AT&T at KeyBanc Forum: Network Convergence and Cost Efficiency

On Monday, 11 August 2025, AT&T (NYSE:T) participated in the KeyBanc Capital Markets Technology Leadership Forum, where CTO Jeremy Legg outlined the company’s strategic focus on network convergence and cost reduction. While emphasizing the positive impacts of modernization, Legg also acknowledged challenges in transitioning from legacy systems.

Key Takeaways

• AT&T is advancing network convergence by integrating wireline and wireless networks.
• The company is laying fiber at a pace equivalent to the distance from New York to Los Angeles each month.
• Software-defined networking is reducing the need for physical infrastructure.
• AT&T is leveraging large language models (LLMs) to enhance operations and customer service.
• The company aims to combat tech debt by prioritizing new infrastructure investments.

Network Modernization

• Wireline Network Simplification: AT&T is aggressively expanding its fiber network and integrating it with wireless operations for efficiency. The transition to Linux-based systems is underway.
• Software-Defined Networking: The company is reducing physical infrastructure by enabling software-based routing and deploying updates via the cloud.
• Wireless Network Simplification: Implementation of Open Radio Access Network (O-RAN) is a key focus, with millions already using the standalone core.

Internal Initiatives

• Tech Stack Rebuilding: AT&T is overhauling its tech stack, retiring thousands of applications, and modernizing infrastructure in the cloud.
• Use of Large Language Models (LLMs): With over 600 models in production, AT&T uses LLMs for network management, fraud detection, and customer service improvements.
• Tackling Tech Debt: The company isolates costs related to tech debt and minimizes spending on outdated infrastructure.

Product Development and Partner Ecosystem

• New Product Introduction: AT&T is focusing on software-based products such as cybersecurity solutions.
• API Monetization: The company is exploring ways to monetize APIs, offering services like location and security.
• O-RAN Partner Ecosystem: AT&T is fostering a diverse ecosystem of radio and antenna providers.

In conclusion, AT&T’s strategic initiatives at the KeyBanc Forum highlight its commitment to modernization and cost efficiency. For a detailed overview, please refer to the full transcript below.

Full transcript - KeyBanc Capital Markets Technology Leadership Forum:

Brandon Nispel, Communication Services Analyst, KeyBank: Welcome to day one of the KeyBank Technology Leadership Forum. Thanks everybody for being here. My name is Brandon Nispel. I cover communication services for KeyBank. This presentation is a twenty five minute fireside chat.

We have Jeremy Legg, CTO of AT and T. Jeremy, welcome.

Jeremy Legg, CTO, AT and T: Yeah, thanks for having me. A good place to have a conference.

Brandon Nispel, Communication Services Analyst, KeyBank: So real quick, safe harbor for AT and T. Before we begin, I need to call attention to Safe Harbor, which says some of the comments today may be forward looking. There’s risks and uncertainties. Results may differ materially. Additional information is on AT and T’s website.

So again, Jeremy, thank you.

Jeremy Legg, CTO, AT and T: Yeah. Well, I’m glad to be here.

Brandon Nispel, Communication Services Analyst, KeyBank: Why don’t we just get started? Help us understand your background, role at AT and T, and really your key priorities from a technology standpoint in ’twenty five.

Jeremy Legg, CTO, AT and T: Sure. I actually came over from the Time Warner merger, WarnerMedia merger. I was over there. And when John Stankey moved over to AT and T, he brought me with him. And my responsibilities at AT and T are all of the technology there, with the exception of the operations of building out the last mile.

So I don’t have the teams that are building the last mile. We do all the network architecture in my group for it, but we don’t have the operations to climb up a tower or put the fiber in the ground. But all the other stuff sits in my world.

Brandon Nispel, Communication Services Analyst, KeyBank: Got it. How would you characterize sort of your top priorities for ’twenty five?

Jeremy Legg, CTO, AT and T: So convergence is obviously the thing you hear a lot about. And that’s perceived, I think, as a marketing bundling opportunity, which it certainly is. But in my world, convergence is about how we actually get both sides of our scale businesses running over the same pipe. And how do we actually become the lowest cost transport provider on the internet. And so what we’re in the midst of doing right now is actually converging our wireline and wireless networks together so that as we think about how we amortize the cost of that, we’re doing it over two businesses versus one.

And historically, those have been pretty separate networks. And increasingly, now we’re actually unifying all of that.

Brandon Nispel, Communication Services Analyst, KeyBank: Got it. And you joined AT and T, I think, about five years ago. How do you sort of help us understand your excitement and the opportunity that you have in front of you from a technology standpoint.

Jeremy Legg, CTO, AT and T: It’s really an exciting time to be in telecommunications. I mean, think about the kinds of investments that are going into the ground, going up in the air and satellite. It’s really one of those moments where all the technology is transforming. So what we embarked on, this began probably about four years ago, was actually removing the proprietary hardware out of our core backbone that goes around the country, so our core ring of our network. And that’s now software defined.

So that’s x86 compute, Linux boxes and commodity chips. What we’re now doing is extending that out to our central offices. And that’s a big deal, right? There’s over 4,000 central offices across the country as well as Mitsos ultimately when we start getting into the wireless side. And that’s now actually removing the proprietary hardware that sits in all of those central offices as well as all those legacy services and moving to Linux based software compute inside of all of those central offices.

That is a massive cost restructuring. It’s a complete rebuild of the wireline network in and of itself. And so our ability in the time frames that we’ve already articulated as part of Investor Day, we’re in the midst now of completing that within those time frames. And we actually will be lighting up some of this the first part of next year.

Brandon Nispel, Communication Services Analyst, KeyBank: Wow. So let’s talk about some of your topics that you really discussed at the twenty four Analyst Day. It was really about network simplification, application consolidation, and really generative AI. We’ll hit on all of those, but maybe start by wireline network. Give us a high level overview of what’s being done.

I think you were touching on it there in terms of simplification of sort of the core central offices.

Jeremy Legg, CTO, AT and T: Yes. I mean we’re to give folks an idea of the size of this implementation, we’re laying fiber roughly the equivalent from New York to L. A. Every month. And that’s last mile infrastructure as well as middle mile infrastructure.

We’ve taken up, as we said in our earnings last quarter from the tax cuts, we’re going to be increasing the number of homes passed that we’re doing on wireline. So the endpoints that we’re generating across the network, whether they be consumer endpoints or business endpoints, is going to increase the amount of traffic that sits on that network. In addition, it will be integrating in with the wireless network so that we’re going to have essentially a complete rebuild from O RAN at the RAN to Linux based compute inside of our wireline network that really transforms our underlying cost structure associated with how we run those services. So it’s kind of a once in a lifetime opportunity, honestly, or at least once in a career opportunity to be able to rebuild networks like that.

Brandon Nispel, Communication Services Analyst, KeyBank: You teased it a little bit, but talk about the approach towards software defined networking and how you’re pushing software defined networking from sort of the core out to more of the edge facilities. Help us understand what that means architecturally.

Jeremy Legg, CTO, AT and T: So if you think about the way that these networks have been built historically, if you wanted to put a new router in, you’re going to send someone into a central office or into a physical facility, and they’re going have to install that router. What this converts into is the ability to actually download software. So you have software based routing. You don’t have to send human beings into those central offices in the same way that you did before. And you can manage software updates akin to what you see many device manufacturers doing.

We’re actually pushing updates from the cloud down into the infrastructure that sits in the network. So that’s what’s really happening across our broader network. And that’s a really, really big deal because when for those of you that have ever been in a central office, there is a lot of gear in there. And there’s a lot of gear that dates back to all the legacy services that telcos have been providing for many, many decades as well as the new services. So you’re talking about taking physical infrastructure of many, many, many racks of gear and basically putting it in a couple of racks.

And also, within when you think about the number of central offices that you have to instrument with that gear, you don’t have to put it in all of them. So if you have 100 central offices, you may be able to only have the gear in 30 or 40 of them, and they just all talk to each other. But some central offices essentially just become pass throughs. So the physical infrastructure that we have to pay for hardware to put in those central offices goes down dramatically. The labor goes down dramatically.

And then your ability from an operations standpoint to maintain that gear is driven by software. So CICD pipelines and things that you hear about from software companies, that’s how we’re building that, both for our mobility cores as well as for our wireline network.

Brandon Nispel, Communication Services Analyst, KeyBank: So talk to us then what that means from a product standpoint, both from like a legacy product and maybe decommissioning some of those and also from a product introduction new product introduction standpoint.

Jeremy Legg, CTO, AT and T: Yes. So our goal is to have as few of these legacy services as possible. And so it’s well documented that we’re well down the path of getting through the regulatory environment to be able to decommission as many of those legacy services as we can and then offer catch products to them that sit on that new technology stack. But what it means from a product perspective is that you’re in the same way that you can go to a website or go to an app and instantiate a product from an Amazon or whatever it might be, it’s the ability to now do that with a telco. So as you want to spin up a cybersecurity product to protect your network if you’re a company, you can actually go and provision that product through software and instantiate it inside of your network.

Those kinds of things you really can’t do today. It’s much harder to do that. It takes physical gear that you have to put into those places. And once we’re at the end of this journey, you’re going to be able to do those things.

Brandon Nispel, Communication Services Analyst, KeyBank: So is that you know, how do you think about partners then from a new product perspective and layering on top from an application standpoint onto the network?

Jeremy Legg, CTO, AT and T: Yes. So there’s a host of things that are actually happening in the industry now through Camara and TM Forum and API layers that sit on top of these networks. In some cases, I think we want to open this up to the broader industry because back to my original point, how do you get more bits on our network? And that’s a big piece of that and allowing companies to integrate in. Another area of this, though, is similar to what you see through traditional software companies where you begin to monetize APIs.

And you don’t need to build a product. You’re really providing a service that goes back, and that can be anything from location services to security services, quality of service so that people can see the performance of a bit inside of the network. A great example of this is most third party companies can’t really see the traffic in the last mile and the quality of service associated with that traffic. Well, you can open that up through an API and allow people to see what’s really happening with the bits in the last mile. That just becomes a service.

It’s not really a finished good product that you’re going to put out into market. But we intend to do both. So we want to both monetize APIs through services as well as provide new products. And there’s some things that we’ve already done to start with that with Dynamic Defense, which is one of our security products as an example, where you can begin to filter the bad guys at the Internet peering points before they ever get down to the endpoints of the devices that consumers or businesses use.

Brandon Nispel, Communication Services Analyst, KeyBank: Got it. Let’s switch gears a little bit, go towards, you know, the wireless side of the network. Talk about network simplification there too. What type of initiatives do you have going on, on the wireless side?

Jeremy Legg, CTO, AT and T: A lot. So, you know, our O RAN initiative where we did put the Nokia Ericsson components that we publicly disclosed, we’re well down the path of putting the Ericsson gear into the O RAN network as well as opening it up. We actually made one of our first phone calls off of that new infrastructure very recently. And then and when you go back further into the network, into the mobility cores, we’ve actually built our mobility core cloud native in the public cloud. So what that really means is, is that you’re, again, being able to use software to build new products and services into the network itself and use public cloud infrastructure to be able to do that.

So all of the tooling you see in an Azure, as an example, or in AWS or in a Google, those kinds of services now become available to those mobility cores. So we’re well down the path of that stand alone core. We’ve got millions of subscribers on it already, and we’ll continue to ramp that up as well as finish out O RAN. O RAN will take the industry, right? That’s not going to be just us.

That’s opening up of the wireless network in the same way that you think about opening up of the wireline network that I described before. Wireless networks have traditionally been very closed. You can’t just plug into a wireless network. O RAN changes that equation and allows people through SDKs, RDKs and other software tools to be able to plug into the network and leverage those services.

Brandon Nispel, Communication Services Analyst, KeyBank: Got it. I mean it was a big decision for AT and T to go down this O RAN to push. Talk to us about what got you comfortable sort of making these changes.

Jeremy Legg, CTO, AT and T: Well, it was moving it was a number of things. One was the economics of it, and it made sense for us to do. The second was that we thought the networks needed to be open, that ultimately closed network ecosystems generally break down. And you were starting to see that with a lot of the infrastructure providers for these closed networks. There was a lot of consolidation going on in that industry.

And then the third point is that we got the culture and philosophy of people whose business models were really focused on closed ecosystems to realize that open ecosystems were ultimately going to be whether they wanted it to be there or not was ultimately going to be what was going to happen. And once we got all of that stuff aligned, you know, we really became comfortable in moving down this path. And we think it’s we continue to believe it’s the right path.

Brandon Nispel, Communication Services Analyst, KeyBank: You a couple of years ago, you announced an agreement with Ericsson. Talk about how the partner ecosystem is sort of developing around sort of O RAN for you specifically.

Jeremy Legg, CTO, AT and T: Yes. So it’s a we want the ability to have multiple radio and antenna providers for a single RAN. We want there to be the ability to have virtualized RAN or centralized RAN and have different sets of software that are running on those baseband boxes. That makes a lot of sense. The long pole in the tent will be the API layers that sit on top of this infrastructure and how much adoption you really begin to see across the industry in leveraging those APIs.

But the fundamentals of O RAN, it makes a lot of sense to do it. There’s you’ll see, as you look and read about O RAN or VRAN or C RAN, they’re all sort of close cousins and brothers and sisters, it’s the same thing. The biggest issue is brownfield providers versus greenfield providers. If you’re a brownfield provider, well, you already have a RAN at the base of every tower. So how are you going to architect it so that you’ve got 100 RANs that are now coming back to a centralized point?

That’s a lot of engineering, both physical engineering as well as software engineering. And so that takes more time than doing a greenfield implementation of that. And most scale providers are brownfield providers like ourselves.

Brandon Nispel, Communication Services Analyst, KeyBank: Got it. I wanted to shift gears. I mean we talked a little bit about sort of network initiatives at Chad. I want to talk a little bit more about more internal initiatives that you have from a technology standpoint. Maybe help us unpack what you’re working on from an internal technology standpoint.

Jeremy Legg, CTO, AT and T: Yes. We’ve if you think of the tech stack in sort of simple terms, you have layer one and two, which is what we’ve just been talking about, which is the physical network itself, the towers, the central offices, all that kind of And then as you move up, you get more and more software. The layer one and two is becoming more and more software, but you get more into pure software. So you get into things like the mobility core. You get into things like our point of sale systems.

You get into things like our digital applications and all of the IT infrastructure that supports this stuff. We’re rebuilding all of that at the same time as what we’re doing down at the base levels. So what we’re trying to accomplish as a company, as we’ve talked about what we did on Investor Day as an example, is over that same window that we’re providing the financial guidance to the markets, we’re rebuilding the infrastructure of the company to change the cost basis of what it takes to run these networks. And that’s really hard. We have a lot of old infrastructure.

We have a lot of technical debt, just like a lot of telcos do. But we’ve ripped out a significant amount of that. We’ve already retired a couple thousand applications that we no longer need. We’ve modernized much of our infrastructure up in the cloud. We’re one of the largest cloud partners that one of the hyperscalers has today.

And we’re going to rip out our point of sale systems. We’ve already done most of our customer care and call center systems, and those have been replaced. And so over the next few years, our spending curves associated with what we have to do there are going to go down. And our ability to run the network and be the lowest cost bit transport provider, which is really what our goal is, is achievable.

Brandon Nispel, Communication Services Analyst, KeyBank: So you sort of alluded to it, but help us conceptualize sort of what this end state looks like for you. What does it enable AT and T to do in the next three to five years?

Jeremy Legg, CTO, AT and T: So if you take I’ll start at the top and then just sort of go down to the base, which is if you go to our digital application, you’re going to have personalized services and personalized offers that can go to you because we have that customer relationship. If you go into a retail store, once we complete our sales force implementation as an example, we will have all the information consolidated from any calls you’ve made to customer care, any outages that you’ve experienced, where you are in your upgrade cycle for your iPhone, basic customer relationship management kinds of capabilities at retail that we have heretofore not had enough of. As you then move down the layer of that, you’re running mobility cores and you’ve collapsed all these old mobility cores because we run a lot of mobility cores today. You’ve collapsed those cores into that cloud based standalone core that I described before and you’ll have migrated your base of subscribers onto the five gs standalone core, which changes your cost structure. And as you go down even further, you get into what’s happening in the central offices, what’s happening in the Mitsos, what’s happening in O RAN and the completion of that infrastructure.

So we are attempting to get all of this done within the guidance periods that we described before, and we’re very well down the road on this stuff. So it’s very real. It’s very hard. It’s not this is a lot of blocking and tackling and operational support that we have to provide. It requires a lot of software updates.

It requires culture change and the people that operate these parts of the network. But it’s where it’s all headed. And we have a lot of conviction around getting this stuff completed. For no other reason, we don’t have any choice. Like if we’re going to be competitive in the markets of the future, we have to change the infrastructure that we have today.

Brandon Nispel, Communication Services Analyst, KeyBank: Really changing the cost structure too with it. Talk a little bit about AT and T’s internal initiatives with large language models. Can you give us some examples of how you’re using LLMs internally?

Jeremy Legg, CTO, AT and T: Yes. I had the fortune of running the Bell Labs components of the company in my group. And so we actually have a long lineage in AI. Now AI is GenAI in particular, now AgenTeq AI is the current flavor of the month. But we’ve been doing this for a long time.

And I’d mentioned before, we’ve got over 600 models in production across our infrastructure. What we’ve done is and again, guess I’m using sort of layer cake metaphors, but we can build LLMs. We do build some SLMs, but our focus is less there. The focus is on how do we leverage that technology and the chips that underlie it for our own data. Because it doesn’t all of these LLMs were trained on the same information.

They’re trained on the open Internet. I mean, Reddit is one of the primary ways that the LLMs validate whether they’re accurate or not. Well, don’t have any of our data. They don’t have our network data. They don’t have our customer data.

So as we’ve begun to ingest that data into these LLMs, we are tuning it for us. And the insights and the data science that we’re using are very specific to the kinds of problems that we have. And so this is where I get into the point of being a practitioner of AI versus focusing on some of the things that you read in the press of what one LLM said about another LLM. It’s how do we use that to enhance the way we deal with RF and spectral efficiency? How do we use that to change the way we have relationships with customers to solve their problems?

How do we use that to identify fraud? How do we use that in order to remediate issues in the network itself faster? So an example is we’ve loaded every trouble ticket in the company into our generative and agentic AI frameworks. It now recommends what the fixes are and can write the code to do the fix. And should we just go ahead and automate that?

We’re still human in the loop there. But these are major, major changes. And then also on the revenue side of the equation is how do you begin to ingest this stuff into the products and services that you offer. And so we’re already doing that with things like upsells. We’re doing that in products like Dynamic Defense, where on the cyber realms, you can’t be the unsecure network provider.

And so you’re seeing AgenTic and GenAI threats coming in, and we’re able now to block those from the network itself.

Brandon Nispel, Communication Services Analyst, KeyBank: Got it. Talked a lot about different technology initiatives. The AT and T of the past, I think, was sort of had a lot of tech debt, right? You’re sort of dealing with that today. How do you make sure that you’re architecting in a way that you avoid tech debt in the future?

Jeremy Legg, CTO, AT and T: Yes. I mean there’s a combination of things here. Some are technical and some are actually finance. Isolating the costs associated with the tech debt itself and understanding kind of product based costing on that legacy infrastructure is essential and then starving it, making sure that when a new dollar of capital comes in that you spend the minimal amount possible on that legacy technical debt so that you continue to build the new. The other things you do is, as you set up your human capital, it’s bifurcating how many people are working on the old stuff versus how many people are working on the new stuff.

The business is going to want to get things out to market as quickly as possible, which may push you towards doing things on the old infrastructure. But you’ve got to be able to build out the new infrastructure and stay ahead. So I call it the run fast strategy. How do we keep the new stuff running far enough ahead of the old stuff that ultimately it overtakes it? And that’s another big component of that.

There’s a regulatory angle to this on legacy products and services of and I big hats off to our public policy groups that’s assisting us in how we get out of some of the traditional voice services, as an example, DSL services and other things for those legacy products. So but the first thing is to size the problem, understand the cost with it, put the human capital against it and recognize that that’s not something that happens overnight. It’s a slog to get that stuff out of the network. It took decades to put it in the network. But we’re well down the path on doing that now.

Brandon Nispel, Communication Services Analyst, KeyBank: Great. With that, we’re just about out of time. So thank you, everybody, for joining us. And Jeremy, thank you for your time.

Jeremy Legg, CTO, AT and T: Yes. Thank you. Appreciate it.

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