AT&T's fiber fixation continued to drive results in its consumer broadband segment in the first quarter of 2022, as gains in the number of fiber subscribers more than offset losses of customers on legacy non-fiber technologies.
AT&T tacked on another 289,000 fiber-to-the-premises (FTTP) subs in the period, improving on a year-ago gain of 235,000. The company ended the period with 6.28 million FTTP subs.
The gains were enough to clear out a quarterly loss of 284,000 non-fiber subs (including U-verse Internet subs), which dropped totals in that category to 7.56 million subs. The combined result gave AT&T a net addition of 5,000 broadband subs in the quarter, narrowed from the 74,000 added in the year-ago quarter.
Update: Those broadband numbers look a bit different when DSL losses are included. AT&T lost 284,000 non-fiber broadband subs, a figure that does not include DSL. With a loss of 17,000 DSL subs in Q1, AT&T actually swung to a loss of 12,000 broadband subscribers in the period, versus a gain of 46,000 in the year-ago quarter. That 12,000 loss also missed a consensus expectation of a 20,000 subscriber gain, according to MoffettNathanson.
Total broadband revenues reached $2.35 billion, up from $2.20 billion in the year-ago quarter. Q1 fiber revenues hit $1.11 billion (versus $892 million a year earlier), while non-fiber revenues hit $1.24 billion (down from $1.31 billion a year ago).
AT&T added 800,000 fiber locations in the quarter, ending the period with 17 million fiber locations and a fiber service penetration rate of 37%. That's up from a year-ago fiber footprint of 14.6 million locations and a service penetration rate of 35%.
"In fiber, we continue our great build velocity and now have the ability to serve 17 million customer locations," AT&T CEO John Stankey said on today's call, clearly pleased that FTTP revenues are approaching half of AT&T's overall consumer wireline revenues.
He said that momentum is also coming by way of AT&T's new multi-gig packages, but he did not break out how many customers are opting for the company's 2-Gig and 5-Gig offerings.
Fitting in fixed wireless
Stankey maintained AT&T's position on fixed wireless, viewing it largely as a solution for rural areas and as a possible alternative to DSL.
"[As] we watch our copper base of customers, we don't believe a product that's doing sub-100 megabits is going to be a viable product in the market over the next couple of years" based on current customer usage trends, Stankey said.
The use of fixed wireless in DSL locations "will be a substantial step-up in opportunity," he added. "And there's going to be places where the government comes in with subsidy in very less densely populated areas that fixed wireless is going to be the solution."
Though AT&T's consumer wireline business is on the upswing and is a cornerstone of the company's current strategy, such is not the case for business wireline, where revenues dropped 6.7% to $5.6 billion.
Trends in the small and midsized segment are "very strong," MoffettNathanson analyst Craig Moffett pointed out in a research note, but it likewise means that AT&T is struggling in the enterprise services market.
- AT&T launches 5-Gig speeds in all fiber markets
- AT&T lights up multi-gig fiber speeds in dozens of US markets
- AT&T expects fiber sub growth to surge in 2022
— Jeff Baumgartner, Senior Editor, Light Reading