AT&T at JP Morgan Conference Notes

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We were sub-scale in TV

“if you think about where we are today, nationwide mobility business. We have a TV business that probably characterizes subscale. It’s a spotty footprint around the United States, have a lot of success with it, but its kind of hard to integrate with a nationwide wireless business. We have a broadband footprint that covers 57 million homes and there’s a pretty good overlap with the TV market, but not perfect.

When we close DIRECTV we’re going to have a very different look and feel for the business. And that is we are going to have this nationwide wireless footprint, nationwide retail distribution. It is a best-in-class retail distribution. A high-quality, high-end retail distribution presence nationwide with a nationwide TV platform, a nationwide TV product.”

DirecTV acquisition will improve go to market effort and installation and service costs

“The same thing is going to happen with DIRECTV, us trying to sell their product versus them trying to sell our broadband product. The product development is never integrated. Leveraging the content across different platforms is really kludgy and hard to do.

Once this transaction closes all of that gets consolidated. The sales function gets consolidated, the retail presence gets consolidated, product development gets consolidated. You have a very different look and feel.

And you have one truck roll. Today somebody buys DIRECTV in our broadband a couple of truck rolls. One truck roll, one customer interface, one customer interface for care, it’s just a whole different game when you put the two together.”

We bought DTV making the assumption that cord cutting would continue

“as we were evaluating DIRECTV, and obviously we modeled it nine ways to Sunday and as we evaluated we made the basic assumption that over the top would continue to develop. And that you would see not only cord cutters but cord nevers I think is how some of you guys have termed that, meaning a lot of millennials may grow up never having a traditional linear TV product.”

The delivery of linear TV is changing. People need to be able to watch the content on whatever screen they want

“what we are really convinced of is that the traditional linear model is about to change in a significant way as well. And what I mean by that is customers are buying these big bundles of content, their traditional linear model, the expectation now exists that they ought to be able to have a content, enjoy that content, watch that content on whatever device they may choose. And so whether it is a smart phone or whether it is a tablet or a laptop, that content needs to be delivered there. We think we’re going to be in a unique position to do that.’

DTV gives the opportunity to make a bigger push into fiber deployment

“when we announced DIRECTV we said because of how DIRECTV will change the economics of the video business, suddenly we go from our video business being a money loser to a money maker and it gives us the ability to push further in fiber deployment. And so we are going to build another 2 million homes with fiber.”

Google changed the game for fiber deployment, because they got cities to buy into allowing partial rollouts

“When Google went into Kansas City and then announced they were going into Austin to change the game for the industry. A change the game in a very peculiar way and that is, to your point, if we wanted to go build out a city with fiber, the requirement was that you go build out the entire city, and it’s not economic to build an entire city with fiber on day one…Google came in and was very targeted in where they deployed fiber. And they got the municipalities not only approval but endorsement to be very targeted in where they deployed fiber.”

We have a high degree of conviction that title II won’t stand

“If I believed the rules that were passed by the FCC on Title II were going to be the rules of the land for the next 5 to 10 years it would have a dramatic impact on how we thought about investment. As we have evaluated the FCC’s order on Title II, we actually are – we actually have a certain degree of conviction that these will not be the rules of the land in the long-term.”

Having success connecting everything

“We’re having a tremendous amount of success in automating and wirelessly interconnecting everything from the manufacturing plant to shipping containers in the Maersk shipping network around the globe, and each of those are new revenue generating and data points for our mobility business.”