoubling our efforts on those product development opportunities that allow for true flexibility of bandwidth as somebody moves through a city center out to suburban areas.

"Our play in 5G and a more dense fiber network all play really well into those things. So I think from the product side, we are in the right place. It's just a matter now of accelerating some of those trends we had in place."

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During Covid-19, Stankey said AT&T gained more flexibility with its call center employees and its service techs as more call center employees worked from home and service techs were dispatched from their homes. Covid-19 made AT&T become more flexible, and Stankey said some of the Covid-19 lessons learned would stay with the telco going forward, but "it's a balance of using all the tools to be effective moving forward."

"I think we're going to change how we operate around here," he said. "I don't believe we are an entirely virtual company. There's no question that we have large parts of our business that can be far more virtual than they were before, and we're moving down that path to do that.

"We're building the infrastructure and the tools around it, and frankly, more importantly, some of the softer sides of how do we lead and manage people in those environments, and starting to build resources to help people work through that."