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AT&T's Strategic Growth Vision

In an announcement that signals a transformative phase for the telecommunications giant, AT&T Inc. has introduced a comprehensive, multi-year strategic plan aimed at driving sustainable growth while significantly enhancing shareholder value. This initiative will expand America's largest fiber broadband network to over 50 million locations and boost profitability across its services.

Overview of the Strategic Plan

During its 2024 Analyst Investor Day presentation, AT&T disclosed a robust approach to expand its operations, focusing on an impressive fiber-to-the-home connection project that aims to enhance connectivity across the U.S. The CEO John Stankey emphasized that over the last four years, the company has made substantial progress in profitable subscriber growth, generating attractive returns on network investments, and improving its overall financial standing.

AT&T's strategic framework looks to position the company as a customer-first provider of connectivity solutions, as it advances toward its goal of surpassing 50 million fiber broadband connections. This ambitious plan includes a balanced capital allocation approach, which anticipates returns exceeding $40 billion for shareholders over the next three years through dividends and share buybacks.

Investment and Growth Projections

Key components of the plan involve substantial investments in modernizing its 5G wireless network and fiber broadband infrastructure. By the end of 2026, AT&T intends to complete the modernization of its 5G network, incorporating open technology and mid-band spectrum that will support ultra-fast download speeds for a population exceeding 300 million.

In broadband services, AT&T is set to extend its fiber network well beyond its current capabilities, aiming to pass about 45 million additional locations organically and serve over 5 million locations in partnership with its joint venture, Gigapower. These efforts will strategically enable the company to deliver converged services to both residential and commercial customers, enhancing their overall experience.

Long-term Financial Outlook

Underlying AT&T’s strategy is a growth forecast that anticipates consolidated service revenue to increase in the low single digits annually between 2025 and 2027. Meanwhile, mobility service revenue is projected to rise by 2% to 3%, and consumer fiber broadband revenues are expected to expand at a mid-teen percentage rate.

Adjusted EBITDA is also targeted to grow by approximately 3% or better annually during this period, reflecting AT&T’s commitment to financial sustainability. Furthermore, the company is planning for capital investments in the range of $22 billion annually from 2025 to 2027, ensuring that resources are allocated to foster growth.

Enhancing Shareholder Returns

AT&T is committed to returning more than $40 billion to shareholders, which is a critical element of its long-term outlook. The capital allocation plan anticipates maintaining its annual common stock dividend at $1.11 per share, leading to approximately $20 billion in dividend payments alongside a projected $20 billion for share repurchase initiatives over the next three years.

For 2024, AT&T projects a growth trajectory for wireless service revenue in the vicinity of 3% and broadband revenue growth exceeding 7%. Adjusted EBITDA is also expected to advance by about 3%. Overall, these strategies indicate a robust and confident outlook for the telecommunications leader.

Conclusion

AT&T is forging ahead with a detailed plan that aligns with both current market demands and future customer expectations. The company aims to strengthen its connectivity infrastructure, elevate customer experiences, and enhance shareholder returns. This bold strategy places AT&T in a promising position as it navigates through the evolving telecommunications landscape, anticipating sustained growth that benefits its clientele and investors alike. AT&T’s management looks forward to sharing more insights during today’s webcast, where they will detail the vision for this exciting journey ahead.