AT&T Expects to Complete 60% of FirstNet Buildout by End of Q3
Thursday, April 25, 2019 | Comments

AT&T expects to reach 60 percent completion of the First Responder Network Authority (FirstNet) buildout by the end of the third quarter, said AT&T Chief Financial Officer (CFO) John Stephens.

The buildout is at 53 percent completion, Stephens said during an April 24 conference call about AT&T’s financial results for the first quarter of 2019. The next buildout milestone in AT&T’s contract with FirstNet is 60%, which will trigger another reimbursement payment from FirstNet. AT&T received $1.4 billion in reimbursements from FirstNet in 2018.

“Today our FirstNet build has now passed the halfway mark and is now running well ahead of schedule,” AT&T CEO Randall Stephenson said during the call.

So far, AT&T has signed up more than 7,000 agencies, totaling more than 570,000 subscribers, for FirstNet service, Stephenson said.

Additionally, AT&T is attracting more FirstNet customers who were not previously AT&T customers, Stephens said. During a conference in March, Stephens said that a majority of FirstNet customers were former AT&T customers.

AT&T’s FirstNet program has helped spur growth for the company’s overall wireless business, Stephens and Stephenson said. As part of its FirstNet marketing, AT&T released offers for families of FirstNet users, and Stephenson estimated that for every first responder subscriber, AT&T is getting two family subscribers.

Another advantage of the FirstNet buildout has been the requirements to provide rural coverage milestones, which has increased AT&T’s reach.

“These are rural communities that have had one option for many years,” Stephenson said. “And, we’re having a lot of success, as we move into these smaller communities and set up distribution, in taking market share.”

For the first quarter, AT&T reported consolidated revenues of $44.8 billion, compared with $38 billion in the year-ago quarter. Much of that growth was attributable to the company’s acquisition of Time Warner. Operating expenses were $37.6 billion, compared to $31.8 billion, with much of the increase coming from the Timer Warner acquisition.

Operating income for the quarter was $7.2 billion compared with $6.2 billion for the previous year’s quarter. When adjusting for amortization-, merger- and integration-related expenses and other items, operating income was $9.6 billion, compared with $7.5 billion for the previous year’s quarter.

Cash from operating activities was $11.1 billion, and capital expenditures were $5.2 billion. Capital investment, which consists of capital expenditures plus cash payments for vendor financing, totaled $6 billion, including $800 million in cash payments for vendor financing. Free cashflow for the quarter was $5.9 billion.

Wireless service revenue saw a 2.9 percent increase from $13.4 billion in the first quarter of 2018 to $13.7 billion in the first quarter of 2019. The company saw 179,000 postpaid smartphone net adds in the U.S., with 80,000 postpaid phone net adds. The company also saw 96,000 prepaid net adds, with 85,000 of them phones.

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