AT&T at Bank of America Conference: Strategic Growth Insights

On Thursday, 04 September 2025, AT&T (NYSE:T) participated in the Bank of America 2025 Media, Communications & Entertainment Conference. The company outlined its strategic initiatives, focusing on the recent acquisition of EchoStar spectrum, aimed at boosting revenue and EBITDA growth. While the acquisition promises long-term benefits, it also poses challenges with immediate financial impacts.

Key Takeaways

• AT&T’s acquisition of EchoStar spectrum is expected to enhance revenue and EBITDA growth.
• Capital expenditure remains stable at 23 to 24 billion dollars annually despite new investments.
• Fiber expansion and fixed wireless access (FWA) are central to AT&T’s growth strategy.
• The company anticipates a less capital-intensive model with improved cash flow in the future.
• AT&T maintains a unique position as the only scaled wireless and fiber network provider.

Financial Results

AT&T expects no impact on its 2025 guidance but anticipates a partial impact in 2026 due to the EchoStar transaction. The deal is expected to be accretive to earnings per share (EPS) and free cash flow after 24 months, despite some initial dilution.

• 2025 guidance remains unchanged, with revenue and EBITDA growth expected post-transaction.
• Wireless service revenue growth for 2024 is revised to over 3% from the initial 2.5-3% guidance.
• EBITDA growth for 2024 is projected to be closer to 3%, down from an initial high-end estimate of 3-4%.
• Capital expenditure continues at 23 to 24 billion dollars annually, accommodating the new spectrum deployment.

Operational Updates

AT&T’s operational focus includes spectrum acquisition, fiber expansion, and network modernization.

• The EchoStar spectrum includes mid-band and low-band, facilitating fixed wireless subscriber expansion.
• Fiber deployment targets over 60 million locations, with costs managed efficiently.
• Fixed wireless access (FWA) is expanding due to network upgrades and spectrum deployment.
• The wireless modernization program is set to complete by 2027, enhancing network architecture.

Future Outlook

AT&T’s strategic direction involves transitioning to a less capital-intensive model with better cash flow and operating leverage.

• Long-term growth is expected from MacroStar revenues, FWA rollout, and legacy copper decommissioning.
• By the end of the decade, AT&T aims to complete its fiber buildout and wireless modernization.
• The company expects to maintain its unique position with a scaled wireless and fiber network.

Q&A Highlights

During the Q&A session, AT&T’s CFO Pascal addressed various strategic and operational queries.

• The company is satisfied with the EchoStar spectrum acquisition but open to swaps for better shareholder returns.
• AT&T’s strategy includes migrating subscribers to premium plans and managing competitive pressures.
• Regulatory concerns regarding the EchoStar deal were not speculated upon.

For a detailed understanding, readers are encouraged to refer to the full transcript below.

Full transcript - Bank of America 2025 Media, Communications & Entertainment Conference:

Mike Funk, Head of Telecommunications, Comm Infrastructure, and Comm Software Research, Bank of America: Of the Bank of America Media and Telecommunications Conference. Once again, Mike Funk. I head up the telecommunications, comm infrastructure, and comm software research at the bank. Really very happy to have AT and T and Pascal, CFO, here us this morning to kick off day two. So Pascal, thank you for being here.

I did want to point out first and should be up on the screen, I think we had a safe harbor agreement for you all to look at here, pretty standard, but just wanted to make sure we covered that first before getting into the Q and A. Pascal, thank you again for coming.

Pascal, CFO, AT&T: Hey, my pleasure. Looking forward to our

Mike Funk, Head of Telecommunications, Comm Infrastructure, and Comm Software Research, Bank of America: discussion. Absolutely. Wanted to start maybe with current events. So last week, you last Tuesday, you announced agreement to acquire EchoStar Spectrum, both the 600 and then the mid band spectrum. You know, you did a call after the announcement.

But maybe go back and just give us a little bit of the history to, you know, the lead up to the agreement to acquire that spectrum, and then from your seat in the CFO office, you know, the framework that you put around the acquisition and the approach to valuation.

Pascal, CFO, AT&T: Sure thing. Look, if you would ask me at the start of the year, would we have been making a significant spectrum purchase? I probably would say probably not, because the next major auction isn’t until likely 2027. And But, you know, as fate would have it, you had a set of events that really unfolded over the last, say, two to three months that really presented a unique opportunity for AT and T and its shareholders. In particular, I think there were the FCC indicated that they really wanted to have EchoStar deploy some of its spectrum to benefit consumers.

And that presented us with an opportunity. And with that, we had an outreach from EchoStar to see whether or not there was interest in any of their spectrum holdings. Clearly, the mid band spectrum was something we thought was fit nicely and was adjacent to our current holding nationwide holdings, over 400 markets. And we thought that was a no brainer because it was gonna allow us to deploy with virtually no cost. Mhmm.

Also, we were surprised when they showed a willingness to sell the low band spectrum. You don’t get that opportunity very often. And when we looked at those two bands of spectrum and we said, look, this is something we can deliver a really attractive return on to our shareholders. The way I think about it, when you look at any of those acquisitions first you say, okay, how much capital is currently in your plan that these acquisitions will allow you to defray? And that was fairly meaningful.

Even after factoring in the cost to deploy that, the low band spectrum in this instance because the mid band doesn’t really have much incremental cost associated with it. So that’s the first place you start. Second, you say, okay, does this give me an opportunity to expand the population that I have for driving fixed wireless subscribers? And it does. It expanded a number of locations we can offer fixed wireless services.

Within our footprint, we think that’s incredibly important because it allows us to, instances where we haven’t gotten to fiber but we plan to, it allows us to accelerate our legacy decommissioning which, as a reminder, we said at the end of last year, we’re currently carrying about $6,000,000,000 of costs associated with our legacy copper network. So it allows us to be able to accelerate some of that decommissioning. It also, outside of our footprint, allows us to offer a broadband and wireless product, you know, converged bundle. And we think that’s an incredibly exciting opportunity, in particular, know, when you think about the value segment to be able to really target the value segment using both a broadband and a wireless product at an attractive price point. We think it’s something that we will, that the opportunity is fairly attractive.

Additionally, whenever you have fixed wireless, you will have opportunities to converge both in and outside your footprint. Finally, look over time. This also allows us to expand our relationship with DISH. DISH will now expand its existing MVNO agreement with us. As a reminder, when we initially We signed a deal with them in 2021 that had a term of ten years, a minimum of $5,000,000,000.

This allows us to expand upon that. So there are various ways we are getting returns on this. And I think, you know, when I take a step back, this was a unique opportunity that allowed us to accelerate many of the things that we were trying to accomplish. And it does so in a way that it helps us accelerate our revenue and EBITDA growth over relative to what we had previously expected. And I think the outcome for AT and T shareholders is a great thing here.

Mike Funk, Head of Telecommunications, Comm Infrastructure, and Comm Software Research, Bank of America: It’s great overview. Thank you, Pascal, that. And I think you touched on it, but the cost to deploy the 600, I think last week you said that the cost of deploying the spectrum will fit within your capital spending plan envelope that you’ve already provided to us, right? But that’s also net of less densification and maybe some other factors as well. Can you discuss the cost broadly on a gross basis to deploy?

I think there’s some debate about how much it’s going to cost to deploy the 600?

Pascal, CFO, AT&T: Yeah. Just as a reminder, in the second quarter with the passage of the One Big Beautiful Bill, we announced that we plan to spend more capital. Our previous guidance was that we were gonna spend $2,022,000,000,000, around 22,000,000,000 annually. Now with the one big beautiful bill we increased that to between 23 and 24,000,000,000. And that was principally because of incremental fiber locations.

We believe we can manage within that 23 to $24,000,000,000 of annual capital spend and still roll out the spectrum that we we acquired, the 600. We haven’t said specifically how much, But there is, on the one hand, we’re gonna save money as a result of not having to densify because of the spectrum The mid band spectrum acquisition and the low band spectrum acquisition. But going against that is the deployment cost and we think we could manage within the $23,000,000,000 $24,000,000,000 portfolio of spend.

Mike Funk, Head of Telecommunications, Comm Infrastructure, and Comm Software Research, Bank of America: And one more question on this, we’ll move on to more, you know, looking forward or operating. You could avoid that capital spending simply through a spectrum swap, another carrier that has 700 we’ve already deployed, and they’ve already deployed the 600. Is there a reason or logic behind why that type of swap wouldn’t make sense to AT and T?

Pascal, CFO, AT&T: Look, we’re really happy with the position that we’re in with this acquisition. As people who are responsible for generating value to our shareholders, if there are opportunities that somebody believes that they can unleash more value to us, we’d consider it. But it would only come if we believed it was going to generate more returns to our shareholders.

Mike Funk, Head of Telecommunications, Comm Infrastructure, and Comm Software Research, Bank of America: Great. Thank you. I want to skip over to talking about the wireless market in general. So, you know, back entering 2025, I think there was a pretty broad consensus that we were in a sweet spot for wireless where carriers were able to take price and you had relative stability on a competitive basis and churn rates were stable and relatively low. And then we came into the year and the promotional activity may be higher than people expected and churn rates ticked up, maybe more negative reaction to some price increases that some carriers took.

So the concern was elevated going through 2Q about competitive activity, churn rates, and SAC. And I think at 2Q, if I’m going to paraphrase for you, but you said, look, we expect a similar environment in the second half of the year, right, implying flattish churn rates going through through the second half. So, you know, now that we’re basically, you know, two thirds is the way of the way through 3Q, In my opinion, it seems like maybe there’s been more rifle shot or targeted competitive activity relative to 2Q. Maybe it’s slackened a little bit. Can you comment on what you’re seeing during the quarter and your previous comments about churn rate and that remaining consistent?

Pascal, CFO, AT&T: Yeah. Just to level set. Coming into the year, we expected there to be less industry growth than there was last year. And we saw the same phenomenon, you know, twenty three to twenty four there was less industry growth. And we expect our planning assumption coming into the year was that there was going to be less growth.

In part because of the headwinds associated with immigration. We started to see those probably in the middle of last year when the Biden administration began to tighten the border and we expected that to continue, if not accelerate, with the new administration. And that has in fact played out as we anticipated. Also for us, we were coming to the end of our device promotional cycle for many contracts. And so we expected as a result, there would probably be some level of elevated churn associated with that.

In addition to those two factors, which we cited at the very beginning of the year, I think Doge’s had an impact on the activity in the first half of the year. You know, so you have seen headwinds in the public sector. And on top of that, I think there was some elevated activity in the first half of the year associated with the tariffs. The concern around tariffs and consumers trying to get out ahead of that. All those factors played out in the first half.

And look, I take a step back. In the first half of the year, we performed really well, and we’re really pleased with how that went. Now, with all those factors at play in the second quarter, when we reported second quarter results, we said, look, our planning assumption for the back half of the year was that things were gonna The environment was gonna continue in the same, being impacted by the same factors that we saw in the first half of the year. And we’re two months into the third quarter. We haven’t hit the peak of the holiday season, which typically starts mid September and goes through the end of the year.

But so far, I’m really pleased with how we’re doing. And the business is performing well. We’re executing well. And things are playing out as we anticipated.

Mike Funk, Head of Telecommunications, Comm Infrastructure, and Comm Software Research, Bank of America: No, that’s outstanding. You touched on it for a moment, but Doge, do we feel that that impact is behind us? Or could there be more to come, do you think, from Doge? And then link in the immigration question, too. Some have suggested that impact of immigration plus just fewer second line additions than we saw kind of during even post COVID could shave $3,000,000 off of net adds in 2026.

I’m not asking you give 2026 guidance, but does that rough math, at least the scale of it, does that make sense to you? So the Doge and then I trending in net

Pascal, CFO, AT&T: would say, relative to what we had said previously, Doge is playing out as we saw in the first half of the year, and notwithstanding that, we’re performing very well. I’m not going to speculate on what the future holds in that regard. And then similarly with immigration, you know, we’re really happy with how we’re performing even though immigration is not the tailwind that it has been the last several years. Okay. I wanted to maybe skip over

Mike Funk, Head of Telecommunications, Comm Infrastructure, and Comm Software Research, Bank of America: a more higher level strategic if that’s okay. Sure. Okay with you. You’ve made significant investments in the last year and highlight a lot of opportunity whether it’s in speculative investment or expanding the fiber footprint. So how have your financial priorities changed or shifted over that same period of time?

Pascal, CFO, AT&T: Look, they really haven’t. If you think back to what we have said the last several years is our priorities are investing in our business for growth. Most of that investment has come through organic investments that we’ve made in both spectrum and fiber build. But we saw an opportunity with both the Lumen transaction and now with the EchoStar transaction to add to those investments and to accelerate that. You know, this is about accelerating revenue and EBITDA growth.

And we think these assets allow us to do that. And then on top of that, because of the great work we’ve done on the balance sheet the last several years, we can do all this and still return pretty significant value to shareholders in the form of dividends and buybacks. And you know, one of the reasons why we spent so much time getting to the two and a half times range was because we felt that that was the level that gave us an opportunity to continue to invest for the growth we believe is available in the industry. And at the same time, take advantage of opportunities that come to market like the EchoStar spectrum. And we’re able to do that without disturbing the return that we’ve committed to shareholders.

So, we feel really good about where we’re at, and I think AT and T and its shareholders have a lot to be proud of and excited about.

Mike Funk, Head of Telecommunications, Comm Infrastructure, and Comm Software Research, Bank of America: Great, and thank you for that. And your updated guidance at 2Q ’twenty five results, obviously, the announcement you made last week. So, can you update us on how the EchoStar transaction impacts your thinking on short and long term guidance?

Pascal, CFO, AT&T: Sure thing. First, for 2025, we don’t anticipate any impact on our guidance. And we reiterated when we announced the transaction our 2025 guidance. Similarly, when you think about our the long term guidance we provided, here’s what we’ve said. We expect the EchoStar transaction to close around the middle of next year.

So for 2026, there will only be a partial year impact. We would anticipate having higher revenues as a result of whether it be fixed wireless, incremental MVNO revenues, wireless attachments. So higher revenues, higher EBITDA. But those will be more than offset by the higher interest costs associated with the incremental debt that comes with the transaction. But all of this we think is manageable within the long term guidance we provided.

Upon the close of the EchoStar transaction, we’re gonna update our long term guidance. And I would anticipate there relative to what we’ve previously said that there would be I would expect incremental revenues and EBITDA within twenty four months. We don’t We expect the transaction overall to be accretive to EPS. In the short term, there will be dilution, but manageable dilution.

Mike Funk, Head of Telecommunications, Comm Infrastructure, and Comm Software Research, Bank of America: Okay. And just touching

Pascal, CFO, AT&T: EPS and free cash flow.

Mike Funk, Head of Telecommunications, Comm Infrastructure, and Comm Software Research, Bank of America: Accretion EPS and free cash flow?

Pascal, CFO, AT&T: Yes. After twenty four months. In the first twenty four months, there will be some dilution to EPS and free cash flow, but then accretion to revenues and EBITDA.

Mike Funk, Head of Telecommunications, Comm Infrastructure, and Comm Software Research, Bank of America: And I want to make sure I have the building blocks to that correct. So I guess, number one, be contemplating more revenue from MacroStar being the preferred provider on the MVNO side, right? That’s number one. That’s one. Second, you are rolling FWA more aggressively, so higher FWA revenue, right?

That’s two. Faster decommissioning of the legacy copper plants, that’d be cost savings, additive to EPS and free cash flow. And then, I guess, also less densification would be part of that as well? Are those the four key pillars?

Pascal, CFO, AT&T: Less densification. You missed a really important one. Oh, I’m sorry. Which one

Mike Funk, Head of Telecommunications, Comm Infrastructure, and Comm Software Research, Bank of America: did I miss? The wireless attach. Oh, the wireless attach, right.

Pascal, CFO, AT&T: Yes. It comes with fixed wireless. Okay. And so being able to offer a fixed wireless product nationwide allows us to perform better, in particular outside of our footprint where Mhmm. We’re not performing where we We’re not performing at the same level that we’re performing within our footprint.

So this presents us a great opportunity, and I’m really excited about it. And I

Mike Funk, Head of Telecommunications, Comm Infrastructure, and Comm Software Research, Bank of America: guess the counterbalance, that’s gonna just be the cost of the deal, right? 23,000,000,000, put whatever, you know. Yeah. 500 basis points cost to that. Whatever the number is, you know, you’re over a billion dollars and just for funding the deal.

Pascal, CFO, AT&T: Yeah. You’re over a billion dollars in interest cost. Mhmm. One factor as you think about your modeling to keep in mind is that as we are deploying the 600, some of the interest associated with that gets capitalized. Yep.

So you’re not gonna see an impact on our reported Mhmm. Free cash flow or EPS. With that said, it is with It is included in our overall deleveraging targets because it’s real cash. And we expect even with our continuation of our capital return program to be able to deliver, to get back to our target range within thirty six months. Okay.

I’m gonna follow-up

Mike Funk, Head of Telecommunications, Comm Infrastructure, and Comm Software Research, Bank of America: with Brett later on the capitalized interest for my modeling purposes. I don’t wanna go in the rabbit hole right now with that one. I wanna come back to seasonality because there were a couple things that you mentioned. You mentioned, you know, greater upgrade rates around April, I think, around some tariff fears, which you’ve heard pretty broadly, right? That makes sense, human behavior.

But then you also mentioned the expected uptick in, you know, competitive seasonal activity as we head through September into the back half of the year. So should I expect that seasonality is going to be less because maybe some pull forward we saw? And then how does the seasonality in general affect your thinking around you know, the churn rates that we saw in the beginning of the year continuing through or even being higher in the back half of the year?

Pascal, CFO, AT&T: Yeah. Look, we all know there is always some level of uptick in activity in the latter part of the year. That’s in conjunction with the introduction of new devices. Ultimately, whether or not we see that, I think it will depend upon the device cycle and will be determined by the consumers. Mhmm.

For planning purposes, we’re assuming that we’re gonna see more of the same, but we don’t know until we start to really get into it. We’re not gonna know for sure. That’s our planning assumption. The outlook that we gave and reiterated is based upon that planning assumption. And But for now, it’s too early

Mike Funk, Head of Telecommunications, Comm Infrastructure, and Comm Software Research, Bank of America: to tell. Okay. Just for your consensus gathering, I think we’re forecasting 1% increase in iPhone sales year over year. So B of A is not expecting a big upgrade cycle this year. Whatever happens,

Pascal, CFO, AT&T: we will be ready. Okay, outstanding.

Mike Funk, Head of Telecommunications, Comm Infrastructure, and Comm Software Research, Bank of America: You made several changes to guidance during 2Q around the mobility business. What’s driving those guidance changes for mobility?

Pascal, CFO, AT&T: Just to level set. Yeah, please. Coming into the year, we expected wireless service revenue to grow between 2.53%. And we expected EBITDA to grow between 34%. And we had guided to the higher end of the three to 4% range.

And in the second quarter, what we said is we expected because of the elevated growth that we saw in the first half and our planning assumptions around the fact that we expected that activity to continue to back quarter the year, that we were probably closer to around 3% for EBITDA. But because of our success in executing in the first half of the year, we expected our revenue, our wireless service revenue growth to be more than 3%. So we feel, know, bottom line is we are investing for growth, and we saw high quality subscribers come in in the first half of the year. That requires some investments. But long term, the return is really attractive on that.

And that was the foundation of what the tweaks we made to our guidance in the second quarter. Another important factor to note is, as we are spending to acquire new subscribers, oftentimes those subscribers come not only with mobility services, but with either fiber or fixed wireless. Most of the customer acquisition cost is coming from, being burdened in the mobility segment, but the benefits are showing up in our consumer wireline segment. So all in all, I feel really good about how we’re performing and the quality of the subscribers we are attracting. That’s a

Mike Funk, Head of Telecommunications, Comm Infrastructure, and Comm Software Research, Bank of America: great great segue into the next question. You touched on a bit, you know, high quality subscribers with something that you just mentioned. And I think when spoke with you all a few months ago, something stuck with me was the thought of improving execution on migrating subscribers up during their life cycle. And we actually have Jen here today. And Jen, thank you again for being here.

Can you just talk a bit about that, about the potential to further improve the mobility business as you start to, I guess, execute better on migrating customers up during their lifetime, right, to become higher premium customers?

Pascal, CFO, AT&T: Yeah, well look, it’s a play we’ve been running for some time. Over the last several years, we’ve seen improvements in ARPU. Part of it were through pricing actions, but our pricing actions have very rarely been broad, very broad based. They’ve been targeted in trying to encourage customers to change, to get off of some of our legacy plans. And oftentimes when we do that, we give them a choice.

Give them a choice, okay, if you want to pay the same amount, here’s another plan for you. Alternatively, we can give you more value if you move up to a higher price plan. And so the overall mix of subscribers has been positively impacted the last several years by customers choosing the more valuable plans. And that’s a phenomenon we have seen continue through the first half of the year. On top of that, look, periodically we do make certain moves to drive more value to the base.

As an example, we made a change in our auto bill pay discount. The amount of discount that you get for credit cards will be less than what you get for direct, pulling directly from your bank account. So all those things are different ways to extract and manage the value of the base, and we feel really good about our ability to do that. But we always do it with a goal of trying to make sure that we are conveying value to the consumer.

Mike Funk, Head of Telecommunications, Comm Infrastructure, and Comm Software Research, Bank of America: Seems like a very natural playbook. Indeed.

Pascal, CFO, AT&T: Yep. The team does a great job in really making sure that we do all this. And at the same time, what’s really impressive is we’re able to do this and continue to keep churn relatively low. If you look, we’ve led the industry in churn 16 out of the last 18 quarters. So feel that the value equation is always there whenever we make a pricing action, and oftentimes consumers are selecting higher value plans because of the value we’re conveying to them.

Mike Funk, Head of Telecommunications, Comm Infrastructure, and Comm Software Research, Bank of America: Yeah, I can’t believe I’m just getting to fiber now because it’s a big part of your story now going on, well, quite a long time, but you did increase your fiber passing target to, I think, 60,000,000 plus or more than 60,000,000. I forget the most recent comments More around than 60,000,000. Brent’s shaking his

Pascal, CFO, AT&T: head, yes. More than 60,000,000.

Mike Funk, Head of Telecommunications, Comm Infrastructure, and Comm Software Research, Bank of America: Yeah. I think John went on TV a while ago and said more than 60,000,000, so I’m safe with there. You know, any As you expand, you know, your fiber footprint, does it change your return profile, right? Because obviously you’re hitting different homes, different types of consumers. And then what levers do you have to pull as a CFO to ensure that you meet the expected or the mandatory rate of return?

Pascal, CFO, AT&T: You know, we couldn’t be more pleased with how we’re executing on fiber. When we first started to look at the opportunity, we understood that it costs a lot to deploy fiber. And it does, but it’s an investment that produces returns for decades to come. As we’ve expanded our base, what is really impressive is the team has gotten much more efficient. You know, you start with the fact that the fiber technology that we are using is connectorized.

So what do I mean by that? It’s very modular, so as much labor to put To install the fiber. Labor is our most expensive cost in deploying fiber. So the ability to make the installations much more modular and making sure we’re getting it right the first time. It’s been a real efficiency gain as we’ve scaled the fiber network.

Two, no secret. We are the largest and fastest growing fiber networks. As a result, we get really great prices. And the combination of the efficiencies that we’ve gained and through the installation and our supply contracts has kept our returns pretty attractive. You know, I look at our total cost to build, it’s gone up since 2023 less than 2%.

And we would expect, you know, that we can continue to manage that to reasonably low levels. The other thing that whenever we are executing on our fiber build, one of the benefits that we know is there is the ability to pair it with wireless. Where we, within our fiber footprint, our wireless share is 500 basis points higher. And so it’s another return vector for our fiber installations. When we first started to green light the cases for fiber insulation, we never considered wireless part of it.

In fact, today when the team does their execution and figuring out what can we return on it, wireless is just an added component. It’s not the core of the case. And given the uplift in wireless, these cases are not even The returns are really attractive. Mhmm. And it’s not even a close call.

Look, over time, does it continue to get a little more expensive to build? Yeah. But the cases are so accretive that I don’t expect at any point in the foreseeable future for me to say, no, we’re not going to build anymore because we’re not getting the return on it.

Mike Funk, Head of Telecommunications, Comm Infrastructure, and Comm Software Research, Bank of America: And just quickly on the cost to build comp that you made, think you said 2%, 3% over the last several years. You’ve seen the increase in aggregate, right? That’s not even annualized, that’s total cost increase. So what have you done to keep that cost down? I presume it’s probably mostly on the labor and the efficiency side because you’re going to do so much about the raw materials and components that you’re including.

And then, why do you think that’s going go up? Is that simply just the math around, you know, less population density in areas? Or are there other

Pascal, CFO, AT&T: expectations There for is normal annual labor cost increases. Yeah. But we are, as I said, like, the team is able execute on that more efficiently because of our technology. And the We’re able to get really good unit pricing on our materials as well. I wouldn’t under estimate the benefit of that because of our scale and you know, our suppliers will make sure that we are getting the best possible deal.

So all those things together are Is really what drives the overall cost equations. But we feel really good about being able to continue to manage that well.

Mike Funk, Head of Telecommunications, Comm Infrastructure, and Comm Software Research, Bank of America: Okay. FWA, we talked about it a little bit earlier when we talked about EchoStar. But has your strategic focus or view of FWA changed recently, especially after the EchoStar announcement? Obviously, more focus there. And then how should we think about that strategy or trend versus other recent fiber investments that you’ve made?

Pascal, CFO, AT&T: Yeah. You take a step back, fixed wireless. One of the things that has happened over the course of this year is we have opened up many more locations. Why is that happening? As we have been modernizing our network and deploying mid band spectrum, our ability to serve customers with fixed wireless has grown.

And that’s a big part of what you have seen in terms of the acceleration in growth the last couple of quarters. Now, with the addition of the spectrum from EchoStar and our continuation of our modernization effort, we anticipate being able to further increase the location served by fixed wireless. And importantly, we’re gonna Because we have more locations that are available currently, we’re gonna put some real marketing muscle behind it. Heretofore, we haven’t really put a messaging message around fixed wireless.

Mike Funk, Head of Telecommunications, Comm Infrastructure, and Comm Software Research, Bank of America: It’s all just in store promotion pretty much today, right? You haven’t actually been reaching out to consumers in their homes.

Pascal, CFO, AT&T: That’s right. Okay. And so, that’s why I think the opportunity is really exciting for us. The ability to serve more locations coupled with a really strong marketing message and being able to seize an opportunity in areas where we outside of our footprint, where we’ve historically been under penetrated relative to our own footprint. So I think there’s a lot of goodness ahead for us in that regard.

Mike Funk, Head of Telecommunications, Comm Infrastructure, and Comm Software Research, Bank of America: It also appears opportunistic to lean in a little bit more today given where cable is on their heels, correct? Opportunity to take more share in the broadband market near term?

Pascal, CFO, AT&T: Look, we will take share from wherever it may come, whether it be cable or some of our competitors. We think we have an opportunity to When you look at some of our major telco competitors Mhmm. They have considerably more fixed wireless customers. There is no industrial reason why we shouldn’t have more over time now that we are continuing to expand the locations served.

Mike Funk, Head of Telecommunications, Comm Infrastructure, and Comm Software Research, Bank of America: And I don’t want to skip over this one really quickly. The mid band spectrum from EchoStar, just to reiterate, once you get FCC approval, you can deploy that immediately. You don’t have to wait until a deal close, correct?

Pascal, CFO, AT&T: That is correct. As part of the deal with EchoStar, we entered into a leasing agreement whereby we can lease the mid band spectrum before close. Would that But we need the regulators to approve that aspect of the deal, and once it happens, we can start to deploy that. And the way to think about the mid band deployment is it’s more akin to a software upgrade, We don’t have to send people out to touch towers to deploy this.

Mike Funk, Head of Telecommunications, Comm Infrastructure, and Comm Software Research, Bank of America: Any anticipated concern or pushback from the regulators in the deal?

Pascal, CFO, AT&T: Look, I’m not gonna speculate on that. They will go through their normal diligence and let us know whether they have any concern. Point out we already are deploying three dot four five within our network, so you would anticipate that from an ideology perspective there shouldn’t be any concern, but time will tell.

Mike Funk, Head of Telecommunications, Comm Infrastructure, and Comm Software Research, Bank of America: Okay. Last question for you, Pascal, purely in your CFO hat. The kind of future state looking out, we’ve pulled forward some capital spending now post bonus depreciation reinstatement. You kind of increase the envelope. So future state, are we just a less capital intensive company with better free cash flow growth, better operating leverage?

What’s that future state look like?

Pascal, CFO, AT&T: Yeah. One of the things that’s really exciting about where we are today and the plans that we have in place is you think about AT and T towards the end of this decade. AT and T will be largely out of its copper footprint, which comes with a $6,000,000,000 cost base. We will have completed our wireless modernization. So we are going through a process right now that we expect largely to last the next couple of through 2027, where we are touching every single tower and changing radio access network networks to more modern open architecture.

That ends by 2027, so we will have the most modern wireless network with open architecture. We will be through our fiber build phase, you know, over 60,000,000 consumer and business locations passed. And you know, you think about the margin profile of that business. And I think It’s a really exciting time to be an AT and T shareholder because there’s a This is gonna be a business that is gonna have the only scaled wireless and fiber network. No one else is gonna have that level of scale across both products and the very best technology.

So the margin profile on that would be incredibly attractive.

Mike Funk, Head of Telecommunications, Comm Infrastructure, and Comm Software Research, Bank of America: Perfect timing, Pascal. Thank you again so much for doing this.

Pascal, CFO, AT&T: Thank you.

Mike Funk, Head of Telecommunications, Comm Infrastructure, and Comm Software Research, Bank of America: Hey, thank you all for coming.

Pascal, CFO, AT&T: Pascal, thank you. Thank you.

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