AT&T CFO John Stephens, speaking at a Deutsche Bank conference, said one of the synergies from the DirecTV deal will be AT&T's enhanced leverage with content providers.
specifically pointed out that after the deal, the new AT&T
will be one of, if not the, largest customers for the content providers.
Coupled with AT&T's
large smartphone base and many broadband locations with no video piece, Stephens
will be able to offer over 100 million new sources of distribution.
hoped that leverage and incentives will allow AT&T
and content providers to "work something out in a constructive fashion."
Aside from the DirecTV deal, which AT&T
still expects to close in the first half of 2015, Stephens
said that recent spectrum acquisitions have solidified AT&T's
ability to offer a "high-speed video-enabled wireless service."
Looking ahead five years, Stephens
will be able to offer a variety of subscription and non-subscription video models.
In terms of OTT, AT&T
doesn't see it as a replacement of the seemingly troubled linear TV model, but as a supplement.
"Our strategy is to bundle," Stephens
With the new options presented by bringing into the fold DirecTV, Stephens
said the synergy savings now are higher than what the company predicted back in May 2014.
On the network side, Stephens
said that AT&T's
Project VIP is "significantly done" and the company finished it faster and more efficiently than expected.
also said that with AT&T's
move toward a software-defined network (SDN), over time that could possibly give the carrier a chance to use a smaller percentage of service revenues for CapEx.
currently earmarks 15 percent-service revenues last year totaled $120 billion, resulting in $18 billion for CapEx.
also said SDN will be good for revenue because it will shrink cycle times, leading to more business.
In all, Stephens
said there's a "reasonable chance" AT&T
will return to a 1.8 net-debt-to-EBITDA range within the next three years, and thas taking into account the $9 billion in capital AT&T has pledged as part of the DirecTV deal toward the 2016 broadcast auctions.
Ahead of those competitive auctions kicking off, Stephens
seen a shift in wireless industry competition, with pricing changes beginning to be stabilized by rising activation fees and ending promotions.
to grow EBIDTA service margins this year by not chasing customer net adds and instead focusing on smartphones and the ability to bundle in Internet of Things products and services and postpaid tablets.
Of the 400,000 postpaid net adds AT&T
is projecting for the first quarter, Stephens
said tablets make up most of that.
said that AT&T's
smartphone growth will continue and that the carrier won't have to chase feature phone losses because its prepaid business will be able to pick up those revenue streams.
Looking a decade out, Stephens said IoT will be a huge mobile growth driver for AT&T as mobile connections become as ubiquitous as electric wall sockets.
"10 years from now you won't know how many mobile connections you have," Stephens