M+E Connections

AT&T CEO: Demand for Premium Video, Broadband to Increase with 5G’s Arrival

Consumer demand for premium video content and broadband will continue to grow significantly, especially with the arrival of 5G, according to AT&T CEO and chairman Randall Stephenson.
“We don’t know exactly what [AT&T is] going to look like five years from now,” he said June 21 at the Wells Fargo Telecom Forum in New York.

But he said: “Here’s what we do have a high degree of conviction about. And that is, five years from now, people will be consuming more premium content than they are today, not less. The demand seems to be insatiable. There’s more being created and there’s more being consumed. And so, premium entertainment and premium content – both live as well as on demand – is going to grow.”

And that is “why we made such a big bet on Time Warner,” he told the investor conference, referring to AT&T’s recently completed acquisition of Time Warner after a total of 600 days that included a long delay caused by the Trump Administration’s antitrust challenge to the deal.

The administration’s effort ultimately proved unsuccessful as U.S. District Judge Richard Leon, on June 12, issued a ruling rejecting the Justice Department’s request to block the merger. The merger brings HBO, Turner (including CNN) and Warner Bros. under the AT&T umbrella.

Several significant things have happened during those 600 days, Stephenson pointed out. For one thing, he joked, he and AT&T CFO John Stephens “added three grandchildren to our families.” In addition, there was “sweeping” tax reform for corporations that has caused AT&T to be “nothing but … more enthusiastic about” the Time Warner merger, he said.

AT&T is also “committed and believe strongly that the demand for bandwidth is going to do nothing but continue to grow dramatically,” he said, adding: “As we move into a world of 5G, it’s going to change the customer experience like nothing we’ve seen. We think 4G was radical — and it was. 4G is what enabled us to begin watching video on these mobile devices and it’s what has begun to push video consumption into the world of mobility.”

But he said: “5G takes us to a whole different place. And this is going to be truly no latency, on demand video, virtual reality, autonomous. The demand for bandwidth is going to do nothing but continue to grow at a significant pace. And so, [for] those who are equipped and prepared to invest in that kind of bandwidth, those who are equipped and prepared to invest in premium content and prepared to invest in direct-to-consumer relationships – that’s a differentiator — and ad tech … there is nothing but opportunity, we believe, over the next five years.”

He declined to “forecast exactly what that looks like” when all is said and done as far as AT&T is concerned. But he told the conference: “I believe all four elements of those are going to be growing dramatically in the next five years. I love where we stand in that regard.”