AT&T Inc. (NYSE:T) Q2 2023 Earnings Call Transcript

John Hodulik: Great. Thank you. Yes, maybe a follow-up to Brett’s question. John, on wireless competition, it looks like gross adds are down sort of mid-teens. And I realize you said that a lot of the change in the sub growth is due to customer loss you had in the second quarter. But do you feel you need to respond from either promotion standpoint to sort of drive gross adds back up? I mean — and sort of anything you can point to for sort of why you’re losing share in terms of those gross adds? And then along with that, a number of your competitors or both of your competitors have announced recent price increases. If you could just comment on the sort of broader pricing environment in wireless? And do you believe that you have room to take similar pricing action as we move through the year?

John Stankey: So John, good morning. I don’t see a need for us to — if it wasn’t clear from my last comment. There was a little bit of shift that occurred in the second quarter. Part of it was new account, part of it was new offers in the market. We’ve seen a normalization. And we think what we have out in the market is performing very well. And I go back to comments I’ve made repetitively in previous quarters. We’ve been very focused segment wise around where we’re choosing to get our activity. And I don’t know that broad promotions is necessarily been the primary or by any means, the exclusive means of us getting customers. We’ve been really deliberate. You look at some of our business results, we just shared with you some of our FirstNet growth.

We know the channel is in the consumer market that we can go to to intercept the right kind of traffic. And we’ve seen really good results as we’ve kind of gotten into the early part of the second quarter relative to that. So I feel like the market is healthy, I feel like our tactics continue to be durable and they’re performing well. We have been very focused on insuring that we’re getting the right kind of growth. I don’t want empty calorie growth. We want customers to come in and pay good recurring rates that are going to stay with us a long period of time. We have opportunities where we can co-market multiple products into a customer, which makes them even stickier and drives up lifetime values. Those are all very right places for us to go spend time and energy, and we feel very comfortable about that.

So I don’t feel a need, when you say a need to respond, you’re not going to see some dramatic shift in our approach or what we’re messaging or how we’re going about things. On the pricing side, I think as you know, I’ve been very deliberate. We don’t pre announce any pricing and we don’t really talk publicly about changes. But there have been, as I said earlier, I think a lot of efforts in the industry by everybody to ensure that they’re getting returns on the level of investments that they’re making back into their networks and their business. And you’re well aware of what we’ve done in the past. And we’ve been really successful and really deliberate and really calculated in how we’ve done that. That’s how we’ve managed to keep our churn at the levels that we have, while at the same time continuing to get some ARPU accretion in our business.

I think you should expect that we’re capable in managing the large subscriber base that we have and we look for opportunities to alter that value equation back to the customer where they perceive that they’re getting a better value and better service and something more and it accretes into the business in terms of us being able to grow ARPUs. And we certainly have [indiscernible] we’ll do that. We do that as a normal course. Sometimes those moves are a little bit more obvious to you. Sometimes they’re a little less. But we’ll continue to manage the business effectively moving forward and feel really comfortable about our growth characterizations that we’ve given you in our guidance and what we’re going to see in accretion and service revenues.