AT&T cited a decision to replace Nokia equipment with Ericsson products as a key factor in lowering its profit forecast for 2024, though CEO John Stankey (pictured) argued the vendor move gave it more flexibility in managing capital spend going forward.
On an earnings call, AT&T CFO Pascal Desroches explained it would record $0.17 earnings per share depreciation for 2024, half of which is from a write-down of the Nokia equipment.
“We expect this impact to continue in 2026,” he said, adding the other half is incremental depreciation from the operator’s elevated 5G and fibre builds.
AT&T forecast adjusted profit of between $2.15 and $2.25 per share in 2024, which Reuters reported would fall short of analysts’ estimates of $2.46.
Stankey explained the move to Ericsson’s open RAN equipment will be one of the tools AT&T uses to manage its portfolio of capital investment between fixed and mobile services “to drive the kind of returns we need to”.
“We’re going to get more tools out of our open RAN investment to do that and still meet the needs of our capacity growth in a more efficient fashion on our wireless network moving forward.”
“That gives us the room to do some of the things that we want to do on the fixed side.”
Mobile rising
AT&T recorded net additions of 526,000 post-paid phone users in Q4 2023 compared with 656,000 in the comparable period of 2022.
Post-paid phone churn of 0.84 per cent was flat
For the full-year, AT&T added more than 1.7 million post-paid phone users, taking its total to 71.3 million.
Stankey noted AT&T had increased its post-paid phone base by more than 10 per cent over the past three years, its best run of gains in more than a decade.
Mobility revenue rose 4.1 per cent year-on-year to $22.4 billion in Q4 2023, driven in part by a 4.7 per cent increase in equipment revenue due to higher-priced phones.
The operator lost 132,000 prepaid customers with churn of almost 3 per cent.
Stankey said AT&T plans to improve its mobility performance by targeting underpenetrated segments including value-oriented customers and SMEs.
Revenue increased 2.2 per cent to $32 billion with net income of $2.6 billion compared with a $23.1 billion loss in Q4 2022.
The operator met a $6 billion run-rate cost savings target during 2023 and is working toward cutting an additional $2 billion by 2026.
The post AT&T tempers expectations after Nokia hit appeared first on Mobile World Live.
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