AT&T 2Q15 Earnings Call Notes

2.1m new subs, 410k postpaid and 1.4m connected devices

“Total net adds came in at 2.1 million subscribers, including 410,000 postpaid subscribers and 1.4 million connected devices. Cricket is really kicking in the gear. Prepaid voice had a strong turnaround year from a year ago. We gained more than 330,000 prepaid voice customers after losing about that many in the year ago quarter.”

Connected car driving connected device growth

“We also had our second largest connected device net add quarter ever. Our leadership in connected cars drove that growth. Our relationship with eight car manufacturers producing more than half of the new connected cars in the United States is driving this as more and more manufacturers make connectivity a key part of their new car strategies. ”

Paying out 55% of FCF as dividends

“Free cash flow was $4.5 billion and $7.2 billion year-to-date. We are well on our way to hitting our standalone free cash flow guidance we gave you earlier this year. We now expect standalone free cash flow, excluding any impact from DIRECTV in the $12 billion range or better and this includes the operational and capital impacts from our Mexican acquisitions. In terms of uses of cash, dividends totaled $2.4 billion, which gives us a free cash flow to dividend payout ratio of 55% for the quarter and about 67% year-to-date.”

We are watching our competitors’ moves. It’s competitive, but we’re not respond to every one

“let me just say it this way. We are certainly evaluating and watching our competitor’s moves in the marketplace. What I would tell you is that we are not responding to each and everyone from a discounting program. We have shown that kind of discipline. We have responded with – with an effort to make customer care easier, customer service easier, customer data situations, like rollover data, where we can meet some of the customers’ pain points and satisfy them. And we have done a great job in providing value customer solution with our prepaid brand. Those are the kinds of things we are going to do and continue to do.”

“yes, it’s a competitive market, it continues to be noisy, a competitive market, but it’s been that way for sometime and I wouldn’t expect necessarily to change. But I do like our ability to compete with the tools that we have that are different than our competitors. ”

AT&T is securitizing something (SK: I’m going to have to do more research into this)

“So, with regard to securitization, Simon, we did do some this quarter. They were about $1 billion this quarter and we did about $800 million in the year ago quarter, so a slight increase in the securitizations, I am assuming you are talking about the net securitizations, continue to see strong demand, continue to see a real interest in that investment by a number of banks at very attractive rates.”

Continue to see large data growth per handset

Yes, we continue to see data growth per handset to be significant. And it’s been running at kind of the 50% year-over-year increase for a while. With regard to the data plans, we are seeing customers a couple of things. We continue to see customers go to bigger data plan, some of the 20 gig and bigger plans. “