Hey clients only, welcome back to Citi's 2025 Global TMT Conference. For those of you I haven't met, I'm Mike Rollins and I cover communication services and infrastructure for Citi. We have disclosures that are available at the back of the room, and if you don't have access or would like another copy, please email me at michael.rowlins@citi.com. We're pleased to welcome back Jen Robertson, EVP and GM of Mass Markets at AT&T. Jen, thank you so much for joining us today. It's good to be back. Thanks for the invitation. Now, I heard you might also have a disclosure to make as well. We do. Our safe harbor statement I would refer everyone to, and it's available on our AT&T Investor Relations website. Great. We got that now taken care of, and maybe we'll just jump right in. You know, Jen, maybe it'll be just helpful to remind our audience that's here today, the customer verticals and the products that you're focusing on within your role. Okay, sure. AT&T Mass Markets specifically focuses on our mobility business and our consumer wireline business. That would be our 5G wireless products and our fiber and AT&T Internet Air, that is our fixed wireless products serving consumers in their homes. Great. Maybe we'll jump right into the announcement from last week. AT&T announced the acquisition of spectrum from EchoStar. If you could just take a few minutes and walk us through the overall opportunity that you're seeing across the mass market that you're responsible for in terms of what the spectrum can do for AT&T and your customers. Last week was an exciting time for us. It was a great opportunity for AT&T to stick with our strategy of being a connectivity leader to provide the best broadband connectivity. We asserted that with the $23 billion purchase of EchoStar's 3.45 GHz spectrum and the 600 MHz spectrum. With that, we are able to, both in the near term, accelerate our growth strategy and provide for the long-term future of providing connectivity services across IoT and what we anticipate will be future workloads in the AI space. In the near term, Mike, as you mentioned, the mass market space will benefit from this spectrum very quickly. The 3.45 GHz spectrum is a spectrum that we can deploy within our network as soon as we get regulatory approval. We have set this deal up such that we can pre-lease it and deploy it with a very fast software upgrade and essentially start using it right away. That will enable us to put it in use cases for three purposes, is how I would set it up. The first is that we can lean into fixed wireless outside of our footprint, and that allows us to compete for price-sensitive customers with fixed wireless and a plus wireless converged play. That's a space we've known that we can grow, share in wireless, and compete for a segment we are underpenetrated in. The second is that it allows us to accelerate our legacy decommissioning project. That is inside of our footprint, the work that we are doing to lower our cost structure and pull our legacy infrastructure out of the network. Moving these customers onto fixed wireless gives us another converged play where we don't already have them on our wireless products. Lastly, in our footprint where we are building fiber, fixed wireless with this capacity on 3.45 GHz spectrum allows us to put customers on fixed wireless as a product, pair it with wireless, and anchor that household while we are building fiber to those households. It's a bridge to future fiber, anchor the home, migrate those customers to fiber in the future, and grow the relationship to an even more valuable one in the future. There are near-term accretive moves that we can make with this spectrum that make it very valuable to us in mass markets. There's a long-term play that sets us up for future workloads well, well into the next decade. Maybe just to drill into this for a moment. The way I think people have been thinking a little bit about convergence has been, okay, where you have fiber and, of course, you're nationally mobile, you have that advantage. Earlier, maybe last year, you were a little bit more, as a company, hesitant or restrained in the way that you're approaching FWA. Does this really cement a national convergence strategy for AT&T? What it does for us is it allows us to lean into fiber first, which remains our strategy. We talk about this deal from last week. It shouldn't be lost that we've also, in parallel, announced that by the end of the decade, we'll now be at over 60 million homes with fiber. That very quickly becomes a massive scaled fiber network. With this spectrum, we have quite a bit of capacity to go fixed wireless. I would say we have a national ability to go wireless and to be an AT&T Internet provider nationally. It does open up the door for us to go out and advertise and be a household name nationally for internet connectivity, pair wireless with it, and we can go aggressively pursue those customers converged, no matter where you are. One more on this. We were talking about the 3.45 GHz spectrum. What about the 600 MHz spectrum? How does that help AT&T and your customers? We are very pleased with the spectrum that we picked up last week. What I would tell you is that is valuable low- band spectrum. Low- band spectrum is always good to have. We're in a good position today, and that sets us up, as I said earlier, for the future. When we look forward, we certainly see a need for IoT use cases. AI use cases will continue to put demand into the network. We see, beyond the next couple of years where we have opportunity for fixed wireless, well into the future, a need for continued low- band capacity. When we were looking at the deal, it was twofold. Is it accretive now? Does it set us up for potential future capacity needs? Very helpful. Moving over to the mobility segment, how does AT&T differentiate your postpaid phone go-to-market strategy to continue to grow subs on an annual basis? First and foremost, it is our converged strategy. We look at this and say we have opportunity to grow at two ends of the spectrum. We have opportunity with our high-end customers, and converged is what differentiates us at scale. The other thing that differentiates us is the ability to come out with ownership of both networks and to be able to guarantee our service. When we look at what customers value most, and that's how we center all of our moves, what customers value most is network connectivity that they can rely on. It has to be connectivity that they depend on no matter where they are. They want to be connected everywhere. Having ownership of both networks, being able to do that no matter where they are and guarantee it is something that is relevant and that provides customers demand for choice. They consider this most when they choose a provider and when they stay with a provider. Nearly 80% of customers say they want that connectivity, both wireless and broadband at home from the same provider. That differentiates us. The second is to value customers and provide deals that matter to them. It doesn't have to be deals that are one-offs or perks that are one-offs. I say we're not going to bring you donuts, but we're going to bring you connectivity and perks that are relevant to your connectivity. The third thing is service and experiences that they deserve. We've come out with the AT&T guarantee this year saying we aren't going to make you worry about it. We aren't going to make you worry about calling us. We will actually proactively come to you. In the occasions where we don't get it right, because nobody's perfect and we aren't going to get it right every time, we will make it right. The burden is not on you as the customer. Those three things and the ability to do that across a fiber network and a wireless network differentiate us. The ability to grow customers is we know that attracts customers in consideration. We know it keeps customers, and we're the only one that can do it at scale across both networks. In the past, AT&T has talked about the measurable benefits of best deals for everyone. Is this service commitment that you're now giving customers also something that you see as a measurable benefit to customer lifetime value? We do know that convergence is a measurable benefit. We know that the guarantee is lifting customer satisfaction. We know that when we make it right, customers are more satisfied. Even when something goes wrong, they are more satisfied after the fact than they were before. The first half of the year saw a real significant and, I think for practical purposes, an unexpected increase in the switcher pool. What are you seeing now in terms of the switcher pool, and any thoughts on how it plays out for the balance of the year? You know, the first half of the year certainly was competitive. We talked about that in our second quarter earnings. I like how we played the first half of the year. We came out in really good shape. It was one of those moments where we knew we had the offers, we knew we were bringing in customers of high value, and we demonstrated we were willing to compete for those. When we compete, we win. Where we have fiber, we win. Where we bring the right offers to customers, we win. We are able to market those the right way and have the distribution in place to get those customers into AT&T. While it was competitive in the first half, I feel like we really showed what we can do. We said in our second quarter earnings call that we had in our plan and in our outlook that the second half would be just as competitive. I would tell you that as we're 2/3 of the way through the third quarter, it's playing out as we anticipated. No surprises so far. We're two-thirds of the way in and the peak competitiveness comes towards us or the seasonality is coming at us with respect to, obviously, it always happens as new devices launch and as we go into the holiday season. The rest of the year is in front of us, but no surprises so far. We like how we're positioned. It feels like this time of year we start thinking about the next year. One of your competitors mentioned the possibility that industry growth slows down, impacts from immigration, maybe some maturation of the business market. What are your early indicators on what industry growth looks like and how that impacts AT&T? We've consistently said, and we said coming into this year, that the industry is healthy, it is growing, but that the growth rate would moderate post-COVID and post the expansion of age groups that were getting devices and so forth. Coming into this year, we had built into our plan that immigration would have an impact and knew that was into our outlook for the year. What I would tell you with respect to the industry number itself and with respect to AT&T's position in it, I think if you're the market share leader, you're really worried about how much the industry is going to grow. That number matters because that's where you go seek your growth. When you're in third place and you can disrupt, you're not real worried about the industry growth number because growth is where you're going to take it from. That's the beauty of where we're positioned. It's even better when you're sitting on the assets that we have. I like where we are, and I'm not too focused on the industry number. What I'm focused on is we have the network assets that we've just amassed and what we have in front of us. We have a converged, differentiated play. We have the distribution and the offers and the trust of customers that we've built. There is literally no structural reason across our spectrum and across our wired assets that we can't go compete and take share. We've positioned our teams to know they can win. Industry number or not, I like where AT&T sits. Just maybe going back to the switcher pool, how much of this larger switcher pool contributed to the increase in first-half churn relative to other factors that may have been responsible for that? You mentioned that things are kind of moving on track for the second half. Can you remind us what you're planning for in terms of churn for the back half of the year? We had indicated that we expected churn to again hold steady through the second half of the year from our first-half levels, and it would then follow predictable seasonality. What we saw in the first half of the year, obviously impacting AT&T specifically, was that we came into the year, exited last year, and came into this year with actually a higher number of customers eligible for our contract roll-off. We are at that rate where our customers rolling off of our device promotional rates was at the peak and was coming into the first half of this year that impacted some of our churn levels. We said in our second quarter earnings we expected that we would stay at the rates we were at and that we would then predict seasonality going through the second half of the year. We're still on that outlook and haven't changed our expectations there. Other than that, we're not seeing any change in consumer behavior that would indicate broader macro issues. I know there's a lot of talk around the industry, around pricing actions and other things that might be impacting consumer churn. From the pricing actions that we have taken, we are able to stay within our guidelines and expectations. I think that has a lot more to do with how we take our actions, how we treat our customers for it, and the fact that we've been able to very much target those and haven't taken recent actions. I just feel like we exchange the value with customers the right way. On the competitive side of the equation, any changes there that you're seeing or that investors should be mindful of, including the cable companies kind of leaning further into their converged promos? I know cable's talking about that. We heard the message in the second quarter. We've been competing with cable for a decade. I like where we're positioned there as well. We're holding our own. Where we have fiber, we win, and that's, I think, our best competitive advantage against cable. We continue to add wireless customers with fiber, so that certainly bodes in our favor there. The addition of fixed wireless gives us another tool to compete outside of our fiber footprint. I like that advantage that comes in our direction as well. I haven't seen an impact yet from any of the offers that have come out. I want to get to FWA in a few moments. Maybe just kind of zooming out a little bit to overall mobility service revenue, you talked about the opportunity to sustain subscriber growth. Do you also see the opportunities to sustain mobility service revenue growth? Maybe you could share some of the key drivers. It's probably worth noting that your mobility business, unlike your competitors, doesn't include fixed wireless, which we're going to get to in a moment. Yours is more of a pure mobile. Pure mobile revenue. Yeah. To be clear, we have said consistently measure of success for us in mobility is service revenue growth. I think it's tough to do an apples-to-apples net add or volume growth just because our net add growth also doesn't include other kind of lower quality subscriber growth. We don't include prepaid to postpaid migrations as an example when we report net add growth. That would be a difference in our comparison, similar to service revenue growth doesn't include fixed wireless. Service revenue growth, we certainly see opportunity there. We look at opportunity not just in subscriber growth. We look at it as other additional products that we can add on. We have a healthy insurance business. We have healthy upgrade programs that customers sign up for, like our Next Up products. We have additional products like our International Day Pass, our recently launched Cruise Pass. We have our Turbo product. A lot of additional features that customers choose because it benefits their connectivity services. That provides additional revenue on top of the service rate plan. As customers choose to move up in their rate plan mix, it provides revenue growth opportunity. Even as we look towards adding subscribers, maybe in our underpenetrated segments, like a price-sensitive segment that we certainly have opportunity to grow subscribers in, we can bring subscribers in lower in plans and move them up over time or add products and provide revenue growth potential. I think just the history of this business for a while was that ARPUs could be deflationary in nature. You mentioned the up-tiering opportunity that you have. The question is, is this mobility category broadly maturing into a place where up-tiering and annual pricing actions just become more customary, like we've seen whether it's in cable video or just the larger broadband business? I think that customers really expect a value exchange that benefits them. We've been on this journey. We've talked about it quite a bit. We've been on a five-year journey that is customer-centered, and the company has pivoted towards that. It is driven by customer research and what matters to them. Our value proposition is truly centered on what is the value we bring to customers, and that is our network connectivity and our experience. I come back to the network connectivity first and foremost has to be reliable. That's what customers expect. The second is the experiences, whether that is customer service, whether it is the simplicity and the seamlessness of the products they have, or the types of digital experiences, omnichannel experiences on how they experience our products and our transactions with them. That has to be simple, seamless, personalized. When we think about the value we bring to customers, they have to have the belief that that is greater than the price they pay. It doesn't mean they pay the lowest price. It just has to be that they believe that the value they get is worth the price they pay. That centers our belief around where do we have growth in revenue opportunity. That really informs our view on when we provide a premium service, we can charge a premium price. When we are attracting customers in a different cohort or a different segment, we charge less, and the value that's provided has a different mix. It provides an opportunity to grow across the entire spectrum. Maybe just digging deeper into convergence, maybe you can give some more specifics on how convergence is in the market for your customers today. What are the future opportunities to do more with converged offerings? Our converged growth in some ways is just starting, which is so exciting when you think about the fact that we're over 40% today and that we've continued to accelerate our converged rate. I say that it's just starting because we haven't even put the full muscle of marketing behind it. When we look at our fiber converged rate and we look at even our Internet Air fixed wireless converged rate, which is just now starting, as you mentioned, essentially what we've done there is we've had marketing for fiber in areas where only fiber is available. Now 30 million households, but that is in specific markets. For quite a while, it was only kind of in this Swiss cheese build area. We could only market it pretty quietly because we've said the maddest customers for fiber, for AT&T fiber, are the ones who can't get it. That's the loudest complaint we get. From a marketing perspective, we had to be very careful and targeted. For fixed wireless, candidly, we reached a million customers in June. The customers we were selling to were ones that were walking into our stores. It wasn't a broad marketing campaign. The ability for us to launch now an AT&T Internet marketing campaign to get the AT&T brand nationally associated with Internet and to attach wireless to it gives us efficiency in that marketing, makes it much more effective, puts it out there at scale, and provides such a growth opportunity to it that we can really, you know, light the fire and go. That's what makes it really exciting. I think we talked about this last year. On the pricing side of convergence, what's the discount that, if any, that's needed to get this customer to bundle and converge? Is that something that we just need to be mindful of, that there's a cost to the benefit from the lifetime value of lower churn or maybe a lower acquisition cost for the combined products? Right. We do discount at this point. I've said it openly. I think that's the right move to get customers on. There are a few things that I would call out. First and foremost, the value of these customers is that they bring revenue in on our wireless side and our broadband side. That is something that can get lost as we look at the revenue through two different P&Ls when we report externally. We are bringing in revenue on both, and it's the wireless business that gets burdened with the cost of acquisition. That's an important piece to note as you look at our business. That said, the wireless service revenue continues to grow, and we raised guidance on our service revenue. Even as we are growing our converged base with wireless and with a discount, we are bringing in more valuable customers. Our converged customers have a 15% higher LTV because they tend to have more lines, they tend to buy higher internet speeds, and they have lower churn on both products. They stay with us longer. That's what gives us the confidence to invest more to bring them on. We have the opportunity to grow with additional products. The biggest piece is that if we stop at a discount, we've failed. This isn't about just bundling and getting them on the AT&T network. That's step one. We want as many of those customers on the network as possible. It is about truly building converged products and experiences that continue to differentiate because you have both with AT&T. Internet backup, wireless backup is step one. Why is it better to be an AT&T fiber customer and an AT&T wireless customer? Because your Internet never goes down at home. Period. Full stop. That's literally just scratching the surface of what we have on our product roadmaps for why is it better. I would just offer that it's distribution, it's offers, it's marketing that get us into the home, add customers onto the network, but then we've got to go deliver on the product roadmap. Step one, wireless backup. Digging deeper on broadband, with no pun intended there whatsoever, when you think about annual fiber passings, from our side, it's going from, I think, what, two to three million to four million, and then you add another million for the pending acquisition of consumer fiber. You could have five million passings a year. Can that significantly accelerate quarterly broadband net adds for AT&T? We would certainly anticipate, and we've talked about over time, that you would expect fiber net adds to grow as those come in. It's all a factor of the timing of the build. I wouldn't straight line that through, but it is certainly a factor of as the build comes through, you would expect fiber net adds to increase. As we've been talking about the ARPUs and the pricing, you've talked about some of the benefits on revenue growth. Even while converging, the fiber broadband ARPU has been doing very well. Is there anything else specific to unpack in terms of what's helping that and the opportunity to keep improving broadband fiber ARPU? I think there's opportunity on both sides. We remain priced under cable. We have a better product at a lower price. I'd also be sensitive to the broader macroeconomic environment and sensitive to where we want to penetrate in certain segments. We'll come out with different offers. We launched some offers in very targeted spaces today that are lower priced just to simply go after a different segment. Where we have build that is older, more mature, the marginal cost to add a fiber subscriber in a highly penetrated area to get the penetration up is significantly lower. The ability for us to price differently within a broadband area is, candidly, it gives us more optionality as we go through. We have room to grow ARPU there. Yes. Are we going to go after getting the penetration in there, getting the wireless attached, and then grow from there? Absolutely in certain areas. Shifting over to fixed wireless. What have you learned about the demand and the performance of FWA across different market geographies as you've been expanding the mid-band coverage? About fixed wireless in there? Look, we've learned that customers certainly have a desire for the broadband coverage where it's better than what they have currently. We know that mid-band coverage provides a quality service where, again, we don't have fiber and that customers are satisfied with the experience. We get positive feedback there. It's given us the confidence to grow and to lean in more. The improvement, I think AT&T's talked about better fixed wireless access net adds in the second half of the year relative to the first half of the year. Is that improvement still coming from just that inbound store activity before you get to some of that, we'll call it push marketing that you were talking about earlier? I would say that it was all part of our broader plan. In terms of coverage, is there, can you size the fixed wireless access footprint today and where it's going in terms of the households? We haven't provided any guidance on that, no. You mentioned earlier you're going to be expanding now to, you know, maybe more so outside of the incumbent territory? Right. Outside of our traditional wireline footprint. Traditional wireline footprint. How is fixed wireless access marketing different than fiber, and how does that go to market maybe a little bit subtly different than marketing that fiber broadband product in the marketplace? Our messaging is the same from the standpoint of we'll market it as AT&T Internet. As customers come in and check their address, whichever one they're eligible for, we'll present that product. From a standpoint of how is the marketing different, how do we target certain segments, we will test and iterate based on the market we're in, the target audience we want to pursue, and we will test and learn as we go with respect to the message that works, with respect to the offers that resonate more. We are very much in that phase, both with fiber, with converged offers, and with fixed wireless. I think what's interesting for us, Mike, is we have new tools in our toolkit, and being able to use the AT&T Internet message is so new for us. Our ability to personalize these or to go local is also fairly nascent for us. We aren't afraid to go out, test it, and adjust. We've been doing that a little bit with wireless over the last year. Bringing Internet into the fold is an exciting opportunity. AT&T's been also promoting the open access, you know, fiber business model. Can you just review with us in terms of how that works, in terms of AT&T's ability to sell services through the open access model? Is there a possibility because of the terminology that other parties could actually resell the same fiber footprint? What I would say about, I'll reference our performance in that model, and I would say we're very pleased. What we've done with that model is proven to ourselves that the AT&T brand and AT&T fiber hunts outside of our footprint. It does so very well, that our distribution models work, that our brand hunts out there, and that we can attach wireless as well, if not better, outside of our footprint as we can in. That gives us a lot of confidence about our ability to grow wireless share and to attach and penetrate the fiber footprint. You mentioned earlier the opportunity with this spectrum acquisition to augment and maybe speed up the legacy migration. Can you just share with us maybe some additional details on how that's going? You already have, back from the analyst day, you shared some of the wireless products that you have to migrate customers over. Where are you on that journey? We are accelerating that journey. We're doing very well. We've made a lot of progress with favorable rulings from the FCC, and we certainly appreciate their support. I have a peer who is leading that effort, and she has just done a phenomenal job leading all of us through that transformation. On the consumer side, we've had a lot of success. It is an area where we've been able to move consumers from a legacy product to fiber. That's certainly a, it's a fairly easy proposition for customers that are willing to make the leap. That is one where we've been able to migrate customers and actually get ahead. We have worked through quite a bit of backlog where customers have been on copper legacy products, migrate them to fiber. At this point, as soon as we build fiber in the neighborhood, we're able to get customers off of that copper, move them over, and as soon as we can build it, we get them off the network. We're doing very, very well there. As soon as she's able to work through all the other, you know, more complicated traps, we just say, what can we do to help? She does all the heavy lifting. To round out this conversation on broadband, there have been some changes to the BEAD program. Are there any incremental considerations or opportunities for AT&T with respect to size, timing on what you may be able to do in terms of expanding your footprint with BEAD? I would say we continue to participate where it makes sense. As long as those bids are economical for us and provide the right returns, we are certainly supportive and continue to participate. Jen, thank you so much for joining us today. Absolutely. Thanks, Mike.