AT&T eyes nearly $48 bln network investment in post-media company

AT&T Inc (T.N) expects to invest about $48 billion through the end of 2023 to expand its fiber internet and 5G wireless services, the U.S. wireless carrier said on Friday, as it detailed the vision for the business after unwinding its media assets.

After facing skepticism from shareholders over its expensive quest to become a media and entertainment company, AT&T is working to merge its WarnerMedia unit with Discovery Inc (DISCA.O) in a deal that is expected to close in the second quarter. The company plans to refocus on its core business of offering internet and phone services.

“Now that the close of the WarnerMedia deal is approaching, we are near the starting line of a new era for AT&T,” said AT&T Chief Executive John Stankey, in a press release ahead of a presentation to analysts on Friday.

Shares of AT&T rose over 3% to $24.09 in pre-market trading.

AT&T said it expects annual capital investment to be in the $24 billion range both this year and in 2023. It will then taper to the $20 billion range beginning in 2024.

The company is working to double its fiber internet availability to 30 million homes in the United States and expand its 5G network to cover over 200 million people.

AT&T on Friday also provided full-year financial guidance that excludes the WarnerMedia business and advertising unit Xandr, which AT&T agreed to sell to Microsoft in December.

The company said it expects low single-digit percentage growth for total revenue in 2022, unchanged from its previous outlook.

It also provided an outlook for 2023 for the first time, with continued low single-digit percentage revenue growth and adjusted earnings per share between $2.50 to $2.60.

After closing the WarnerMedia and Discovery deal, the company expects to pay just over $8 billion in annual total dividends, AT&T said.

Free cash flow for the standalone AT&T is expected to be in the $16 billion range this year and in the $20 billion range in 2023. Reuters