AT&T Plans Big Swing as It Retires More of Its Legacy Copper Network

In December, AT&T received FCC approval “to begin the process to stop selling, transition and discontinue legacy voice services at a small number of wire centers, utilizing our AT&T phone advanced service as a replacement,” Stankey said on a call with analysts: “This was an important first step to establish a template that supports a deliberate and planned transition to a more capable and modern communications infrastructure.”

The previous FCC, under Democratic Chairwoman Jessica Rosenworcel, allowed AT&T to initially stop new sales and then discontinue residential local service in nine Oklahoma wire centers, a move the Communications Workers of America blasted (see 2412230066). AT&T’s proposal to transition the wire centers was deemed granted after the agency took no further action.

Stankey said he's hopeful that additional copper retirements can proceed quickly under new Chairman Brendan Carr. Indications so far are that the current FCC wants to “scale” the changes “more rapidly and have an appropriate way to clear them through faster,” he said.

Stankey said the FCC understands that moving off copper will “stimulate investment in the right kind of going-forward technologies.” But moving customers off legacy networks will take years, the CEO conceded. “We have to go through notice cycles with customers,” he said: “We then have to ultimately transition them. We grandfather them. So these are not things like you file, and 90 days later you're starting to see a dramatic shift.”

In a letter last week to Congress and the administration, USTelecom stressed the importance of speeding up copper retirements (see 2501240058). “Outdated regulations that force telecommunications providers to maintain decades-old copper phone lines are a prime target for common-sense reform,” the group said.

AT&T projects $22 billion in investment this year in its network. Accordingly, Stankey called on Congress to move quickly to renew tax cuts from the first Trump administration (see 2412100069). “If the new Trump administration is successful in extending expiring tax incentives this year, we feel there's ample opportunity for even more investment in U.S. communications infrastructure."

As Verizon CEO Hans Vestberg did during his company’s earnings call Friday (see 2501240049), Stankey expressed sympathy for those struggling with the Southern California wildfires. “I'd like to thank our teams for their commitment to keeping customers, communities and first responders connected in the face of this historic devastation.”

Among other numbers posted Monday, AT&T had consolidated revenue of $32.3 billion in Q4, versus $32 billion in the same quarter a year ago, with profits of $4.4 billion, up from $2.6 billion a year earlier. AT&T spent $20.3 billion on its network last year, compared with $17.9 billion in 2023. And it passed 28.9 million consumer and business locations with fiber during the year.

The biggest negative was business wireline revenue, which declined 10% year over year, to $4.5 billion, “primarily due to lower demand for legacy voice and data services as well as product simplification, partially offset by growth in connectivity services." Free cash flow was $4.8 billion versus $6.4 billion in the year-earlier quarter as the company "continued to drive a more ratable quarterly free cash flow cadence.” But consumer wireline revenue increased 3.4% to $3.5 billion, driven by fiber revenue.

FirstNet connections grew to 6.7 million, across more than 29,000 agencies, with 175 apps in the FirstNet catalog and 885 FirstNet-ready devices on the market.

“Mobility results were reasonably good, meeting both subscriber and financial expectations,” MoffettNathanson’s Craig Moffett told investors. “Consumer wireline results were better still, with revenue growth and margins both ticking higher,” he said: “Business wireline results were awful, with a crushing drop in margins.”

Investors appeared pleased. AT&T’s stock price rose 6.27% on Monday to close at $24.14.