Simon Flannery - Morgan Stanley & Co. LLC
Thanks a lot, good afternoon. John, can you talk a little bit about 5G in more detail? You've got a number of trials going on. It looks like you're basically committing to a nationwide rollout here. So how are the trial results going, and how should we think about the shape of your deployment 2018, 2019, and 2020? It looks like you're increasing your locations, the high-speed locations 20 million, 8 million of those come from fiber. The balance of 12 million is I guess a mix of some of the things you describe, but it seems like 5G is going to be a big part of that. So talk us through what we've seen so far that gives you the confidence. And then what's the shape of that and the investment over the next couple of years? Thanks.
John J. Stephens - AT&T, Inc.
So we've done a couple of test overlays – more than a couple, a large number. We used LTE-LAA and other capabilities in our network out in San Francisco and got 750-meg speeds on the tests we did out there. Even if you take 10% of that to be normal fully loaded network speeds, you'd still have 75-meg speeds. We think that's pretty tremendous. We did a testing in Austin too, one in the same base where we combined carrier aggregation, MIMO, I think we used LTE-LAA there. And when we did that, we had phenomenal speeds, even I think as good if not better than we had in San Francisco. In addition, we did a millimeter wave, 28-gig millimeter wave test there and got a point-to-point test over 1-gig speed. So all of these things are things that the network team has already done, they've already been successful with.
Based on the tests that we ran in Austin and San Francisco, we're deploying out to 20 cities right now. We hope to have them done by the end of the year, near the end of the year. These capabilities with carrier aggregation, LTE-LAA, and MIMO capabilities, and with those we are optimistic that we're going to get flow-through speeds that could cap 400 megs even by the end of the year and with that, on a fully loaded market, use a lower percentage. But those things are going on now. When you take those plans out a few years, we have a plan to hit the largest 30 cities with that capability. That 5G capability will overlap some of the, if you will, IP fiber-based services we have. So we didn't want to double count, so those numbers are overlapping, but it will be very great.
When you talk about 5G from a millimeter wave perspective, we expect to continue testing that as we have in Austin and other places. I think everyone is aware we've got a transaction waiting for approval in front of the FCC on the significant holdings of a 39-gigahertz millimeter wave spectrum. We're moving forward on that. We expect the standards to be out in 2019 and equipment to be out. Following that, that is one that we will be one of the leaders on, and it will be in addition or in connection with the cities build-out that I just described. So I hope that gives you a sense of why we're so comfortable with putting that in greater than 50 million locations. Some of them will be served with both wireless or fiber-to-the-prem or fiber-to-the-business. But we are confident that in total, counting each of the locations only once, we'll have over 50 million.
Simon Flannery - Morgan Stanley & Co. LLC
Okay. And so you have you proved out the business model on the millimeter wave yet, or is that still something you still need to work through?
John J. Stephens - AT&T, Inc.
I'll say it this way. I think we proved out the business model that businesses need speed and capacity. That's been proven out. We need to do more specifically with the 39-gigahertz build-out. But from what we've learned in our Austin trial, we're optimistic that it will work out. Now remember, we have extensive fiber throughout the country, not only in our local exchange, our traditional service areas, where we have extensive fiber, fiber into neighborhoods, fiber nodes, fiber to businesses. But even on a national footprint, we have extensive fiber because of our legacy companies. And so we have a unique benefit compared to many others as we build out a wireless IP capability. Others do not have the ability to rely on the built-in fiber holdings that we have, and I think that's a unique advantage. We will continue to modify and adjust the build plans and the product offerings as customers direct us, but we're confident we're going to be able to do this in a very profitable way.
