AT&T’s CEO Talks Integrated Communications, 5G, CAPEX Dependency on "Regulator"

Executive Summary:

Randall Stephenson,  AT&T chairman and chief executive officer (CEO) said that the company made a committment to have a full integrated suite of assets available.  That includes mobile, video, business communications and others.

“2019-2020 5G can “intercept the current LTE network” if AT&T has enough spectrum.  “Our target architecture is a wireless network, which may be a viable substitute for fixed broadband (wireline),” he added.  Stephenson spoke at the Goldman Sachs 25th Annual Communacopia Conference on September 21st.

Stephenson said the FCC Chairman position has tremendous power and the uncertainty of who will replace current FCC Chair Tom Wheeler will impact capital spending (more details below).

AT&Ts CEO made a lot of other interesting comments during his Q&A with the Goldman moderator.  You can listen to an audio replay of the webcast here (Registration Required).  T-Mobile USA also presented at this conference.

Separately, AT&T announced  that the company’s third-quarter 2016 financial results will be released after the New York Stock Exchange closes on Tuesday, October 25, 2016. AT&T will host a conference call to discuss the results that same day. The company’s earnings release, Investor Briefing and related materials will be available at AT&T Investor Relations.

AT&T CAPEX Dependent on Policies of Next FCC Chairman:

“As you start to make capital investment decisions over the next three or four years, it’s hard to make those decisions until you know who is sitting in that chair, as Chairman of the FCC,” Stephenson said. “That will determine how these services and these investments are regulated in the foreseeable future.”

Stephenson said that a recent court decision to defer any issues related to net neutrality to the FCC illustrates how much power the FCC chairman has in deciding how the overall telecom industry is regulated.

“Why is that so important?  It’s important, because what we have just demonstrated is the individual who is Chairman of the FCC kind of has somewhat ultimate rule making authority under this kind of purview.”

Stephenson added that the regulatory environment has created an environment where AT&T’s board of directors has to consider capital spending plans based on the FCC regulator’s policies.

“I have never been in a situation where my board was more active in discussing capital allocation by virtue of who is the regulator,” Stephenson said. “The regulator is very determinative in terms of how my board thinks about capital investment and capital allocation.”

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