AT&T’s Q1 Broadband Sub Results Get Boost from Fiber

Telco's fiber and IP-based broadband gains continue to offset ongoing declines in its legacy DSL business. 

  • AT&T

 

AT&T is on track with its fiber-to-the-premises (FTTP) build out strategy, reporting that more new subscribers signed up for the service during the first quarter of 2021. The telco added 235,000 more fiber broadband connections in the first quarter, giving it a total of nearly 5.2 million.

“AT&T Fiber net adds were strong and penetration levels continue to expand,” said John Stankey, CEO of AT&T, during the first-quarter earnings call. “We’ve added more than 1 million fiber subscribers in the last four quarters.”

IP-based broadband also had a good showing in the first quarter. AT&T added 90,000 IP customers, up from a loss of 32,000 a year ago. As expected, the telco also lost another 39,000 DSL subscribers, dropping that total to 527,000.

Total broadband subscriber net adds in the quarter were 46,000, up 0.8 percent, an improvement over the loss of 74,000 a year ago. AT&T Fiber, which is marketed to more than 14.5 million customer locations, added 235,000 new net customers.

AT&T's FTTH subscriber saw continued growth in the first quarter of 2021.
 
 

AT&T said the growth in fiber broadband subscribers more than offset losses in slower-speed services.

Consumer wireline revenues were $3.1 billion, down 0.4 percent year over year due to declines in legacy voice and data services and other services. These decreases were partly offset by a 4.6 percent increase in IP broadband revenues, which reflect fiber subscriber growth and higher IP broadband ARPU resulting from an increase in fiber customers and pricing.

Stankey remains confident that the telco can reach even more homes with its FTTP service throughout 2021.

“We’re on pace to build out fiber to another 3 million consumer and business customer locations this year,” he said.

Raising Customer Share, Satisfaction

Though AT&T Fiber is not available in all AT&T wireline service markets yet, the service provider is seeing market share growth and adoption in the markets where it offers FTTP broadband.

Stankey did not cite specific markets where  AT&T is offering broadband bundles, but noted that when it rolls out FTTP, it resonates with customers whose choices were likely limited to lower-speed DSL or a cable modem service.

“I've not seen share movement on typical products like this as rapidly as we're able to get share movement once we deploy an area,” he said.

Likewise, AT&T found that the presence of FTTP is affecting customer churn and overall satisfaction.

“It's driving churn down,” Stankey said. “It's driving engagement and satisfaction levels higher. We're going to get the benefit of that over the customer life cycle.”

As AT&T brings fiber into a market, the service provider is finding ways to increase customer stickiness by offering service bundles. The service provider continues to offer customers the ability to purchase a bundle of wireless and wireline broadband service.

“We've had really good success at pairing our wireless services with our broadband customers,” Stankey said.

AT&T’s direct-to-consumer video products are also having an impact when coupled with broadband. The company’s direct-to-consumer subscription revenues rose about 35 percent in the first quarter.

“We're having really good success bundling our entertainment direct-to-consumer product with broadband, and we're seeing really high marks from customers in doing that,” Stankey said. “It feels like a forward-leaning entertainment product and service coupled with broadband, where we know that when we bundle, we drive churn down.”

Enabling Home Network Visibility

AT&T may be losing broadband market share in places where it only offers DSL, but in markets where it does offer FTTP, the telco is keen to take advantage of ways to enhance customer experience inside the home or apartment.

By leveraging the Broadband Forum-led TR-69 protocol, service providers such as AT&T can conduct remote and safe configuration of network devices or customer premises equipment (CPE). Recently, the Broadband Forum introduced the new TR-069 self-testing tool.

The enablement of self-testing for TR-069 provides operators and vendors with the ability to perform test procedures themselves that normally would be carried out by a qualifying test lab. It also ensures that vendors and original equipment manufacturers (OEMs) can prove their devices work, which offers providers a benchmark they can use with vendors and their customer integrations.

Although he did not provide any specific details, Stankey said the company is “thinking beyond the side of the house” where its fiber connects to help customers who are adding more IP-enabled devices access content and conduct telework.

“We're now starting to work really hard on how our product and service can help the customer inside the house,” Stankey said. “That's the result of making our product look more consistent, more reliable, and perform better. And I think we're in the early innings of that, frankly.” 

He added that helping customers manage their home networks can enhance AT&T’s competitive stature in places where it offers fiber service.

“It makes our product and service work better,” Stankey said, adding that AT&T has “a really interesting opportunity to start differentiating the product and service offer moving forward. I'm optimistic about that, coupled with our fiber infrastructure, as we move into '22.”

 

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