AT&T's long goodbye to DSL continues as the company confirmed that it has halted the sale of DSL to new customers amid a greater focus on fiber-fed and wireless broadband services.
"We are focused on enhancing our network with more advanced, higher speed technologies like fiber and wireless, which consumers are demanding," AT&T said in a statement. "We're beginning to phase out outdated services like DSL and new orders for the service will no longer be supported after October 1. Current DSL customers will be able to continue their existing service or where possible upgrade to our 100% fiber network."
As spotted by a user on the DSL Reports message board, AT&T recently sent a billing notice about the decision to no longer accept new DSL Internet orders starting October 1. The notice also said that existing DSL subs will no longer be able to make speed changes to their respective DSL service.
Greater focus on fiber, fixed wireless
AT&T's decision to halt DSL sales also follows the company's aggressive stance on fiber-to-the-premises (FTTP) network rollouts and an increasing emphasis on fixed wireless, at least where it makes sense.
On the fiber side, AT&T introduced on Sunday (October 4) new pricing on three speed tiers of its residential FTTP service (100 Mbit/s, 300 Mbit/s and 1 Gbit/s) that can be bought without bundling in other services or be saddled with usage caps. The built-in unlimited data policy across those tiers effectively removes an additional cost of $30 per month that was once tied to AT&T's unlimited broadband data option.
That price change also comes soon after AT&T CEO John Stankey told a Goldman Sachs investor conference that "priority number one" is investing in fiber for 5G and FTTP services. The new prices are also an indication that AT&T intends to ramp up its drive on FTTP sales in the wake of a recent study showing that many of AT&T's new subs were coming from existing customers upgrading to fiber rather than from stealing share from cable operators.
Still, AT&T Fiber has been a growth story for the company. AT&T Fiber added more than 220,000 FTTP subs in Q2 2020, extending that total to 4.3 million (with almost 2 million of them on 1-Gig speeds).
The decision to continue the phase-out of DSL also arrives as AT&T starts to put more emphasis on fixed wireless broadband, particularly in some rural parts of the nation. In May, an AT&T SVP told investors that the company covered about 880,000 customer locations with its LTE fixed wireless platform, with an intention to ramp that up to 1.1 million locations by year-end. That general effort traces back to AT&T's participation in the FCC's Connect American Fund Phase II program.
Unlike Verizon's approach with 5G Home, AT&T's current fixed wireless broadband service is delivered on 4G, but limits usage to 250 gigabytes per month before overage charges apply. AT&T's fixed wireless offering starts at $49.99 per month with a 12-month contract, along with an option to bundle in DirecTV satellite TV service starting at $109.98 per month.
Behind all of that activity, AT&T has also been a vocal supporter of the Broadband DATA act, which aims to create a more accurate, detailed picture of broadband availability and has been pushing for policies that give equal weight to wired and wireless options to subsidy programs.
Eroding DSL subscriber base
Even before AT&T scrapped sales of DSL to new subs, its DSL sub base had been eroding steadily – losing almost 350,000 subs over the past couple of years. In Q2 2020, AT&T shed 23,000 DSL subs, ending the period with just 463,000. A similar story is occurring at Verizon, which added 28,000 Fios Internet subs in Q2, but ended up losing a total of 13,000 total broadband subs when DSL losses were included.
AT&T's situation with DSL also seems to fit into a broader strategy underway at the company that is placing less emphasis on services that rely on technologies that have grown long in the tooth.
In April 2020, AT&T halted the sale of U-verse TV, its legacy IPTV service, as it pushes ahead with AT&T TV, a big-bundle, contract-based streaming pay-TV service that runs on a company-supplied Android TV box, as well as AT&T TV Now, its no-contract, smaller bundle OTT-TV service.
AT&T is still selling satellite TV service, albeit with an emphasis on more rural parts of the US that do not have solid broadband options. Meanwhile, rumors have re-emerged that AT&T is looking to unload DirecTV.
- AT&T sizes up its pay-TV legacy
- AT&T halts sale of U-verse TV
- AT&T on track to cover 1.1M rural locations with fixed wireless LTE this year
- Bulk of AT&T Fiber Sub Growth Coming From AT&T – Analyst
- Global broadband access equipment revenues rebound in Q2
- Footprint expansions boost cable's broadband growth
— Jeff Baumgartner, Senior Editor, Light Reading