AT&T COO Jeff McElfresh during an investor conference this week highlighted a basic strategy for the telecom giant to increase profits that includes leveraging its connectivity to better target the mid-market enterprise space. The insight is likely music to the ears of investors but lacked the depth of its past efforts and that of a forward-looking 5G operator.

“I will tell you our mid-markets, AT&T still today does not enjoy any shared leadership in the mid-market enterprise space,” McElfresh said at this week’s Morgan Stanley Technology, Media, and Telecom Conference. “And we've got work to do on that and we're underway right now this year doing that with an organization dedicated to it.”

That organization is approaching the market with a use case instead of a specific technology mindset.

“Our enterprise customers when we meet with them they don't approach us with a I want to get into the 5G game,” McElfresh said. “They approach us with what's on their mind.”

McElfresh explained that for CIOs at AT&T’s larger enterprise accounts, what’s on their minds are cybersecurity, multicloud, disaster recovery/service continuity, and support for a remote hybrid workforce. However, AT&T’s approach to monetizing those opportunities is pretty basic.

“As we think about it at AT&T, our 5G solutions that we're offering, I think growth is actually going to come tonnage wise from our ability as a provider to leverage 5G in the right areas of a solution. So us serving architecture to an account could be a combination of fiber to 70% of their locations and a 5G access point at 30% of their locations.”

It’s hard to fault AT&T for this approach as it’s spent the past year trying to shed a free-spending era when the operator was for a short period of time a significant player in the global entertainment space. It has since retrenched to a focus on core network connectivity assets like fiber and 5G connectivity.

That same solution model bleeds over into how AT&T is approaching connectivity. McElfresh said its enterprise customers are not asking for anything specific when it comes to connectivity – fiber, 5G, 4G LTE – they just want something that fits their needs.

They say, “here's my problem, serve me, and I bring a serving architecture that's a hybrid mix of fiber and a fixed-wireless access solution,” McElfresh said. “And for them, it's kind of seamless. Their service and applications work across both. I, within my network, make that seamless. And so you'll see us, I think, spend a little bit more energy in the areas of those kinds of use cases.”

McElfresh did note that the carrier expects its slow roll into the private 5G network and mobile edge compute (MEC) space will begin to pay dividends, though it remains cautious on the near-term impact.

“As we start to see more 5G chipsets getting embedded in edge equipment – not just devices that we use with our hands – I think you're gonna begin to see a larger, growing revenue stream from the 5G spectrum deployed in the enterprise space with those basic services,” McElfresh said. “[It] doesn't require a lot of really high science and private networking, for example, to achieve that monetization. I'm encouraged because that's the trend that I am seeing in the discussions with our largest enterprise accounts.”

McElfresh also played to his audience by reiterating the carrier’s plans to slash capex from a high of around $24 billion this year to around $20 billion starting in 2024. He explained the main drivers for that will be tapering down spend on its C-band spectrum deployment to support its 5G network and on its fiber deployment.

“We've got to make our capital dollars stretch a bit further, operationally, with our wireless build, which we are seeing in better than expected C-band coverage performance and our wireless investment last year,” McElfresh said. “All of this goes into our ability to get better return on a lower capital number next year.”

AT&T’s capex plans mirror those of rival Verizon, which is guiding its capex down from a high of $23.1 billion last year to support its own C-band deployment, to $17 billion in capex for 2024.

AT&T is also looking to cut costs through further operational efficiencies that will allow it to cut headcount. McElfresh boasted that AT&T had cut 30,000 positions over the past two years, including 7,000 job cuts during the final quarter of last year.

“And no headlines, no service disruptions. Performance, the key operating metrics look really great in the fourth quarter, the trends look fantastic, and you should expect us to continue to find ways to get more efficient because I'm here to tell you we are not best in class when it comes to cost structure. We still have room to improve and that's why it's really my main charter in the company,” McElfresh said.

An AT&T spokesperson later explained that some of those 30,000 positions were from divestitures, though the carrier couldn't provide details. According to the carrier's Securities and Exchange Commission (SEC) filings, it has reduced its headcount by approximately 67,000 employees over the past two year, ending 2022 with just under 163,000 employees.

UPDATE: This story has been updated to add a comment from AT&T on its headcount reductions and to add more clarity on AT&T's total number of employees over the past two years.