AT&T 'Outgrowing' Verizon As 5G, Fiber Investments Pay Off In 2023

"We’re going to tackle the market the same way that we've been attacking it over the last three years. Our point of view is that we're building sustainable infrastructure that will build a franchise that will last for many years to come," said AT&T CEO John Stankey during the carrier's Q4 2023 earnings call Wednesday.

Telecom giant AT&T spent 2023 investing in the areas it’s seeing the most profitable growth, namely 5G and AT&T Fiber. That strategy is leading to wins over the competition and won't change in 2024, CEO John Stankey said during the carrier's fourth-quarter 2023 earnings call on Wednesday.

"We’re going to tackle the market the same way that we've been attacking it over the last three years," Stankey said. "Our point of view is that we're building sustainable infrastructure that will build a franchise that will last for many years to come."

To that end, Stankey said that AT&T has "outgrown" its telecom peer Verizon in the wireless race. Basking Ridge, N.J.-based Verizon reported Q4 2023 and full-year earnings on Tuesday.

"We [outgrew Verizon], I think, by being very disciplined on our promotional levels and being very strategic in the channels that we operate in," Stankey added.

The Dallas-based carrier said its nationwide 5G network now covers more than 210 million people and passes more than 26 million locations, which was on track for the company's 2023 target number.

AT&T Fiber net adds totaled 273,000 in the fourth quarter and 1.1 million net adds for full-year 2023, marking 16 straight quarters with more than 200,000 net adds and the sixth year in a row with 1 million or more AT&T Fiber net adds.

The company added 526,000 postpaid phone adds during the final quarter of the year and 1.7 million postpaid phone subscribers for the full 2023 year.

Q4 And Full-Year 2023 Results

AT&T's mobility segment revenue totaled $22.39 billion during the quarter, a 4.1 percent increase compared with $21.50 billion in the same quarter a year ago. The overall communications business, which includes high-speed internet, video and legacy voice services, climbed slightly by 1.4 percent to $30.80 billion during the quarter compared with $30.37 billion in the fourth quarter of 2022.

Mobility segment revenue for the full-year grew 2.7 percent to $83.98 billion compared to $81.78 billion in the last quarter of 2022.

A big feather in the carrier's cap this quarter was Mobility Services revenue once again, which climbed 3.9 percent to $16.04 billion, up from $15.43 billion a year ago, driven by subscriber growth. The segment grew 4.4 percent during 2023 to $63.18 billion compared to $60.50 billion in 2022.

Mobility Services operating income during the quarter totaled $22.39 billion, up 4.1 percent from $25.50 and up 2.7 percent for the full-year. Mobility Equipment revenue also increased 4.7 percent from $6.35 billion in fourth-quarter 2022 from $6.07 billion in Q4 2023. Overall for the year, however, Mobility Equipment revenue dipped 2.2 percent, which the company said was due to lower device volumes earlier in the year.

Business wireline, on the other hand, which includes advanced ethernet-based fiber services, IP Voice and managed professional services as well as traditional data services, fell 10.3 percent during the quarter to $5.06 million compared to $5.63 billion a year ago. The segment dropped 7.3 percent during the year to $20.88 billion compared to $22.54 billion in 2022, which AT&T attributed to lower demand for legacy voice and data services.

Business Wireline services fell 11 percent during Q4 2023 and 7.4 percent for the full year. Business wireline equipment grew 10.5 percent during the quarter and declined 5.9 percent during 2023.

AT&T CFO Pascal Desroches said that the company expected Business Wireline revenue trends to improve in 2024.

Business wireless solutions revenues, however, grew 5.9 percent during the quarter thanks to continued connectivity growth through 5G and fiber expansions and within the SMB segment, Desroches said.

"This is an area where we continue to grow faster than our nearest peer," he said.

Total operating revenue for the fourth quarter that ended December 31 was $25.07 billion, a modest increase of 1 percent from $24.83 billion in the same quarter one year earlier. Diluted earnings per share during AT&T's fiscal fourth quarter was 30 cents, compared to $1.97 a year ago. AT&T's Q4 results missed Wall Street's expectations during last quarter of the year.

AT&T's stock fell by almost 3 percent in trading Wednesday to $16.69 as the company issued its adjusted earnings per share forecast of $2.15 to $2.25 for 2024, below analysts’ expectations.