AT&T CFO Desroches: $150 billion bet paying off

AT&T's presentation at the Citi conference was framed as a progress report on a turnaround that began when CEO John Stankey and CFO Pascal Desroches took their roles. Desroches described the starting point bluntly: a weaker mid-band spectrum position, a predominantly DSL broadband footprint, declining DirecTV operations, and more than $150 billion in debt. The divestitures of DirecTV and Time Warner, along with a reduced dividend, were credited with freeing up capital to reinvest in the core connectivity business.

The company now points to what Desroches called the nation's largest fiber broadband network and its strongest spectrum position to date, achieved while rightsizing costs and reducing leverage. Business connectivity is showing renewed momentum, with advanced-connectivity revenue growing nearly 2% year over year in the second quarter, and AT&T is investing in 400-gigabit capacity, security and network intelligence to serve enterprises expanding AI workloads.

The stakes come down to whether that business momentum can be sustained alongside a strategy of converged wireless and broadband services, which AT&T says reduces churn and increases customer value. The company is also raising some prices with limited churn impact, and expects to retire copper infrastructure by the end of the decade. How those moves translate into the guided double-digit EPS growth and 3%–4% EBITDA growth this year will be the measure investors watch.