AT&T says customers are demanding fiber broadband

AT&T will increase its investment in fiber this year and focus on filling in areas where the company already has fiber to a neighborhood but hasn’t yet expanded to fiber to the home. It will also focus on buildings where it might have dedicated access to one customer but can fairly easily add new customers in the building at a lower cost.

Speaking at the Deutsche Bank Media, Internet and Telecom Conference today, AT&T CFO John Stephens, who will retire at the end of the month, said that AT&T believes it benefits from fiber deployments in three ways:

  • first, it provides backhaul for the company’s wireless services;
  • second, it delivers fiber to the premises for residential customers; and
  • third, it delivers fiber to enterprise customers.

“We have the opportunity to use fiber multiple ways to generate customer value and revenue opportunities for shareholders,” Stephens said.

When asked why AT&T believes it’s a good idea to expand its fiber footprint in 2021 after slowing its expansion in 2020, Stephens said that after the third quarter of 2019 the company did ease up a little on its fiber expansion to focus on bringing down its debt. But now that it has accomplished that goal, the company wants to expand its fiber footprint to meet customer demand.

Stephens added that the Covid-19 pandemic has put more focus on working from home and on two-way video conferencing, which requires decent uplink and downlink speed that fiber can deliver. “Because of Covid and other issues we believe now is the right time to take fiber to the next step,” Stephens said.

Related: AT&T CEO: It's the middle innings for fiber build out, but the pace is picking up

Stephens also compared migrating customers from lower speed DSL service to fiber as being similar to how the company switched customers from landine dial-tone phones to mobile phones. “We are now replacing DSL with fiber. It’s like replacing dial-tone with mobile,” he said, adding that the company has about 80% of its broadband customers on higher speed VDSL or fiber vs. regular DSL. 

AT&T’s fiber customer penetration rate grew from 28% in the first quarter of 2020 to 34% in the fourth quarter.  The company markets its fiber network to more than 14 million customer locations and that 90% of all broadband customers on AT&T’s fiber network subscribe to speeds of 100 Mbps or more.