Sunday, 26 February 2017

AT&T chief talks up Trumponomics as Q4 revenue stays flat

By Nick Wood, Total Telecom
Thursday 26 January 17

Randall Stephenson 'impressed' after meeting new U.S. president; confident that Time Warner deal will go ahead.

AT&T CEO Randall Stephenson late on Wednesday talked up new U.S. president Donald Trump's economic plans and said he was confident the telco's $85.4 billion (€78.4 billion) acquisition of Time Warner will be approved. On the AT&T's quarterly investor call, Stephenson revealed he met with Trump when he was president…

AT&T CEO Randall Stephenson late on Wednesday talked up new U.S. president Donald Trump's economic plans and said he was confident the telco's $85.4 billion (€78.4 billion) acquisition of Time Warner will be approved.

On the AT&T's quarterly investor call, Stephenson revealed he met with Trump when he was president-elect.

"I was impressed," Stephenson said. He said the president had a "very specific agenda…and that was tax reform and regulatory reform."

Trump has pledged to cut corporate taxes in a bid to stimulate investment in the U.S. He has also nominated Republican FCC commissioner and critic of net neutrality rules Ajit Pai as the new chairman of the telco regulator.

Cutting taxes will have a "stimulative effect" on growth, Stephenson said, which would enable AT&T to increase investment levels.

"There are things we would like to accelerate if we had a more favourable tax environment," he said.

As for Pai, Stephenson said "he obviously was not a fan" of regulating net neutrality under Title II of the Communications Act, claiming that Pai believed the FCC had gone too far.

"We're hopeful that chairman Pai will come in and begin to address some of these issues," he said.

With a president and FCC chair that favour a light-touch approach to regulation, Stephenson said AT&T "remains confident that the deal will be approved later this year."

The comments were made after AT&T reported fourth quarter revenue of $41.84 billion (€39.14 billion), down slightly from $42.12 billion a year ago.

Net income fell to $2.44 billion from $4.01 billion; AT&T revealed earlier this week it took a $1 billion charge due to a reassessment of its pension and benefits obligations.

AT&T added 2.8 million mobile customers during the quarter, 1.3 million of them in Mexico. Its U.S. operation added 1.1 million branded smartphone subscriptions. Its mobile video streaming service DirecTV Now got off to a strong start, Stephenson said, signing up 200,000 paying customers in its first few months.

For 2017, AT&T expects low single-digit revenue growth, capital expenditure of around $22 billion, and free cash flow of approximately $18 billion.

Stephenson explained on the investor call that his optimistic opinion of Trump's tax and regulation plans is not factored into AT&T's guidance.

"Our outlook is based on what we know today," he said.

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