AT&T CEO looks ahead to the new year

AT&T is seeing unprecedented growth in bandwidth demand and has transformed itself to capitalize on that trend with a seamless, IP-based global network, the company’s chairman and Chief Executive Officer told the AT&T Investor Day audience this morning.

Randall Stephenson painted a very bright picture of AT&T’s future, calling his company “uniquely positioned at the center of this new communications industry.” In addition, he said, AT&T is being “driven by mobility, broadband and customer choice,” with a “simple, clear vision” of putting “mobility and IP interactivity at the very heart of the customer experience and the forefront of our business.”

As a result, he said, AT&T will continue double-digit growth in adjusted earnings per share and should see mid-single digit growth in revenue in 2008 and the years beyond.

The company is ahead of its plans to integrate AT&T and BellSouth and has turned the AT&T enterprise business around a year ahead of schedule as well, Stephenson said. It will expand its U-verse IPTV service to 30 million customer locations by 2010, including the Southeast region served by its BellSouth acquisition.

By focusing on scaling its all-IP network and integrating its wireless and wireline operations into a single company focus, AT&T expects to “elevate the customer experience and drive customer growth, drive loyalty, drive service adoption and increased usage,” he said.

Much of Stephenson’s 27-minute speech focused on two themes: growth opportunities based on customer behavior and AT&T’s transformation into a global IP network able to support broadband and mobility.

“We are seeing volume growth in this industry like we haven’t seen in a long time,” Stephenson said. “Global broadband, converged devices and converged services are, quite frankly, exploding. We are seeing consumer demand accelerating. I think you’ll be surprised at the customer trends we are seeing, which are reshaping the industry and creating a whole new set of opportunities for growth.”

That includes growth in voice, he pointed out, which most people overlook.

“Traffic volumes are surging, and it starts with voice traffic,” Stephenson said. “There is a misperception that voice is declining. Voice is growing at about 10% year over year. What is new is the shift to wireless. Voice is still the most relevant and the most profitable application we run over our networks. Without wireless, frankly, you really don’t have a voice offering in this industry.”

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