AT&T - A Connectivity Company at its Core - ETI
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December 17, 2020

AT&T – A Connectivity Company at its Core

The following transcript has been edited for length and readability. Listen to the entire discussion here on The Broadband Bunch.  

Craig Corbin:

Hello, everyone and welcome to another edition of the Broadband Bunch. I’m Craig Corbin. AT&T is a brand synonymous with innovation in communications. What began 144 years ago with Alexander Graham Bell’s invention of the telephone is now the world’s largest telecommunications company. Today, that innovation is making a huge impact in the world of fiber broadband. Our guest today has spent more than two decades in technology development, and has been part of the design and initial service launch of every major technology upgrade for AT&T going back to GSM Edge and LTE. It is a pleasure to welcome the Senior Vice President for Broadband Product Management and Strategy at AT&T, Cheryl Choy.

Craig Corbin:

It is so exciting to be able to get an update on what is happening with AT&T, but first of all, let’s start with your background. After the time that you’ve spent in technology, how did you become the Senior VP of Broadband Product Management and Marketing at AT&T?

Cheryl Choy:

I feel very fortunate to be working at AT&T and to be a part of an exciting time in the broadband space. I started as you mentioned, my career with AT&T over two decades ago. That sounds very, very old! I grew up in Seattle and I went to University of Washington where I studied business. I started with AT&T’s long-distance arm in sales. I spent a few years in sales and then in 1996, when AT&T acquired McCall Communication, I saw my opportunity to be on the cutting edge of technology and I moved over to wireless. I spent probably half my career in wireless, doing any number of roles, initially in enterprise sales but then I moved over into product development and then I got deeper into the technology, product development, product architecture, and engineering.

Cheryl Choy:

I helped to launch Cricket Wireless. I was the initial VP of Network that built out the network on the AT&T backbone.  We launched it and scaled it, and now are really thrilled with the performance that it’s delivering to our customers in Cricket Nation. I have done jobs in video operations, leading that organization, and then in broadband.  I have been in and out of broadband for quite a number of years and have been in the nucleus of our fiber build, and also launched our fixed wireless product in rural America.

Craig Corbin:

That is such a phenomenal background, and a foundation that obviously serves you extremely well.  You mentioned that this is an exciting time to be in broadband.  When we look at what’s transpired this year due to the global pandemic shining a white-hot spotlight on the universal need for connectivity, be it for distance learning, remote working, telehealth, you name it – the need has always been there, the pandemic has just emphasized what we knew.  So being able to serve those who are in need of broadband with a strong, vital fiber-based network is huge. That’s been a part of what AT&T has been focused on for some time. If you would, talk about the footprint of fiber for AT&T and how you’re addressing that digital divide.

Cheryl Choy:

We launched our first fiber household back in 2013. Initially we launched in a couple markets, and then really built out the nucleus of our network starting in 2015, all the way through 2019 hitting 14 million households. So those 14 million households are nestled in our 21-state footprint. We’re just really thrilled with the performance of our network. Our customers are thrilled with the product that they’re receiving. Just this year, we were awarded JD Power’s number one in customer satisfaction, in all of the markets that AT&T offers broadband service in.

Cheryl Choy:

Just this last quarter, we had our best fiber net gain ever, and we’re on track to delivering an incremental million fiber customers on the network for 2020!

Craig Corbin:

There are always challenges that come with expanding networks in any way, shape, or form.  And obviously, there have been challenges this year that have been a result of the pandemic. How has AT&T addressed those?

Cheryl Choy:

It’s not easy to deploy a fiber network and a new network. However, I think that we were set up coming into this year really, really well. We offer customers that are eligible a customer self-install kit that we can drop to the customer, and they can install it. We have a great application called Smart Home Manager that allows the customer to walk through that customer self-install experience, as well as set up their in-home WIFI experience. Certainly during the pandemic, people are staying in unfortunately. Some people don’t want to stay in as much, but staying in their house. And frankly, they’re trying to do so much in their house all at once, right? And so, people are trying to set up their home office, remote learning, and they’re doing it in the far reaches of their household.

Cheryl Choy:

One of the things that we experienced, and we were set up so well for is the fact that everyone is using the WIFI network, right? I have coworkers that are set up in their garage, because that’s the only place the kids won’t follow them or the dog won’t follow them. And so, got to get strong WIFI out into the garage, got to get strong WIFI in the back patio. Got to get strong WIFI into the basement or the attic.

Cheryl Choy:

We have a great set of WIFI equipment that we have deployed to our customers. We have extenders that broaden that coverage, and we have an application that just makes it really easy for customers to set up, but also manage. People want to be able to manage their network. There’s more and more devices. During the pandemic, we saw a 25% increase in the number of connected devices, and a 30% increase in the usage of the network. And so, people are saying, “Hey, Johnny Sue, you guys, get off the network after bedtime.” And so they’re going to their Smart Home Manager application and they’re basically disconnecting Johnny Sue. Let’s get them off the network so that they can get some sleep and get back to remote learning the next morning, because we’re not on vacation. We’re still learning.

Craig Corbin:

You mentioned the increasing need for device connectivity. That trend will continue to grow as we move forward. That’s a very important part of what AT&T is providing. And you look back at the history of the electrification of our nation, and how there were public/private partnerships that played a huge role in that very vital movement. Are you seeing any examples of similar partnerships today with fiber and fiber broadband?

Cheryl Choy:

We need to encourage more partnerships, and frankly, more out of the box thinking with the government and public/private partnerships. I think that the analogy to the electrification of the United States, (although I’m not old enough quite to have said that I witnessed that, even though yes, over two decades with AT&T), but I do believe that we’ve shined a light on the fact that not everyone has access to high-speed broadband but everyone needs access to high-speed broadband.

Rural Broadband – Wireless Option

Cheryl Choy:

Especially when we think about rural America, for example, I know the government has initially tried to encourage development in rural America. There are a couple areas that we need to address. Number one, it’s the infrastructure. How do we expand the infrastructure? That takes capital, and frankly, it takes a lot of capital. And then, how do we make it affordable for those that need it and can’t necessarily afford it? So looking at just expanding the infrastructure and the capital investment required, I believe that A, it requires thinking a little bit out of the box.

Cheryl Choy:

As I mentioned, we have had experience in building in rural America, and frankly, bringing in a wired network, a fiber network in rural America is really, really expensive when we think about the expansion, the massive amount of space and how many fiber miles you’ll have to lay down in order to pick up each household. What we’ve found is actually wireless is a more optimal technology, at least to bring in high-speed broadband to rural America. And frankly, we need partnership and providing funds to expand their using all technology available, but I would say that wireless would be the most optimal, and frankly, it’d be a win-win for those that are in rural America. If we bring in broadband via wireless, it also expands the wireless coverage for their mobile devices as well.

Cheryl Choy:

That’s the infrastructure aspect, and then there’s the affordability aspect. Making broadband more affordable to low income, I do think that the expansion of low-income broadband has largely come on the backs of the carriers. All of the low income offers that we provide is not subsidized by the government. It’s purely us offering the service. I do believe that there should be an opportunity to look at how does the government, help get more subsidies for low-income customers.

Cheryl Choy:

AT&T has an arm, and I’m not in that arm, that is in partnership and collaboration, thinking through what we could do to create a win-win proposition. For the consumer, as well as for all those involved.

Craig Corbin:

This is the Broadband Bunch, and we’re visiting today with Senior Vice President for Broadband Product Management and Marketing, I think there has always been that with larger providers, that many times, you’ve got to focus solely on the bottom line, on balance sheets, ROI. But to your point a moment ago, that the expense of expanding fiber into less densely populated areas is a challenge, just because of the expense. How does AT&T approach that?

Cheryl Choy:

AT&T, like any public company, has an obligation to our shareholders to have a responsible approach to our spending and deliver predictable returns to our shareholders, especially a reliable dividend to our shareholders.

Wireless vs Fiber?

Cheryl Choy:

The need is great. There are millions of households that need to be covered. And it’s all about priority and how many households you can pick up for that investment choice. Thankfully, AT&T has two great technologies that we can leverage. We can leverage our wire technology via fiber, and we also have a great backbone of a wireless network.

Cheryl Choy:

Being able to figure out the best opportunity to hit the households either via a direct wired connection or a wireless connection is what we’re all about and what we’re focused on. And frankly, that is our priority, is connectivity via 5G wireless or fiber-based connectivity.

Craig Corbin:

Most observers would say that our wireless technology is more agile with regard to the speed with which you can address connectivity issues in areas that need service. Yet, focusing on the backbone, the strength of the fiber network that you have. And I know that that is obviously with any wireless application, you still have a component that depends on fiber network, and I know that from the standpoint of considering fiber to be very much the strength of the focus of your technology moving forward, talk about that a little bit.

Cheryl Choy:

If I’m explaining to my mom for example, about AT&T and the fiber investment, I tell her fiber is really at the core of our network. She thinks wireless just magically appears in the air. Well, no, Mom, we bring fiber to the cell sites, and that is the core backbone. In the air is the last meters, miles that you’re not seeing. But there is fiber that carries the high-speed wireless technology that our customers enjoy.

Over 60% of Fiber Customers Have 1G

Cheryl Choy:

And then obviously, a little bit more straightforward is bringing fiber to the household. Fiber is at the core of all of our technology and it is the foundation. Frankly, it’s the backbone of the internet and it’s what our customers are enjoying in their connectivity services on AT&T.

Craig Corbin:

A big part of what any organization does is looking down the line and strategizing for the future. Can you address if you will any primary areas of focus, as you look to the long term with AT&T?

Cheryl Choy:

There are a couple areas, we’ve tried to continue to work on our price value for our customers, right? We just launched three new price tiers for our customers. Incidentally, our customers, our fiber customers, really, really love speed. I mean, they turn to AT&T fiber for one gig speed, and as of the end of third quarter, we have over 60% of our fiber customers on one gig speed. That’s just a huge testament of what customers want, and just how powerful it is for our network. Which by the way, during the pandemic, our fiber network performed flawlessly. I mean, customers can use our network 24/7, and there is no peak hour congestion on our network and that’s definitely resonating with the customers.

Cheryl Choy:

There are some customers that don’t want one gig speed, don’t need one gig speed, maybe people that live in apartments alone and aren’t using high-bandwidth applications, and so therefore, we did launch a 100 and 300 mg speeds to give more optionality for customers that aren’t as interested in that high-powered speed on our network.

New WIFI Six Gateway, Multi-gig Speeds

Craig Corbin:

You made mention a moment ago of the fact that the network performed flawlessly given the increased demand. I would assume that that was some extremely positive result from the company’s standpoint, knowing that what was in place worked as it was designed.

Cheryl Choy:

Our one gig customers can use the network without worrying about booting everyone off the network and being able to do the work. You asked me what I’m excited about and what is coming down the pipeline.

Cheryl Choy:

At the end of this year, we just launched our new WIFI six gateway. This is a triband gateway, and it’s going to offer more speed, more five gigahertz connections to our customers, better coverage in the home. We’re really thrilled about it. It’s also capable of multi-gig speeds, and we’re really excited about AT&T’s position to be able to offer multi-gig speeds into the future. We have the equipment, we have the technology and we have a great evolution path to multi-gig speeds.

Fiber is the Future

Craig Corbin:

What would some of those challenges or hurdles have been in the process of developing the capability of your broadband service?

Cheryl Choy:

Gosh, when I think about hurdles, right now, I don’t see hurdles. I think that the hurdles came back seven years ago when we decided, “Hey, we’ve probably taken our DSL technology as far as it can go, and we need to move to fiber.” And fiber is the future, and frankly, as I sit on the fiber network and I look ahead to the future, I don’t see an end in sight. The hurdle was behind us, just getting our minds and our pocketbooks ready to invest in a fiber network. Since then, with over 14 million households covered, we have learnings under our belt. We have muscle memory. We have incredible talent in the organization to just keep the momentum going.

Craig Corbin:

Obviously, there is nothing that is more well-received from a competitive standpoint than when there are new options for service, and so for those who might wonder if they have AT&T fiber broadband available in their neighborhoods, what’s the best way for them to find that out?

Cheryl Choy:

AT&T.com, and go onto the internet and type in their address. Availability pops up. I encourage everyone in our footprint to take a look. We did a mail out, but most people don’t check their mail and see all the advertisements that I’m spending money on, but we’d love for people to check it out and see if their address has fiber coverage.

Craig Corbin:

This has been a wonderful conversation, Cheryl, this morning. As we close, anything else that you’d like our listeners to know before we wrap up?

Cheryl Choy:

I’m really privileged to work at AT&T and proud of our company, proud of what we do. At our core, we are a connectivity company, and we’re in a great position with our fiber and our wireless assets to continue to deliver connectivity to customers. Consumers, businesses, enterprises, so really, really excited about it and really excited about how the growing momentum and recognition of the general public of how important connectivity is.

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