AT&T Shows Steady Growth – Inside Towers

AT&T (NYSE: T) reported solid progress in the third quarter on its two strategic initiatives – 5G and fiber. Its 5G mid-band coverage, mainly in C-band, now extends to 100 million people. The company expects to cover 130 million POPs by year-end 2022. That figure is nearly double the expectations it had at the beginning of the year. AT&T grew its wireless postpaid and prepaid subscriber base to 102.8 million, up almost 4 percent from 3Q21, with nearly 964,000 postpaid net adds in the quarter, bringing year-to-date net additions in 2021 to three million. The company also reported 102 million connected devices making it the largest IoT service provider in the country. 

Wireless service revenues for the quarter grew 5.6 percent YoY to $15.3 billion while wireless EBITDA increased to $8.5 billion, up 5.5 percent from 3Q21. The company said the 3Q22 marked its highest wireless service revenue growth year-over-year in more than a decade, and now expects to achieve 2022 wireless service revenue growth at the upper end of the 4.5 to 5 percent range.

AT&T continues to invest in building out its fiber-to-the-home network that it expects will attract and retain customers. Of the total 13.8 million broadband connections at the end of 3Q22, fiber accounted for 6.9 million or just over 50 percent for the first time. The company says the results for the quarter confirm the traction its fiber strategy is gaining,  posting its 11th straight quarter with more than 200,000 fiber net adds, with 338,000 net adds in 3Q22. 

AT&T says it is connecting more customers in new and existing markets, both taking share from cable companies and converting more of its existing copper-based broadband subscribers to fiber. With many subscribers opting for higher speed fiber plans, fiber ARPU is up eight percent YoY to $62.62 with profitable growth in its overall Consumer Wireline business. Of the $2.4 billion in broadband revenues, fiber broadband accounted for $1.3 billion, up 31 percent from 3Q21.

The company reports that it is approaching one million fiber subscriber net adds for the year and has added nearly 2.3 million fiber passings through 3Q22 to bring its total homes passed to 18.5 million. Management says it is on track to achieve its target of 30+ million passings by the end of 2025.

During the 3Q22 earnings call, some analysts asked if there was any substance to reports that AT&T might consider a joint venture to build out fiber in markets outside of its operating territory. AT&T President and CEO John Stankey was non-committal other than to say that it behooves him and his management team to explore options and consider opportunities if such arrangements are within the company’s operating technical and economic objectives.

Another question was raised about whether AT&T would expand its fixed wireless access deployments like Verizon and T-Mobile. Stankey replied, “I don’t know that anything has changed in fixed wireless. It has a place in our portfolio. That place is not broad-scale deployment in every operating territory and geography that we operate in. … I’d rather take one million new fiber customers a year than one million new fixed wireless customers a quarter. The value equation of those one million fiber customers is a far superior value equation for the long haul for our shareholders. … Fixed wireless will be that answer in a small number of geographies and applications and homes. It will not be to our entire nationwide base.”

The company did not update any financial guidance but confirmed it is on track to deliver the previously stated total $24 billion in capital expenditures for the year.

By John Celentano, Inside Towers Business Editor

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