AT&T Inc. (T)

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AT&T Inc. (T)

January 05, 2012 11:15 am ET

Executives

John Stankey - Chief Executive Officer of AT&T Business Solutions and President of AT&T Business Solutions

Analysts

Michael Rollins - Citigroup Inc, Research Division

Presentation

Michael Rollins - Citigroup Inc, Research Division

Before we get started, please note disclosures are available at the registration desk. For those joining us via webcast, I'm Mike Rollins, telecom analyst at Citi Investment Research and Analysis, and I'd like to welcome you to our second day of our 22nd Annual EMT Conference. We're going to kick this off with our AT&T as our first company keynote this morning. John Stankey is joining us. He's the President and Chief Executive Officer of AT&T Business Solutions. John's responsibilities go even beyond the business segment to include running the networks and the operations at AT&T.

John, it's a pleasure to have you back today. John is going to give us some opening comments and a short presentation, and then we'll jump into some questions from myself, and also invite some questions from the audience.

And so with that, I'll turn it over to John. Thank you very much.

John Stankey

Thanks, Mike. Good to be with you. Happy new year, everybody. I hope you had a good holiday period, and got some rest and ready to go for 2012.

So first, let me give you our Safe Harbor statement. As you can on the screen and read it in its complete detail, please note that some of the things we're going to discuss this morning are forward-looking. They change. We may not update that, and there's of other filings you can go find in other places online, and with the SEC, to make sure you understand what's going on with all these issues.

So first, let me jump into kind of where we stand today. We're running the business. I know there's been an awful lot of noise as we exited the fourth quarter, especially with our transaction with T-Mobile and our decision to back away from that. During this period of time, I think we did a very, very good job in the third and fourth quarter as we ran the business. It's unfortunate we didn't get this done. I don't think anybody has any second guesses about having done it. I'll tell you conclusively, we have no second guesses about having done it. We sit back, and like any good business, ask ourselves if we have done something differently. And on the margin, there may have been one or 2 things, but we absolutely would have pursued this transaction had we had the opportunity to do it, and don't have any second thoughts about that. Our only regret is probably that it didn't get done, and it's unfortunate. I think, in the long run, it will be unfortunate for the industry. It's going to be unfortunate for the consumer and capacity.

But we started this transaction on a very strong position in this industry, a great balance sheet, great place in the market, a great set of assets, and we intend to carry forward from that day now and do what we're doing before. And like any business, we'll step back and ask what else is there to do? What other opportunities to innovate are there? How can we change this industry? How can we find a way to move forward and grow? And we will find those ways to do that. And I would tell you, our performance in the third and fourth quarter would indicate that there's still a lot of runway.

I'd like to maybe quickly touch on these 4 themes, if I could. First of all, I think our operational execution was very strong. Secondly, I'm going to talk a little bit about the fact that I think we've got the right kind of fundamental architecture and platforms to work from. And third, we've got good solid balance sheet, very strong margins and very strong performance over time.

So first, let me talk a little bit about execution, and focus specifically on Wireless here. I've given you a couple of data points up here on the slide that you can look at. But last year, about this time, I think we'd told you we would have about 2/3 of our Mobile data traffic on enhanced Ethernet backhaul by the end of 2011. Well, I'm happy to tell you, it's beyond 2/3. And we closed the year at 80% of our total Mobile data traffic on Ethernet backhaul.

I would also tell you, we've made some really phenomenal progress on our network quality metrics. I think the thing I would note more than anything else is it's been fairly quiet in the media and elsewhere over the last several months. I would expect that to be the case. As network performance stabilized, we've kind of gone into what I would characterize as more of a neutral state. Our job now is to turn customer perceptions from neutral to positive. And I think the trajectory we're on is exhibited by that middle panel on the slide that shows our dropped call performance in all of our major markets. It's a good indicator that we're on that path, less than 1% dropped calls in all of our markets as we exit this year.

Now we feel really good about that. We feel good about the progress, but I don't want to suggest that we're done. We know that there are areas that we still need to focus on. We know that there are geographic hot spots that still need work. I think we understand exactly where those are. There are good plans in place to get them done, and I'm very confident that our trajectory will carry into 2012. And we'll see the continued progress and improvements in those trends and lines as we move forward.

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