AT&T adds 691,000 postpaid phone subs in Q1 2022

AT&T today reported 691,000 postpaid phone net adds during its first quarter 2022, topping most analyst’s expectations. Its postpaid phone churn was a low 0.79%.

John Stankey, AT&T CEO, said, “We had our best first quarter for postpaid phone net adds in more than a decade.”

The company said total postpaid phone net adds excludes impacts of AT&T’s 3G network shutdown of more than 400,000 postpaid phones.

AT&T CFO Pascal Desroches said, “Consistent with industry practice, we have treated this reduction as an adjustment of our base at the beginning of the period.”

Asked if the postpaid phone net adds included any additions from the 3G shutdown, Stankey elaborated, “The short answer is no. When we count net adds, a migration of the 3G customer to another service plan isn't a net add, that's just the migration. I would actually say, this is probably one of the best air interface transitions I've ever seen.”

Desroches added, “Just as a reference point, 300,000 of the net adds this quarter were from FirstNet. Again, nothing to do with the 3G migrations.”

The company also reported 113,000 prepaid phone net adds, during the quarter.

Revenues in its mobile division were up 5.5% year-over-year.

During the past year, AT&T divested its DirecTV interest and spun off its Warner Media division. Taking those divestitures into account and other one-time expenses, the standalone AT&T’s earnings rose from 58 cents in Q1 2021 to 63 cents in Q1 2022. The company's stock rose about 3.5% after its earnings report today.

Stankey and Desroches continued to stress the company’s main talking point, which it first laid out in its investor meeting in mid-March: that the now slimmed-down AT&T is keenly focused on its core connectivity offerings of 5G and fiber.

The company is also working on reducing its debt. In late 2021 it had roughly $160 billion in debt. “With the completion of the WarnerMedia-Discovery transaction, we've monetized more than $50 billion of assets since the beginning of 2021. And with this transaction, we reduced our net debt by approximately $40 billion in April,” said Stankey on today's earnings call.

Despite the uptick in postpaid phone net adds, profit in the company’s Mobility sector declined 1.8% year-over-year. “EBITDA was negatively impacted by over $300 million due to 3G shutdown costs and the absence of FirstNet and CAF II reimbursement,” said Desroches.

AT&T is focusing on incentivizing its customers to shift to its high-tier unlimited plans.

Desroches said, “Our fastest growing plan is our Unlimited Elite, which is our top-tier plan. So that tells you the quality of what's happening in the overall wireless base.”


Asked about its C-band rollout, Stankey said AT&T is gearing up for that right now. It wants to have all the necessary equipment before it starts climbing towers later this year.

“Obviously, there are things that we can deploy today to get ourselves ready, make sure that we're in the right position. And we can start spending on and be in a position to scale that, turn up pretty rapidly as we hit midyear,” he said. 

Fixed wireless

AT&T has not embraced fixed wireless access (FWA) in the same way as T-Mobile and Verizon, which are tapping unused capacity on their mobile networks to offer the fixed broadband service.

Stankey pointed out that AT&T has “hundreds of thousands of fixed wireless subscribers already.” He said the carrier has used it pretty aggressively in parts of the business segment, and he thinks it’s a good solution in some rural areas.

But AT&T doesn’t currently have plans to follow its competitors and offer FWA across the country, tapping its mobile network.

“It's going to be what I would call ‘use specific,’” said Stankey. “I don't intend to go into dense urban and metropolitan areas where I can build fiber infrastructure and offer broadband and try to use fixed wireless as the solution to serve broadband customers.”

He said broadband traffic is estimated to grow 5x over the next five years, and he doesn’t think FWA is the best technology to deal with that.

“But there are clearly places in more rural areas where fixed wireless will be the best way to get the most amount of bandwidth out to a customer. And we believe we can play in those spaces, and there'll be some former ADSL locations where fixed wireless will be a substantial step-up in opportunity,” he said.