The past year has shown us how critical high speed, reliable connectivity is in our lives. In fact, AT&T expects data usage on the AT&T network to quadruple over the next five years.
Numbers like this only reinforce the need for investment in our local neighborhoods to prepare us for this growth. It all starts in Georgia as we prepare for that growth.
Fiber – We are expanding our network to provide broadband internet service via fiber to more than 3 million residential and business locations in more than 90 metro areas.
5G- We are bringing AT&T’s 5G network to more consumers, businesses and first responders as part of our 5G wireless strategy. AND, starting this month, good news for unlimited plan customers – 5G is now included at no additional cost.
HBO Max international expansion and AVOD launch in June. AT&T expects to launch HBO Max in 60 markets outside the United States in 2021 (39 territories in Latin America and the Caribbean in late June and 21 territories in Europe in the second half of 2021). Also in June, the company expects to launch in the U.S. market an advertising-supported (AVOD) version of HBO Max.
3 million new fiber locations. In 2021, AT&T plans to increase its fiber footprint by an additional 3 million customer locations across more than 90 metro areas.
C-band spectrum deployment to begin in 2021. AT&T acquired 80 MHz of C-band spectrum in the FCC’s Spectrum Auction 107. The company plans to begin deploying the first 40 MHz of this spectrum by the end of 2021. AT&T expects to spend $6-8 billion in capex deploying C-band spectrum, with the vast majority of the spend occurring from 2022 to 2024. Expected C-band deployment costs are already included in the company’s 2021 capex guidance and in its leverage ratio target for 2024.
Funding C-band spectrum. AT&T’s investment in C-band spectrum via Auction 107 totals $27.4 billion, including expected payments of $23 billion in 2021.
To meet this commitment and other near-term priorities, in 2021 the company expects to have access to cash totaling at least $30 billion, including cash on hand at the end of 2020 of $9.7 billion, commercial paper issued in January 2021 of $6.1 billion and financing via a term loan credit agreement of $14.7 billion.
End-of-year 2021 debt ratio target of 3.0x. The company expects to end 2021 with a net debt-to-adjusted EBITDA ratio of about 3.0x,3 reflecting an anticipated increase in net debt of about $6 billion to fund the C-band spectrum purchase.
2024 debt ratio of 2.5x or lower. During 2024, AT&T expects to reach a net debt-to-adjusted EBITDA ratio of 2.5x or lower. To achieve this target, the company expects to use all cash flows after total dividends to pay down debt and will continue to look for opportunities to monetize non-strategic assets. The company also does not plan to repurchase shares during this period.
AT&T’s 2021 financial guidance, announced in January 2021, is unchanged on a comparative basis. For the full year, the company continues to expect:
Consolidated revenue growth in the 1% range
Adjusted EPS to be stable with 20204,
Gross capital investment6 in the $21 billion range, with capital expenditures in the $18 billion range
2021 free cash flow7 in the $26 billion range, with a full-year total dividend payout ratio in the high 50’s% range.
“We’re being deliberate and strategic with how we allocate capital to invest in our market focus areas of 5G, fiber and HBO Max, while being committed to sustaining the dividend at current levels and utilizing cash after dividends to reduce debt,” said John Stankey, AT&T CEO.
“Our number one priority in 2021 is growing our customer relationships. It’s about more than just adding to our customer base. It’s about expanding the growth opportunity in our three market focus areas and also increasing our share within each market,” Stankey said. “We’re focused on creating deeper relationships with our current customers to increase their daily engagement with our products and services, enabling us to gather more meaningful insights, drive loyalty, and stay ahead of their rapidly changing preferences.”