AT&T Inc. COO Jeff McElfresh Discusses Strategic Goals and Market Position at JPMorgan Global Technology, Media and Communications Conference 2025

Key Takeaways

TL;DR Summary: AT&T reaffirmed 2025 guidance (+3% EBITDA growth, $3B LT cost savings by 2027, $4.5B-$5B Q2 CapEx) and convergence strategy (fiber + wireless synergy) to drive LT margin expansion. Critical updates: Fiber passings to hit 50M by 2029 (ahead of pace on 30M target), share buybacks to start in 2025, and fixed wireless (Internet Air) as a tactical tool to monetize network upgrades. Expect consumers to absorb device tariff impacts; minimal near-term EPS risk. Business Wireline shows early turnaround signs with fiber migration.

1. Financial Targets & Execution

• 2025 Guidance Reiterated: Confirmed +3% EBITDA growth and $3B cost savings by 2027. Q2 CapEx to reach $4.5B-$5B, generating ~$4B in cash.
• Share Buybacks: Program to begin in 2025 as part of capital return plan.
• Tariff Impact Mitigated: Majority of CapEx is labor-driven (~65-70%). Device tariff risks to consumers (via higher prices) rather than AT&T’s margins. Supply chain "sufficiently resilient" for 2025.

2. Network Strategy & Convergence

• 5G + Fiber Synergy: Focus on lowest marginal cost per byte via converged traffic. Wireless modernization with Ericsson’s Open RAN ~50% complete.
• Key Metrics:
  • 50% fiber penetration and 50% converged household adoption as LT targets.
  • Converged customers have ~2x LTV vs. standalone.
  • Fixed Wireless (Internet Air): Used as a bridge in areas pending fiber rollout.

3. Fiber Expansion

• 50M Passings by 2029: On track, with 3M annual builds (equivalent to NY-to-LA fiber length monthly). Current passings at ~28M (vs. 30M target for mid-2025).
• Economics: Fiber homes deliver ~$60 ARPU with lower churn (1-1.2%) and 30%+ EBITDA margins.
• Partnerships (e.g., Gigapower JV) to add incremental 5M+ locations.

4. Customer-Centric Initiatives

• AT&T Guarantee: Triple focus on network quality, transparent pricing, and service reliability. Resulted in record-low churn (Consumer Wireless: 0.72% in Q1 2025).
• Wireless Priorities: Focus on service revenue/share gains over net adds. Mobility EBITDA margins improved +130bps YoY despite flat gross adds.

5. Business Segments