AT&T COO Jeff McElfresh on software's importance for growth

AT&T's investments in physical infrastructure for fiber and 5G are the telecom company's top priority, but that doesn't mean it's neglecting software improvements, COO Jeff McElfresh tells Axios.

Why it matters: Fresh off the WarnerMedia spinoff, AT&T has returned to being a traditional telecom business. The $132 billion company's M&A strategy will focus more on investments and partnerships with software businesses, the executive says.

• "The future for us is not simply growing revenues with the requirement to invest heavy capital, like fiber in the ground, but rather enable revenue growth via software platforms that integrate with AT&T's network," McElfresh says.

The intrigue: AT&T customer surveys have shown that consistency of service —coverage and speed — is key. But another major customer need, per McElfresh, is security. "Is my connection safe?" and "Is my information safe?" are top customer questions.

• Security has "made its way up north — things like entertainment or value-added services," McElfresh says. "Customer expectations shift, and if you pay attention, you listen to them, it can guide you where you might want to invest some of your product development or some of your partnership work."

Catch up quick: McElfresh is only a few months into his new role, but he's a more than 25-year veteran of AT&T. Before his promotion to COO in April, he served as CEO of AT&T Communications.

• "What I'm focused on is the restructuring of the operating entity to being even more effective than we were over the last two years at addressing growth that's available in the market," McElfresh says. "My direct report team, they're all in new positions. It's a fresh set of eyes."

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