Citi Global Conference attendees were told that AT&T will provide additional fiber investment updates ‘in the coming weeks’
Last week, Jenifer Robertson, AT&T’s executive vice president & general manager of mass markets, offered insight into the operator’s convergence strategy at the Citi Global Conference, claiming that a higher fiber penetration results in a bigger “lift” for wireless.
During a July earnings call, AT&T CEO John Stankey said the operator is “in a race to convergence,” as it looks to profit from the combination of fiber broadband and mobile services. “It’s one of the tools we’re going to do to put distance between ourselves and everybody else,” he said.
At the time, analysts expressed doubt about this plan, pointing out that AT&T’s wired footprint covers about 45% of the country, and less half of that footprint is upgraded to fiber. Since then, however, AT&T has announced a deal with Kinetic, the broadband brand of Windstream Communications, to create a fiber + wireless service bundle across Kinetic’s 18-state, rural-focused footprint. Customers who get both wireless service from AT&T and home broadband from Kinetic will get $20 off of their monthly internet services, for up to 24 months as long as they maintain both services; existing Kinetic customers who switch to AT&T can also get a $200 rewards card, in addition to AT&T’s standard promotional offers. Kinetic offers plans with speeds up to 2 Gbps.
But discounts, said Robertson at the Citi Global Conference, aren’t the entire strategy. “Having a bundled discount gives an advantage of penetrating and anchoring those homes early… But … if it’s simply a discount and we stop there, that isn’t a promise of convergence,” she said, explaining that AT&T is looking to conversions to “grow profitability,” and, therefore, is “transforming both networks at the same time to get to the lowest marginal cost on both a wireless network and a wireline network.”
She continued: “The discount isn’t as far as we go; there is line of sight to additional revenue via new products and services over time. We like the proposition that convergence has to meet customer demand … pull costs out and grow revenue in the long run.”
Robertson told event attendees that AT&T will provide fiber investment updates “in the coming weeks.”
