Exclusive: AT&T considers cellphone plans subsidized by ads


© Reuters. FILE PHOTO: John Stankey, CEO of WarnerMedia poses as he arrives at the WarnerMedia Upfront event in New York

By Sheila Dang, Helen Coster, Krystal Hu and Kenneth Li

(Reuters) – AT&T Inc (N:) is considering offering wireless phone plans partially subsidized by advertising as soon as a year from now, Chief Executive John Stankey said in an interview on Tuesday.

The move, which has not been previously disclosed, underscores AT&T’s commitment to the advertising business as the U.S. phone carrier reviews its portfolio to identify assets to sell in order to reduce its debt load. AT&T is considering selling its advertising-technology unit Xandr, sources familiar with the matter have told Reuters.

“I believe there’s a segment of our customer base where given a choice, they would take some load of advertising for a $5 or $10 reduction in their mobile bill,” Stankey said.

The planned launch of an ad-supported version of AT&T’s video-streaming service HBO Max next year will serve as a “foundational element” that will provide new advertising inventory, and would be key to new phone plans supported by ads, Stankey said without offering details.

AT&T has invested in developing targeted advertising on its own media properties using data from its phone, TV and internet customers, but the company has been “slower in coming up the curve” on developing a marketplace that would allow advertisers to use AT&T data to target other media companies’ audiences, Stankey said.

Stankey, who last week penned an op-ed for Politico stating that the U.S. government should provide subsidies to encourage companies to build fiber broadband networks in underserved areas, said in the Reuters interview that AT&T believes it could double its fiber footprint if it had the economic incentive.

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Fiber or fiber optics are thin cables often installed underground that allow companies to deliver internet services to homes. AT&T uses fiber to deliver internet to homes and businesses as well as to power its 5G network.

AT&T’s fiber currently passes 18 million homes in the United States. The company could grow that number by 3 million to 5 million homes per year, he added said.

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