AT&T ‘repositions’ struggling commercial wireline division

July 21, 2022, 10:40 a.m. EDT

“We know this change will not happen overnight. “We are confident that we have the right strategy in place and our ability to successfully execute on our transformation in mobility and consumer wireless,” said John Stankey, the carrier’s CEO, during AT&T’s Q2 2022 earnings call.

CEO John Stankey (pictured) said AT&T is pushing its core fiber internet and 5G services as it begins to replace its declining commercial wireline segment amid a “highly stressful” economic backdrop.

The service provider’s CEO said during its Q2 2022 earnings call Thursday morning that “we expect some costs to be recovered and enterprise infrastructure solutions volumes and benefits to accommodate cost reductions over time.”

Business wire service revenue fell 7.4 percent in the second quarter. The carrier said the decline was due to a shift to mobility and collaboration solutions and lower revenue from the public sector, resulting in lower demand for legacy voice and data services. Business wireline sales fell 6.8 percent to $179 million in the second quarter of 2021, compared to $192 million in the second quarter of 2021.

The push in the wireline business will give AT&T an opportunity to retool its simplified product portfolio and deploy more fiber, a boost for the struggling segment, he said. “Our fiber expansion will also help us gain market share in SMB, an underserved segment for us,” he said.

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Business wireless services, on the one hand, rose 7.4 percent to $2.18 billion from $2.03 billion a year ago; The service provider explained that this is due to the development of 5G and fiber. Business wireless equipment revenue grew 11.9% to $874 million from $781 million in Q2 2021.

Overall, AT&T’s Business Solutions segment fell 2.4 percent to $8.64 billion in the second quarter, compared to $8.86 billion in the same period a year ago.

AT&T CFO Pascal Desroches said the company doesn’t expect business wireline revenue to grow in the short term, and the company is looking to stabilize 2024.

“We know this change will not happen overnight. We are confident that we have the right strategy in place and our ability to execute successfully as we move forward with the transformation of mobility and consumer wiring,” Stankey said.

The Dallas-based carrier’s mobility division revenue for the quarter was $19.93 billion, up 5.2 percent from $18.94 billion in the same quarter a year ago. Total communications business, which includes high-speed Internet, video and legacy voice services, rose 2 percent to $28.70 billion in the quarter, compared to $28.13 billion in the second quarter of 2022. Revenue and subscriber growth to higher services and devices. Equipment revenue grew 7.2 percent year over year.

Stankey said the carrier added nearly 2 million AT&T Fiber locations this year, hitting its target to cover 70 million people with mid-band 5G spectrum two quarters early. AT&T now It is expected to reach close to 100 million marks by the end of 2022. AT&T’s goal is to convert more broadband Internet subscribers to fiber subscribers. AT&T Fiber, Stankey said, will have a “multi-decade lifespan.”

On the wireless side, AT&T broke records for the second consecutive quarter with 813,000 postpaid phone network additions and 1,058,058,000 postpaid network additions in the second quarter. Desroch said the results represent AT&T’s best second quarter for postpaid phone network additions in more than a decade.

Diluted earnings per share for AT&T’s fiscal second quarter ended June 30, 2022 were 56 cents, up from 22 cents a year earlier. Total revenue was $29.64 billion, down 17.1 percent from $35.74 billion in the same quarter a year ago, driven by the impact of the carrier’s divested businesses and lower business line revenue. Net income for the quarter was $4.54 billion, compared with $1.87 billion a year ago.