AT&T entertainment chief John Stankey said that Hurricane Harvey is having an immediate impact on his company’s bottom line.
“As Comcast indicated today, some of this is being driven because they have got huge metropolitan area that's just gone underwater and there has been a lot of homes lost and they are major provider there as are we,” Stankey said, speaking at the Merrill Lynch Media, Communications and Entertainment Conference Thursday in Los Angeles. “Houston is one of our wireline franchises and markets and one that we actually do quite well on from a share perspective. So I would expect there is going to be some influence of those types of things and they tend to be temporal.” (A transcript of Stankey’s remarks was obtained from Seeking Alpha.)
Stankey stopped short of putting a specific number on the third-quarter attrition, as his counterpart, Comcast residential products head Matthew Strauss, did on the same stage hours earlier. Strauss predicted that Comcast would lose as many as 150,000 pay-TV subscribers in Q3. Comcast stock plunged immediately after Strauss made those comments.
“You see customers who obviously lose their home make a decision to disconnect the service and then they go through a cycle of finding someplace else to live,” Stankey added. “And so there isn't always perfect timing. One day in and one day out. It tends to lag, and we have seen these disasters before. But I am sure that there will be some pressure within the quarter for those people who have subs in Houston, given the size of the metropolitan area and the breadth of damage that will be in there that we will experience as well.”
Beyond the third-quarter hit to subscriber numbers, Stankey said telecoms are still trying to figure out what kind of capex will be needed to recover in the Houston region long-term.
“We have put a lot of infrastructure in the ground,” he said. “We are a huge capital investor every year. And there's a lot of infrastructure that was exposed to high winds and water and that typically means damage. And obviously, we don't know what the impact of Irma is going to be at this point, what's going to happen. We do know that Harvey's damage is widespread. And it takes a little bit of time to assess it. And I would expect, as we get through there and understand it we will be stating what the impacts to the business are as a result of that.
“Now probably the closest corollary we can give to the breadth of the Harvey impact is Katrina,” he added. “And you know, I will tell you from a rebuilding perspective, that's a multi-year commitment. It's not a fix it in 90 day kind of thing.