AT&T today announced that following the combination between WarnerMedia and Discovery, the company will pursue an increased capital investment strategy into 5G C-band PoPs and fiber broadband. In doing so, AT&T projects capital expenditures of ~$24bn annually, following completion of the WarnerMedia and Discovery transaction. Specifically, AT&T expects the WarnerMedia and Discovery transaction will close in mid-2022, enabling its 5G and fiber investments.

5G C-band Network – AT&T

AT&T projects that its 5G C-band network will cover 200 million points-of-presence (PoPs) in the U.S. by year-end 2023. Below is AT&T’s prior guidance from its Analyst & Investor Day in mid-March 2021:

Prior Targets – Analyst & Investor Day

By year-end 2022, AT&T was intending to cover 70 to 75 million PoPs with C-band. Additionally, by early 2023, AT&T was projecting it would reach 100 million PoPs with C-band.

C-band Spectrum Holdings

AT&T acquired 80 MHz of national average C-band spectrum depth in the FCC’s Auction 107. Importantly, the company plans to begin deploying the first 40 MHz of A-Block spectrum, which will clear earlier, by the end of 2021.

Fiber Broadband – AT&T

AT&T plans to expand its fiber broadband footprint to cover 30 million customer locations by year-end 2025. Indeed, this represents a doubling of the company’s current fiber footprint of ~15 million customer locations. Therefore, AT&T’s implied fiber build pacing equates to 3 million customer locations per year.

Overall, the growth of AT&T’s fiber footprint will derive from both legacy copper network upgrades and greenfield fiber builds. Additionally, AT&T is targeting both residential and commercial customers with its fiber broadband offering.

AT&T notes that it expects internal rate of returns (IRRs) on its fiber investment to be in the “mid-teens”. AT&T also re-iterated its prior fiber broadband guidance from its Analyst & Investor Day:

Prior Targets – Analyst & Investor Day

In 2021, AT&T plans to increase its fiber broadband footprint by an additional 3 million customer locations. Moreover, the company will accelerate its target in 2022, to cover 4 million additional customer locations with fiber, during the year.

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