AT&T returns to positive broadband growth, fiber subs reach 8M

AT&T in the third quarter saw the return of positive broadband net additions, gaining 15,000 consumer wireline customers as fiber adds snuck above copper losses.

CEO John Stankey attributed the upswing to Internet Air, its recently launched fixed wireless home internet service, which as of August is live in more than a dozen markets across the U.S.

“While it will primarily act as a targeted catch product, we’ve been pleased with the positive early reception and have already added about 25,000 subscribers,” he said on the earnings call.

For fiber, AT&T added 296,000 net customers, making its total fiber subscriber count surpass the 8 million mark.

Although net additions were down from 338,000 in the year-ago quarter, fiber penetration reached 39%. Total non-fiber subscriber losses were 281,000, excluding AT&T’s DSL metrics.

AT&T executives also spoke about average revenue per user (ARPU) for fiber, which jumped 9% to $68.21.

CFO Pascal Desroches noted the ARPU growth comes from an uptake in customers choosing higher speed tiers. The operator has also seen “measurable improvement” in year-over-year fiber churn “despite recent pricing action.”

Commenting on the migration to higher speed plans, Stankey said “there’s a long way for that to run.”

“As we’re deploying today, you know at a minimum on the new build we’re putting in 5-gig networks,” he said, explaining customers “have a lot of room to go from maybe their migration into a one-gig product, ultimately moving that to a two and a half or a 5-gig product.”

As consumer wireline growth picked up, business wireline revenue declined 8% year on year to $5.2 billion. AT&T attributed the downward trend to lower demand for legacy voice and data services.

“Overall, business wireline remains in transition as we’ve moved from legacy products to next generation connectivity products,” Desroches said, adding the big picture of AT&T’s enterprise unit looks “somewhat different” when considering “the increasing strategic importance of business wireless to these various accounts.”

Third Bridge analyst Jamie Lumley commented AT&T’s fiber growth continues to be a “bright spot,” as the company aims to stimulate consumer wireline growth and “stabilize the decline in B2B wireline revenue.”

“We’ve been hearing that Verizon is still the most nimble competitor when it comes to business solutions, but AT&T has a relatively strong position vs T-Mobile as the company continues to build out its enterprise sales motion,” said Lumley.

Q3 financials

Consolidated revenue went up 1% year on year to $30.4 billion. Consumer wireline revenue increased 4.6%, from $3.19 billion in the year-ago quarter to $3.3 billion.

Broadband revenues jumped nearly 10% to $2.67 billion, due to fiber revenue growing 27% to $1.6 billion. Non-fiber revenue dipped 9% to $1.05 billion.