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AT&T promises to steal mobile customers from rivals

AT&T is in the process of shedding its content and media business in order to focus more heavily on selling fiber and 5G services. And the company's recent financial guidance indicates AT&T expects to be successful in the effort.

Speaking Tuesday at the Bank of America 2021 Media, Communications & Entertainment Conference, AT&T's new CFO, Pascal Desroches, said the company has a relatively simple strategy to meet its financial objectives, particularly when it comes to its mobile business.

"It's really gaining new subscribers," he said. "And we think we can do that."

Desroches said that AT&T plans to continue to encourage its existing customers to upgrade to more expensive postpaid unlimited plans, but beyond that he said AT&T expects to gain market share from rivals Verizon and T-Mobile. He said the company would do so via a number of strategies, including targeting specific market segments (like first responders via its FirstNet offering) as well as through localized marketing promotions.

Another area for AT&T's growth: wholesale revenues. "We're going to continue to look to add wholesale relationships," Desroches said, pointing to AT&T's recent MVNO agreement with Dish Network.

"All those things collectively are allowing us to grow and to gain share," he concluded. "And we believe we can continue to gain share through great execution."

It might be time to buy AT&T

Some financial analysts believe AT&T may well be successful.

"We believe AT&T's wireless and fiber growth opportunity is not being properly recognized by the market," wrote the analysts at LightShed Partners in a recent post to investors. The firm gave AT&T's shares a "buy" rating. "AT&T has the most momentum in the wireless industry."

The analysts also raised a number of questions as to whether T-Mobile can make demonstrable progress against AT&T and Verizon throughout this year and next. That's noteworthy considering T-Mobile has loudly boasted of its lead against its rivals in building out a speedy 5G network with valuable midband spectrum – and most analysts agree that T-Mobile is the one to beat in 5G.

The LightShed analysts agreed that T-Mobile does indeed have an opportunity to pull away from the pack thanks to its 5G spectrum holdings, but that the company needs to provide more evidence that it will actually do so.

"We will remain on the sidelines until we observe traction in growth and greater clarity on its spectrum deployments and spectrum acquisitions that we think need to be done in order to extract maximum value from that spectrum," they wrote of T-Mobile.

Overall, AT&T's Desroches offered a relatively positive outlook on AT&T's business, both in mobility and wireline. "I feel really good about our ability to grow," he said.

However, Desroches acknowledged that AT&T's growth strategies could put pressure on the operator's profits. For example, the company continues to offer an aggressive free smartphone promotion. "Is this going to result in a little bit lower ARPU [average revenue per user]? Maybe, yeah," he said. "But, with that said, over time our ARPU will still be very attractive relative to others."

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Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

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