AT&T Inc. (T) Earnings Call Transcript & Summary

Welcome back to our next session. I'm Brett Feldman, Goldman's U.S. telecom and cable analyst. It is my pleasure to welcome back to Communacopia, John Stankey, the CEO of AT&T. John, thanks so much for being with us virtually this year. Before we get started, I do think you have a safe harbor and then we're going to jump into it.

Brad, thanks for having me. It's always a good one to do because it feels like we're just been ready to enter into fall, which is always a good moment for all of us. And yes, I would like to refer everybody to the fact that some of the comments may be forward-looking in nature and may be subject to uncertainties and change, our results could differ materially. And if you're interested in more information, you can go to the AT&T Investor Relations website and see all of our SEC filings if you need some help getting to bed at night.

Great. Let's jump right into it. So if we look back to your first Communacopia, which was last year, CEO of AT&T, you outlined a few key priorities, which we're focusing on growing your customer base, delivering a robust direct-to-consumer experience through expanded HBO Max distribution and expanding the breadth of its content and exercising a disciplined capital allocation strategy. You also said you would monetize noncore assets to the extent that would accelerate your focus on 5G, fiber and software-defined entertainment. It's a pretty lofty set of goals that you set. And as we sit here today, how do you believe AT&T's position with regards to executing against that strategy?

You have a good memory. I think the other thing I said was that we wanted to be effective and efficient in everything we did. And I would say the answer is check, check and check. If you kind of think about how we perform from a market perspective, I couldn't be more pleased across the board with how the team has done. You think about we've probably added nearly 3 million postpaid voice net adds in our wireless business. That's a clip over the last year that is probably something we haven't seen in a decade, about 1 million broadband subscribers. That's really, really strong for us and consistent with what we had articulated a year ago in terms of our expectations. Our penetration levels on our existing base continue to increase and improve. We're excited as we get into the second half of this year now as we start bringing on new footprint. -- that we didn't have access to, which will begin to accelerate that rate of customer growth as a result of that. And then, of course, about 11 million HBO Max subscribers. And Jason and the team has done a remarkable job carrying that product forward I think I can definitively say we have a established direct-to-consumer streaming platform that has a great future not only in the subscription business, but in subscription and ad-supported. And I think that optionality is going to be really, really important moving forward. And I know David made a few comments of that -- about that just a minute ago. On the effectiveness and efficiency aspect of things, we talked about a desire to find $6 billion of cost efficiencies in our business. And we're about 1/3 of the way through that. We did a little over $2 billion. And most of that was redirected back into our business to make sure that we had that market momentum I just talked about. And so as we've gone through some of the things that I know people have talked about relative to our promotion posture in the market, how we've been attacking our customer base both for acquisition or retention and questioning whether or not that's sustainable. And the answer is yes, it's been sustainable because the team has done an excellent job of finding opportunities to maintain margins in this business, so that we can redirect our resources into market penetration and sustaining a great customer base that we have and I'm really pleased about that. And as we move through that $6 billion objective over the next couple of years, you'll start to see us make choices about what we choose to take to the bottom line because we will hit that threshold point where we're able to sustain our market position and do what we're doing and at the same time, ultimately reap some benefits back. I would also tell you, from an effectiveness and efficiency perspective across the board in every single one of our key products. We've seen improvements in our customer metrics, how our customers perceive AT&T, their satisfaction, their churn rates, I've been really pleased at how balanced our growth has been, and we've been doing it the right way, feeling like we're doing much better with our customer base. We still have work to do there, but moving along that continuum. And then -- look, in and of itself, if you just think about the restructuring that's been done since I was with you last year, obviously, we announced the discovery transaction. I think David spent a fair amount of time chatting with you about that earlier. I don't want to repeat a lot of it, but that's not an insignificant change to the business. And was a lot of work that went on to put us in a position to carry that forward. But let's not give a short trip to all the other moving parts that have been going on behind the scenes that have helped us to substantially improve the balance sheet. That includes finding the right partner and what we've been able to do with the DIRECTV transaction and restructuring that asset. As you know, we've announced Vrio in the Latin America asset change. We completed the Puerto Rico divestiture of the wireless business. We've had a variety of other $1 billion, $2 billion transactions, Crunchyroll sale to Sony, what we've done with Playdemic. The team has just done a remarkable job of finding the nonstrategic assets, moving them through the pipeline and completing transactions, which it seems somewhat perfunctory externally. There's a lot of work that goes on to make that happen. And I feel really good about your past where we sit right now. And that as we think about what happens next year, I feel like we've got the right platform in place right now.

That's a great overview. And just to sort of follow up on that, question we get is you've outlined a lot of strategic transactions, many of which you've closed already. How did you decide that now is the right time to think about having a different capital structure strategy for where your assets reside? And then the follow-up to that is you really have 2 major business segments. You have the Communications segment. You have your media segment. How are you thinking about the key opportunities at a high level that lie in front of you in both of those main segments that you operate?

I think the 2 questions are pretty much related to each other. And if we went back to the announcement of the Discovery transaction earlier this year, what was underlying that is a belief that there was great potential in both segments. And we felt like we were executing well in that regard. But frankly, it was not seen that recognition in our equity and enterprise value and how the business is being viewed by the investment community. And I think there's a number of things that always go into the decision-making around these moments. This was no exception. Certainly, it starts with that, which is the individual most responsible to the shareholder and the value we bring back to the shareholder. I wasn't pleased with where we stood and I spent a lot of time as I came into the job speaking with individuals to earn capacity similar to yours as well as other investors, asking them their point of view on the company, not only at this moment in time but over history. And I took that feedback and understood that one of the things I think we need to do is basically formulated different investment thesis, so people could understand the business and find the right place to put their capital based on the profile of the great opportunities that the media business and the communication business had in front of it. In addition, certainly looked at the dynamics of what was in front of us that time of pandemic that was raging the need to invest at heavy levels to seize the opportunities, both in the communications business, with the dawn of 5G and the importance of connectivity that was so prevalent during the pandemic that we all saw, the media business, moving from a direct-to-consumer business that initially as we kind of started in the media landscape thinking about a more domestic business to complement our connectivity that now is clearly becoming a global play and a need to make sure that we pursue that opportunity and not held those assets back as you heard David talk about in his earlier discussion. The reality that we're probably going to see some tax structure changes that ultimately would impact cash flows to the business as those things came about and in a reality that over time, I probably wanted the flexibility in the balance sheet, especially if interest rates start creeping up to do the right things that we need to do to make sure that both businesses are positioned well. And so -- when you kind of look at the confluence of those dynamics and the great opportunity that putting Discovery and WarnerMedia together makes it a much stronger asset, as David described, I think he's going to be in a position to have just an incredible library of intellectual property. They'll have an incredible opportunity given the relevant position of both companies around the globe where discovery is strong, where WarnerMedia is currently strong, to complement each other to get that great global growth. We're on a path right now with stand-alone HBO Max to be in the 120 million to 150 million subscriber range by 2025, 70 million to 73 million subscribers this year. Our launch in Latin America has gone really, really well, been very pleased with it. But we need that global momentum. And I think that, as you heard David talk about with his go-to-market work, that he's been working on. Those 2 companies together are going to allow it to hit that upper threshold that's necessary to compete with what I think are going to be the global platforms moving forward and sustain themselves. And I think that's a great place for the media company in an asset. It's trading right now like a cable network asset. If you kind of look at valuation within the stock. My belief is as we get through this, we should see that multiple start to recognize the fact that there's a great direct-to-consumer business that should be valued in the same way the market is valuing other great direct-to-consumer businesses given the prospect that's in front of it. The Communications business, look, we've demonstrated that we can get the momentum in the market, and this team knows how to operate when it's focused. I'm really pleased about that. We're not ceding share anymore. We're pulling share back from our 2 largest competitors. I feel good about how we're doing that. There's more to be done as we invest in fiber, and we can complement our wireless business with fiber. There's opportunities for us to take Communications further than what we've traditionally done at AT&T. And I think that business should be recognized for being a leading global communications business like it is, very uniquely positioned with more fiber than any other communications company on the face of the planet with a great wireless asset domestically in the U.S. and in Mexico, an opportunity to bring those things together and run it incredibly effectively as a focused business. I think we've got a great story there. And as a result of that, again, we're trading at multiple differences to our peers in that market. And when we operate equally and drive the right kind of returns out of that business, we should see our shareholders benefit as a result of that. So nothing more than that, Brett, in terms of how we thought about this, and why we're on the path we're on right now.

All right. Let's talk about one of those points or opportunities of execution for AT&T. You earlier alluded to efficiency as a key priority. And you've talked about cost transformation. A key question we get from investors is that, AT&T has pursued cost transformation programs in the past, I think back in 2019, you had outlined some long-term guidance and anticipated further cost savings, but then of course, we hit COVID and that changed the pace of things. If we're optimistic that we have the worst of that in the rear view mirror, why should investors have confidence that through this next cycle of cost transformation, these efforts are going to ultimately fall through to the bottom line and improve the return on your assets?

Well, it's a fair question, I guess. But I probably won't agree to maybe the premise as before. Actually, if I think back at my history with this company, when we set about doing something from an operational perspective, and we're focused, and we're consistent in our approach. I think we have a really good track record of executing on those types of things. I would say, over the last couple of years, you highlighted one point, which is, we started down a path and COVID hit, and that certainly was a bit disruptive. But I would also say that, look, we've gone through a major transition here. Any time there's a leadership transition at the top of the food chain, oftentimes, it's a good time to step back and take stock of where the business stands. And I don't think it's a secret. I'm not hiding anything to say there was a little bit of a redirection that occurred over the last year and a refocusing of where the business needed to be. And in that process, I don't think we should underestimate exactly what we're trying to do there. And I would, maybe, offset what you talked about as being something that was discussed pre-COVID in terms of cost objectives to where we sit today and really articulate that those are maybe 2 different moments. The moment we're in right now is a business it's a much more -- is going to be a much more focused business. It's going to be a business that's focused on fiber and 5G. And it's a business that, as we came into the transition of CEOs where I stepped back and asked the company to really start to get serious about we have to remove some of the other distractions, some of the other legacy constructs of our product sets, all the infrastructure that goes along with supporting that and truly make this a more focused and streamlined business that can be more agile, more nimble and more focused on growth moving forward. And so all these things around what we needed to do to get the DIRECTV company restructured in a way where a management team could focus on that. But as importantly, what we're doing around the core infrastructure of AT&T, investing in our technology to ensure it supports the products we care about moving forward, doing the right things and removing clutter from the product catalog, resizing our corporate structure to match a business that's more focused and really committing ourselves to putting product in place that is the best because I believe we're in a moment in time that to be effective in markets right now, you can't be average or okay. And while we've got good products out there, and we have some products where we were the best, where we are operating right now, we're not perceived from a brand perspective of being the best in all cases. And I want to make sure that those products and services that we're investing in moving forward in an uncompromising way. We are defining those in a way that the customer agrees with us that we are the best because I believe that's the only thing sustainable. That approach is a much more focused and much more aggressive approach on cost structure, and reengineering of this business, and I think we have probably undertaken in the past. And it's putting a little bit of pressure and strain on the business right now. I'm reinvesting some of those cost savings we talked about earlier in stepped-up IT investment, in addressing many of the process things that I think really good managers and good people in this business know how to do and have wanted to do, and I'm giving them the freedom to go tackle those projects to get them done, so that we have the right business for the next 10 years, it's sustainable, agile and focus moving forward. And I would tell you, I think this management team is really focused on that dynamic right now. I think when we characterize the guidance that we've given out to you in terms of what we expect in mid-single-digit EBITDA growth, what we expect in our earnings growth in mid-single digits, dynamics around our EPS. We've got to do that to deliver that and this management team understands them.

All right. So let's spend some time talking about some of the product areas that you have an opportunity to focus on here. And we're going to start with mobility. You've made a pretty significant investment in your wireless network over the past several years. I think 2 of the most notable examples are not the only would be FirstNet and more recently, the acquisition of a significant amount of C-band spectrum. But of course, your competitors are also stepping up their investments in their networks as well. At a high level, how do you see AT&T's wireless business competitively positioned at the onset of the 5G era? And then maybe more specifically, what do you think AT&T's brand identity is with the consumer? And what do you want it to be? And how are you going to get it there?

Those are really good questions. The second part of that question, in particular, I think, is really important to our company. Look, I would tell you, I think AT&T is in a great position moving forward. I think the industry, frankly, is in a great position. I think there's tremendous promise right now in what ubiquitous, high-capacity bandwidth with the kind of capabilities that 5G brings in terms of the density that it can afford, the number of devices, the ability to use technology to do things like network slice and begin to differentiate the network. I think this is going to be great for society. I think this is going to be great for the U.S. economy as a whole. If I had to bet, we don't have the numbers for 2021, certainly can't project 2022, but I have a sense of where this industry is going, we're probably going to see record infrastructure investment coming out of this industry in this period of time. And I think it's going to equip the United States and our economy and our infrastructure in a way that we've never seen. I think that's going to be incredibly powerful. And I think it's not only going to be good for AT&T because I think we have the right kind of wherewithal and the right kind of capability be right alongside others that are investing in a high clip to bring that infrastructure forward. I think we'll do just fine with where we are there. I believe when unleashed, we have some of the best network mines in the country. I believe that dense fiber footprint that we have that's denser, than anybody else in the United States when engineered properly on top of great spectrum assets and a great wireless business, it's going to make our combined product offer and our business even better and more capable to deal with what customers need to do. So I feel really comfortable about that, and I can do nothing more than not ask you to look at my prognostications, but look at how we're performing in the market today. I told you earlier, customer perception of our company is getting better every quarter. It's getting better across every dynamic, whether it's point-of-sale servicing or their perception of how the network performs. Our share dynamics have shifted. We're growing customers at a rate we haven't in the last 10 years. So set aside kind of my view of the future and just say, are we doing the right things that I think represent the fact that we've got the assets to run great networks, and I think we do, I think, a big factor of why we were able to attract DISH as a wholesale customer is a recognition on their part from their third-party work, looking at how our network performed and what we can offer them that we'd be a great partner. We have great quality that, that can be an added value into their business. And that's really important that I think somebody who understands how to evaluate those things gives us a big vote of confidence on that. Now in terms of where the brand needs to be. This is an area I'm frankly not satisfied as to where we stand right now. The AT&T brand is a remarkable brand. It's a storied brand. It's got a great history. And our customers, I think, understand that look at it. But -- if I were to ask you today, I think I'd probably tell you maybe something similar that you might have heard me say back in what 2014 or '15 when I was in operating capacity roles in the communications business. I'm not sure the brand is positioned well for the next 10 years in terms of a new generation and what's shifting. And I think we need to do some work to reposition and update it. And I'm not talking about advertising here. This is why I talk about being the best, and we need to make sure that how we operate, how our products are brought to market are the best. And they're frankly consistent with how we're positioning in the AT&T brand. The management team has been doing an awful lot of work over the last several months in this area, a lot of primary research, a lot of interdepartmental work within the company, leadership sitting down, talking about what we want this business to be over the next several years, we've brought in some outside talent. We hired a lady by the name of Kellyn Kenny, whose primary role right now has been to lead us through this process and really defining what we want that brand value to be, that value proposition out to our customer base, and how we line up our operations to support that. We're not quite finished with the work yet. We're very close to the goal line in terms of being ready to talk to you about that, characterize it out to our customer base, put in place the mechanics that need to support that, and it will be a multiyear effort for us to ensure that we operate the business consistent with that framework that we put in place. And I think you're going to see us take what is a strong brand today, a highly recognized brand with a lot of brand equity and take it to the new place that will give us -- the AT&T for the next 10 years that we can all rally around and I think will be relevant and take great momentum and make it even better.

And you noted earlier that growth has been pretty strong in your mobile business over the last year. You added just under 3 million postpaid phone subs. This sector has been good, but you've outpaced the sector and your strength has come during a period when you've really leaned into handset promotions. And it looks like you're sort of stuck with that strategies, we've gotten the first look at how you're going to market with the iPhone 13. A common question we get from investors is what should give them confidence that these handset promos are actually going to be an attractive long-term yield for you versus just being a temporary uptick in net adds? Or maybe another way of asking the question is, is this the go-to-market strategy for AT&T until you get to the point where you feel like the brand has evolved more with the consumer?

I'm not going to prognosticate on how long or exactly what tactics we run for what period of time. I think to answer something within the context of the point you make, do I believe that it's important for our company to differentiate our products and services beyond just a handset or an attractive combination of network services with equipment. And I think that's important. And I think we've talked earlier about the fact that 5G certainly opens up a great prospect for the industry, being able to do more in, as I look at the growth profile of this business, we've given guidance on what I would call running our connectivity business better. And look, I think right now, for all the things we have going on, it's important we do that. We pause on that, that we make sure we get that infrastructure in place to be the best, as I talked about in our core connectivity. But my expectation is, and we've now started doing some things quietly behind the scenes, we have another muscle to build here, which is how do we begin to work on software to differentiate our products and services in a way that makes our product better than what our competitors can do because we do have a different asset base, and we are able to serve every corner of the market from the largest of enterprises to the smallest apartment somewhere in the United States. And I don't think we've done as much as we can do in that vein to actually make that real for our customers and the right products and the right services and the right offers. And so rebuilding that product engine that we can do that and begin to differentiate allows us to do things that won't necessarily just hinge on, can I get an attractive handset. To answer your question, there's nothing wrong with that strategy right now. It's a great strategy. In fact, I would say, if you looked at our portfolio of those customers that we bring on and we offer a very simplified straightforward value proposition to our customers. It's resonating with them that our employees can easily communicate that our advertising is doing a great job of carrying forward that's giving us this market momentum. I suspect the financial characteristics of every single one of those customers, there isn't a competitor that we work with that wouldn't say, I'll take that customer and I'd be happy to have them in my portfolio because they are very attractive. They are returning in a way that's consistent with what we've seen in the past. We're -- as we've said earlier, seen a lot of other goodness that comes into the business on cost. I think one of the things that people are missing is that AT&T prior to us going down this path, was upgrading and managing its customer base and probably a stingier fashion than many of our competitors were. We're now seeing ourselves get back to something that's a little bit more consistent with the rest of the industry in terms of the percentage of our base that's under contract, the percentage of our base that's been upgraded, the level of promotion per net add that we're putting in place, when you step back and look at it in that vein, we're not doing anything that's really out of the norm of the balance of the rest of the industry, but we are coming up from levels that may have been below the norm. And again, we've managed that through a combination of just being smart and how we've applied them, wherein some instances, we move people into more lucrative offers, move them up the ARPU scale as we're investing more in them. And in some cases, we've been able to offset that with effectiveness and efficiency in other parts of our business, including reduced calls, lower churn, higher customer satisfaction that leads into purchases of other products. So I feel very comfortable with the overall equation right now. And I frankly believe we still have a few more cycles to fine-tune it even a little bit further.

I want to talk about another big consumer, really residential opportunity for AT&T, which is the fiber opportunity. I believe your fiber network passes something around 15 million customer locations right now. You are targeting to ultimately get to 30 million by 2025. That would still only be about half -- roughly half of the customer locations in the AT&T Wireline footprint. Question we've gotten is, how did you decide what the right target was? Why is it 30? And what really dictates the pace at which you build out fiber?

It's a really good question, Brett. I think I've said this before, I don't think I'm breaking any news here. But I think right now, we have cast this in a way where getting this kind of an engine ramped up to go from building 3 million to 4 million to 5 million homes passed, working it through the supply chain, all the logistics that are necessary to build network, it's not a real simple undertaking. And as I've said, my goal is I feel very comfortable, we have places we can go to build 30 million homes right now on an owned and operated basis. They have very attractive returns in the mid- to upper teens. We're demonstrating every day with our existing base that we can operate that more effectively. We've now crossed over places where we have scale, where we are taking cost out of the business based on fiber replacement to old infrastructure. We're seeing that flow through in lower call rates, lower repair rates, better churn, all those things are going to continue to give us goodness moving forward. Do I think there's a magic number of 30? No, I don't. I think there's a combination of things. One is I'd like the investment base to recognize the good work we've been doing and then, in fact, we are building and adding value back to our share owners. And when they start to recognize that in the form of the equity and the stock, do I believe my credibility and the team's credibility goes up? Yes. Do I believe there's going to be other opportunities for us to come out as we hit those scaling metrics that we have in place, the supply chain metrics that we might be able to go in and say, there's more that we could possibly attack. I'd love to be in that position to do that. And I've kind of put that out as a challenge to the management team to say, the only thing that stands in the way between you doing 30 million and doing more is your execution and performance. And similarly, I think there's probably places that we can go where we haven't defined the model. Things are changing around us. And we can possibly do something either with partners or under different models where it may not look like in an effective return today, but circumstances may change that, in fact, make it an effective return. I don't want to prognosticate as to whether the infrastructure bill passes, there's a degree of uncertainty there. But even in its current form, it actually does make its way into law that's going to change the landscape of the broadband business in this country. And it will also change my posture and point of view of where we should be playing as a company. And as a result of that, I would lean into it. And I'd probably be coming back to you and say the 30 isn't the right number.

Speaking of execution, execution really has 2 pieces. It's deploying the network and then it's driving penetration of that network. I believe you had about 5.4 million fiber subscribers as of your most recent quarter, that's about 35% penetration. What do you think is the right target for your fiber penetration? And how are you going to get there?

Look, my -- if I look at what's happening right now and kind of where we are in our maturity scale, one of the things I'm most excited about is our new net adds to fiber right now, good -- almost 80% of them are new to AT&T. So we've now gotten to this place where we've been managing the base, and we're now shifting over where we've got a lot of new customers coming in. And in fact, as you saw last quarter, we're starting to get ourselves to a point where that consumer business is a growth business today despite the legacy drag on historic telecom products, POTS and the like of legacy data products that the fiber growth is beginning to outstrip that where we have real growth in that business, and we're now starting to turn that corner to real EBITDA growth in that business. And so I would tell you, as I step back from that, we're going to see consistent growth, but I'm not going to be happy until we have a 50-50 share split in places where there's 2 capable broadband providers. And I think there's no reason with the product as capable as what we have out there and how fiber performs, and what we're able to do and the differentials we see in our customer satisfaction to our most significant competitor often cable in those markets where we're looking at 10, 15 points of difference in satisfaction levels between other players in the market and ourselves that we shouldn't be able to achieve that over time. What I know is that our business case is that we put forward to you in representing the return are much more conservative than that. We've driven to 40% penetration levels to basically be the threshold for us to get to warrant an investment. And we're on that march. Your math on 35% is actually -- it's in the ballpark, but it's low to what the reality is of how we're performing right now sitting here today. And I feel really comfortable with the plans we have in place, especially as we finish this build, where we kind of move away from a little bit of Swiss cheesing in our markets where we've got a pocket here and a pocket here and I now get some scale in a metropolitan area where I can really spend on promotion and hit most of the metropolitan area, which is what we do in the next kind of 1 year, 1.5 years of build, that we're going to be in a much better position in what we're able to do to get those penetration levels.

You had earlier made a slight adjustment to your fiber deployment for this year. You were hoping to do 3 million homes. It's going to be closer to 2.5 million, and you noted some of the well-reported supply chain issues as being a factor. Any update there? Has there been any further disruption in your supply chains and your ability to secure labor?

We gave an update, and I want to distinguish. We kind of gave an update to the homes completed -- locations completed number. We didn't change anything on guidance from an EPS revenue perspective, customer subscriber perspective. We still can work within those numbers. And we're talking about what's probably effectively about a 90-day delay for us to hit those numbers. And it really -- primarily in this case, got to fiber assemblies. The way fiber is built in the distribution network is we engineer it, we provide detailed engineering to our manufacturer. The manufacturer, in the manufacturing facility, pre-splices and pre-assemble some of that fiber before we receive it. So when it goes in, we're doing less field splicing, and we're able to basically put it up in the air or bring it through infrastructure in a way that lowers labor costs coming in. And we were having some supply issues in the factory, partly labor-driven because of COVID, individuals getting sick, not being able to run enough shifts and carry through and partly some raw material issues, but those have been worked through right now. Our deliveries, over the last 30 days, have tracked to what our expectations are. So we feel like we're through that dynamic right now. We should be fine with it. But look, the supply chain is fragile in all levels. It's fragile on everything. Last week, it was the number of generators we're deploying for power backup on cell sites, there's -- we're going to miss a target on some of those by a couple of hundred because there's a resin-based connector in the harness and we can't get the resin in that resin-based connector. It's $15,000 generator that's being held up on something that's a $0.25 part. You see these things popping up left and right every corner of the business. So I don't know what next week brings. We're aggressively managing it. We've got a great supply chain organization. We're a scaled provider with all of our vendors. So we lean into that. We were able to work through the fiber dynamics because we are the largest consumer of fiber in the United States. We use that ability and that expertise to make sure we get what we need to move through. So I feel we're managing through it okay. I don't think there's anything around the challenges we're dealing with that gives me concern on guidance to where we stand right now. But it's going to be choppy and a little bumpy moving forward on some of these things as we move through the years.

Well, I got time to squeeze in one last question. So a year from now when we are hopefully doing this in person, face-to-face and have this pandemic behind us. What do you expect AT&T will have accomplished over that 12-month period? And how do you think the company is going to be positioned as you're looking into 2023?

Yes. It's a really good question, Brett. Maybe I'd back up to where I was this time last year and sitting here this time this year. And I think the architecture of what we're going to be talking about this time next year is drafted, and it's in front of everybody. And that drafting is a very focused communications company, and it's a media company that's combined with another asset that our share owners will own 71% of that will have momentum in the direct-to-consumer market in a way that it's going to be complementary to the great progress we've made already that I think there's going to be upside and multiple expansion that occurs as a result of that. You heard David talk about that in his previous dynamic with you. Our communications company is going to take the strong execution it's had, and we're going to be on to the next chapter of that where the distractions of -- kind of reshuffling the deck chairs, getting these transactions done, we're done, we're announced or we're in the process of closing, and now we're about executing and being the best in what we need to do in communications. And I believe when I'm sitting here next year, I'll be talking about that, and we'll be spending our time talking about the -- what's beyond basic connectivity. The connectivity plus and what our business can do to extend another 1% to 2% of revenue growth because we've done the right things on product software work that allows us to do things that are unique about AT&T that those are manifested in the brand positioning in the market, and how we've recrafted the brand, and how we're going to market in the right segments and the right approach as a result of that. So I see -- next year, we're not going to be talking about restructuring. We're not going to be talking about transactions. We're going to be talking about how the management team has executed on a very focused strategy and a very lean and focused business in the best parts of the communications sector. And I'll be -- if I think about where I sat last year and maybe some of the anxiety of the pieces that had to be put in place which you've now seen and are all in the public domain over this quarter this last year. I think about my anxiety about showing up next year is not anywhere near what it was this time last year because I know the plays, I know what we need to do. There's uncertainty that's hanging in the stock right now. It's uncertainty because of, will the transaction get approved in a regulatory environment, it's uncertainty because of forward-looking views on EBITDA. It's uncertain about what the direct-to-market strategy will be for the media company that David talked about. It's uncertain because of whether it will be a spin or a split when we ultimately close that transaction. The good news is, all those things that I talk about uncertainty are in our control. They are all things that we, over the course of the next several months, we'll resolve, and we will put checkmarks next to it. And the market will now have less uncertainty and they will know the path, and I believe that unlocked value got a great dividend on the stock right now. We're going to carry it forward. It's something that's still competitive. They're going to see it for what it is, and they're going to say, now is the time that I should be an owner of AT&T. And I look forward to next year because I think we'll be turning that corner and in that position.

Well, I look forward to that update as well. Thanks so much for being with us, and we really appreciate it.

Thanks for having me. And Brett, I appreciate the time.