AT&T Inc has officially unveiled a multi-year strategic plan, which is highlighted by its continued profitable 5G and fiber subscriber growth.
According to certain reports, the stated plan is designed to help the company achieve enhanced shareholder returns on network investments through a robust and balanced capital allocation program.
Talk about the stated plan on a slightly deeper level, we begin from AT&T’s vision to unlock new capabilities that will build upon its momentum, which has been created over the last four years. You see, during this timeframe, the company has streamlined its operations and centered its business on the customer, enhancing and simplified their experiences with AT&T.
Next up, the company has also expanded its 5G and fiber services to more people and places and is now the largest capital investor across U.S. connectivity infrastructure since 2019.
In terms of mobility, the company will continue building more efficient, high-capacity, programmable and open network. AT&T also expects, by 2027, to largely complete the modernization of its 5G wireless network through open technology, with deep mid-band 5G spectrum covering 300 million+ people by the end of 2026. Once developed, this network will support super-fast download speeds and serve as a platform for new product and GenAI innovation.
As for broadband, AT&T plans on expanding its fiber broadband network, which is already the largest in America. You see, by 2029, it expects to reach 50 million+ total locations with fiber. This includes expectations to pass about 45 million locations through its organic fiber deployment and serve 5 million+ fiber locations through Gigapower, its joint venture with Blackrock, as well as through other agreements with commercial open-access providers.
Upon realizing the stated expansion, AT&T will be able to greatly scale up its opportunity to serve customers how they want to be served, by one provider in a converged manner. While building the network of the future, the company is also set to do away with its legacy copper network operations that are currently spread across the large majority of its wireline footprint. This it aims to do by the end of 2029.
“Over the last four years, we’ve achieved durable and profitable subscriber growth, generated attractive returns on network investment, and strengthened our balance sheet,” said John Stankey, AT&T’s CEO. “We’re putting customers first to become the best connectivity provider in America. Our plan expands the country’s largest fiber network to more than 50 million total locations, modernizes our wireless network and rewards our shareholders. As we grow, we expect to return more than $40 billion to shareholders over the next three years through dividends and share repurchases. With this bold strategy, we are entering a new era of sustained growth.”
Among other things, AT&T hopes to provide $50 billion+ of financial capacity over the next three years, mainly through organic growth. For better context, financial capacity translates to anticipated free cash flow after distributions to non-controlling interests, plus expected cash payments from the announced agreement to sell AT&T’s stake in DIRECTV to TPG, along with net borrowing capacity after the company achieves its net leverage target.
Another $40 billion worth of financial capacity is set to be generated through dividends and share repurchases. To expand upon that, the stated plan spells a maintenance of AT&T’s current annualized common stock dividend of $1.11 per share, resulting in $20 billion+ in total dividend payments, complemented by capacity for about $20 billion in share repurchases, from 2025-2027.
Not just that, under this plan, the company also expects approximately $10 billion in incremental financial flexibility for items, such as potential organic or inorganic strategic growth investments, debt repayment, redemptions of non-controlling interests, or any added dividends or share repurchases.
