AT&T Inc. offered more concrete plans for its telecommunications operations after it abandons the entertainment business, detailing goals to drop old copper telephone networks and build new fiber-optic lines.
The Dallas company issued new financial targets Friday, the same day Discovery Inc. shareholders approved their company’s plan to merge with AT&T’s soon-to-be spun-off WarnerMedia division. The telecom giant bought the media company, then called Time Warner, in 2018. But AT&T in May announced plans to leave Hollywood and hand its shareholders a stake in a larger media company structured to more aggressively compete with rivals such as Netflix Inc. and Walt Disney Co. in the global race for streaming-video subscribers.
AT&T on Friday said it would focus its investments on fifth-generation wireless network connections and fiber-optic lines. To that end, the company said it would cut its network of copper lines—a legacy of its landline telephone network—in half by 2025, allowing the company to serve 75% of its network footprint using 5G and fiber.
The company said it would double the number of locations it serves through fiber lines to more than 30 million. That implies AT&T will add another 3.5 million to 4 million fiber locations to its subscriber base each year.
AT&T telecom chief Jeff McElfresh said during Friday’s virtual investor conference that the company had lost fiber-optic business opportunities for several years before it invested in adding new customers. He added that fiber-optic expansion is now a top corporate priority.
AT&T and Verizon Communications Inc. have both refocused their attention on broadband and mobile-phone service in recent years after scrapping big bets on digital media and entertainment. Verizon last week offered investors an overview of its plans for coming years and said its “ultra wideband" 5G network will cover 175 million people by the end of 2022, a year ahead of schedule.
AT&T executives have said they would expand their 5G network more slowly to take advantage of wireless spectrum licenses as they become available. The company said it would expand its portfolio of 5G airwaves with more C-band spectrum that will cover 80 million people by year-end and 200 million people by the end of 2023.
AT&T has spent the past decade looking for ways to sell or abandon its high-maintenance copper lines. Federal and state regulations requiring telephone companies to guarantee a certain level of service have slowed their transition away from maintaining the equipment.
Telecom companies across the country are replacing copper wires with high-speed fiber lines that can carry enough internet data to serve modern homes and businesses. The replacements boost revenue and save operating expenses in the long run, though the upfront investment needed to build the new lines is costly.
AT&T plans to nearly halve its dividend after closing its media spinoff, a move that will help the remaining telecom company steer cash toward other priorities. The company said Friday it expects to pay its May dividend in line with the new $1.11 annual payout. Executives expect the WarnerMedia spinoff and merger with Discovery to close early in the second quarter.
Shares in AT&T were flat in Friday trading.
This story has been published from a wire agency feed without modifications to the text
