AT&T eyes nearly $48 billion network investment in post-media venture

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By Sheila Dang

(Reuters) – AT&T Inc plans to invest about $48 billion through the end of 2023 to expand its fiber and 5G wireless internet services, the U.S. mobile operator said on Friday, detailing the vision of the company following the unwinding of its media assets.

After facing shareholder skepticism about its costly quest to become a media and entertainment company, AT&T is working to merge its WarnerMedia unit with Discovery Inc in a deal expected to close in the second quarter. The company plans to refocus on its core business, namely offering Internet and telephony services.

“As the closing of the agreement with WarnerMedia approaches, we are close to the starting line of a new era for AT&T,” AT&T Chief Executive John Stankey said in a press release ahead of a presentation. to analysts on Friday.

AT&T said it expects annual capital investment to be in the range of $24 billion this year and in 2023. It will then decline to $20 billion beginning in 2024.

The company is working to double its fiber optic internet availability to reach 30 million homes in the United States and expand its 5G network to cover more than 200 million people.

AT&T also provided full-year financial guidance on Friday that excludes WarnerMedia’s Xandr business and advertising unit, which AT&T agreed to sell to Microsoft in December.

The company said it expects low-single-digit percentage growth in total revenue in 2022, unchanged from its previous outlook.

It also provided an outlook for 2023 for the first time, with continued single-digit percentage revenue growth and adjusted earnings per share of between $2.50 and $2.60.

After closing the deal with WarnerMedia and Discovery, the company expects to pay just over $8 billion in total annual dividends, AT&T said.

Free cash flow for standalone AT&T is expected to be around $16 billion this year and around $20 billion in 2023.

(Reporting by Sheila Dang in Dallas; Editing by Nick Zieminski)

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