AT&T reported a strong 708,000 postpaid phone net adds in the third quarter 2022.
A call with some company execs after the earnings report shed more light on where those net adds came from.
Although it doesn’t break out cohorts for its net adds, Amir Rozwadowski, AT&T’s SVP of Finance, said there were “north of 300,000 FirstNet connections” in the quarter, but those connections weren’t all phones.
However, he said there are a “good amount of postpaid phones in that number.” He said AT&T Business also contributed to the 708,000 number as well as “healthy traction in our consumer market.”
He added, “There’s this headline discussion there’s all these promotions by AT&T that must be driving growth. But a lot of strength is coming from FirstNet; a lot of strength is coming from Business relationships.”
Chris Sambar, EVP, AT&T Network, said, “Verizon had massive share in public safety. We’re a share leader in public safety now. That’s been reinforced by Hurricane Ian as an example.”
Recon Analytics analyst Roger Entner recently shared some data that showed the pool of wireless subscribers is increasing because parents are buying phones for their children at ever-younger ages. A lot of this, sadly, stems from gun violence in schools.
Rozwadowski said AT&T doesn’t provide details on age groups, but he would agree with the general assumption about younger kids increasing the wireless subscriber pool.
The 708,000 net adds from Q3 brings the company to 2.2 million-plus postpaid phone net adds through the third quarter.
In other metrics, wireless service revenues of $15.3 billion were up 5.6% compared to the third quarter a year ago.
AT&T also boosted its target for mid-band 5G spectrum deployment. It had been saying that it expected to cover 100 million people by year-end, and today it updated that target to more than 130 POPs by year-end.
For the company as a whole, it reported revenues of $30.0 billion for the quarter and adjusted earnings per share of $0.68.
Last quarter, the company spooked investors by saying that some subscribers were taking a couple days longer to pay their bills. But today, AT&T reported free cash flow of $3.8 billion and $14 billion for the year.
AT&T CEO John Stankey said on today’s call, “Our free cash flow for the quarter was in line with our expectations despite higher capital investment spend and we’re on track to deliver on our previously stated $24 billion capital investment plan for the year. At the same time, we hope this healthy free cash flow gives you confidence in our ability to achieve our target for free cash flow in the $14 billion range for the year. A level that is more than ample to support our $8 billion dividend commitment.”
Today’s call seemed to satisfy investors. AT&T’s stock is up more than 8%.