AT&T gave more details about the deployment of the 80 megahertz of C-band spectrum that it won in the FCC’s Spectrum Auction 107 last week at its Analyst & Investor Day. The company plans to begin deploying the first 40 megahertz of this spectrum by the end of 2021, according to Jeffery Scott McElfresh, CEO of AT&T Communications.
“We’re already hard at work readying the network,” he said. “We’ll be on pace to cover roughly 70 million to 75 million pops by the end of 2022, and we will surpass 100 million POPs early in 2023.”
AT&T expects to spend $6 billion to $8 billion in capex deploying the C-band spectrum, with the vast majority of the spend occurring from 2022 to 2024. Expected C-band deployment costs are already baked into its 2021 capex guidance.
“Over the last couple of years, we’ve stepped up our investments in our wireless network as we have deployed our FirstNet program in Band 14 with our efficient single touch approach,” McElfresh said. “And as that program begins to enter its final stages, we’re shifting our investments in wireless to more densification, which includes the deployment of our C-band spectrum. So it will be an allocation shift within our current portfolio.”
Many have questioned how the C band bid would affect AT&T’s leverage. The carrier explained how it will pay for C-band spectrum, for which it bid $27.4 billion.
In 2021, the company expects to have access to cash totaling at least $30 billion, including cash on hand at the end of 2020 of $9.7 billion, commercial paper issued in January 2021 of $6.1 billion and financing via a term loan credit agreement of $14.7 billion. At the end of 2021, the company expects to hit its target net debt-to-adjusted EBITDA ratio of about 3x.
Advances in technologies such as carrier aggregation and antenna design have helped improve the speed of its network, according to McElfresh. The carrier still has 30 percent of its low and mid-band spectrum to deploy, which will further drive performance in the top 50 urban areas.
McElfresh is confident about AT&T’s spectrum position, saying the carrier can count on additional spectrum coming on the market.
“The secondary spectrum market is opening up, and technology advances have proven time and again to level the network playing fields in the wireless industry,” he said. “Our network has never been stronger, and we remain committed to investing in our wireless network and are confident we’re equipped with a solid spectrum position.”