Telcos’ FTTH Drive Helps Improve Broadband Subscriber Situation

Telcos may still be trailing cable operators in the broadband race, but their ongoing FTTH builds could help narrow the divide. 

  • AT&T

Tier 1 and Tier 2 telcos saw varying levels of broadband growth in the second quarter. As an ongoing transition, wireline operators have made building out fiber-to-the-home (FTTH) a key priority.

And while telcos continue to trail their cable counterparts, which have continued to rake in large amounts of subscribers, the FTTH deployments they are doing are having an impact.

Analysts are taking notice. 

“The surging enthusiasm for FTTH upgrades is boosting telco wireline broadband net adds, albeit at relative magnitudes,” wrote Kagan, a media research group within S&P Global Market Intelligence, in a recent report. “While the segment's residential net adds in the second quarter pale in comparison to cable's growth, it represents a dramatic improvement over the second quarter track record since 2016.”

During the second quarter of 2021, the top wireline providers added about 50,000 total broadband subscribers in the second quarter– compared to a net loss of about 140,000 subscribers in the same period a year ago. In all, cable has about 74.7 million broadband subscribers, and top wireline phone companies have approximately 32.7 million subscribers.

In this report, we cover two major types of providers:

Tier-1 Telcos: Traditional telcos are at a crossroads. As more customers want higher speeds, this group is moving to deploy fiber to the home (FTTH) across select markets as their traditional DSL and POTS voice base dwindles.

Tier-2 Telcos: Tier-2 telcos include a diverse mix of players in rural and secondary markets. Like the Tier-1 telcos, several Tier-2 telcos have also been expanding their FTTH footprints.

Look at the chart below to see how telcos performed during the quarter. Broadband Communities developed these rankings from the information in service providers’ earnings reports. 

Provider Total Subs Subs added/lost Broadband Revenues
AT&T 15,481,000 46,000 $3.1B
Verizon  7,263,000 70,000 $2.9B
Lumen (CenturyLink) 4,666,000 -62,000 $723M
Frontier 2,798,000 -22,000 $842M
Windstream  1,131,800 9,500 not reported
TDS Telecom 513,600 11,900 $160M
Cincinnati Bell  437,800 200 not reported
Consolidated  393,480 -4,522 $68M
Shentel  111,475 3,900 $56.2 million

Tier-1s See FTTH Gains

Like earlier quarters, the large Tier 1 telco continued to shed DSL subscribers as customers migrate to either available fiber networks or to cable competitors, which can offer up to 1 Gbps via their existing hybrid fiber coax (HFC) networks.

Amidst the lower-speed losses, AT&T and Lumen made report gains in FTTH again in the second quarter. AT&T added 246,000 fiber subscribers and Quantum Fiber added about 40,000 subscribers who purchased 100 Mbps and higher speeds.

Interestingly, AT&T’s fiber results were the customer mix and how the new services offset DSL losses. 

“Nearly 80 percent of net adds are new AT&T broadband customers,” said Pascal Desroches, CFO of AT&T, during the second-quarter earnings call. “We've reached a major inflection point in our Consumer Wireline business. Broadband revenue growth now surpasses legacy declines.”

Lumen, which is offering FTTH services via its Quantum Fiber brand, added 31,000 Quantum Fiber customers, reaching a total of 746,000. “Our mass markets segment fiber broadband revenue grew 30 percent year over year this quarter,” said Neel Dev, CFO of Lumen.

However, the telco reported that second-quarter 2021 mass markets revenue declined 2.2 percent sequentially.

Meanwhile, Verizon added new 92,000 Fios internet subscribers during the quarter. Matt Ellis, CFO of Verizon, said its results are “supported by strong customer retention, and our Fios Internet customer base is more than 7% higher than a year ago.” He added, “our trailing 12-month total Fios Internet net add performance is the highest since 2015.”

As large telcos continue to see their low-speed DSL subscribers erode, they have set expansive plans to bring fiber to more consumer and business locations.

AT&T has forecast additional FTTH growth throughout this year with the expectation of 1 million fiber net adds for the entire year. Lumen, whose FTTH division will now be known as Quantum Fiber, has FTTH customers and has enabled 2.5 million sites with fiber.

Frontier, Windstream Sharpen Fiber Focus

Tier-2 telcos continued to make progress with their fiber and cable builds. Frontier and Windstream--two telcos that are in the process of emerging from Chapter 11 protection--have made FTTH a growth priority. 

Having revamped its management team, Frontier has set a goal to reach 10 million total locations by 2025 with FTTH. During the second quarter, Frontier built fiber to approximately 157,000 recent locations. Frontier now expects to reach 600,000 new areas in 2021, resulting in about 4 million fiber locations passing by the year’s end.

Being a transition, Frontier’s revenues took a hit in the second quarter. Frontier’s overall data and internet services revenue of $839 million decreased slightly in the second quarter of 2021 due to what it said was declining copper subscribers.

However, fiber is becoming an essential element of its growth plan. Frontier’s fiber broadband revenue was $238 million, up 14.4 percent over the second quarter of 2020. Fiber broadband customer net adds were 12,000, over 8,000 net adds in the second quarter of 2020. As customers continue to upgrade to faster speeds, fiber broadband ARPU was $63.10, up 10.9 percent over the second quarter of 2020.

But the telco is not resting on its laurels. Frontier plans to launch a symmetrical 2 Gbps offering in the first quarter of 2022, for example.

Windstream Kinetic also saw progress during the second quarter. It added 9,500 net broadband subscribers and grew consumer revenues for the sixth consecutive quarter. Also, Windstream grew consumer revenues while expanding gigabit internet service to more than 134,000 new locations

Given the challenges of rolling out broadband in rural areas, Windstream is developing “creative partnerships” to bring fiber internet service to the most rural customers and leverage RDOF funding. Windstream will receive approximately $52.3 million for ten years beginning in 2022 to provide broadband service at 192,567 total locations, or $2,715 in average support per location. It has targeted 271,000 households in Kinetic footprint and was awarded funding for 115,000 homes. Also, Windstream was granted to 78,000 homes in areas wholly outside of our Kinetic footprint.

“This year, we are beginning a five-year, $2 billion investment campaign to bring more fiber-backed connectivity to rural America,” said Tony Thomas, CEO of Windstream, in a letter to shareholders. “As a result of our historical network investments, Kinetic by Windstream grew our broadband customer base for the third consecutive year in 2020, adding 60,000 net new customers, and we expect to do the same this year.”

Consolidated, TDS, Cincinnati Bell, and Shentel Progress

Consolidated, TDS, Cincinnati Bell, and Shentel are progressing with FTTH and cable broadband.

Cincinnati Bell, which Brookfield purchased to become a private company, saw FTTH gains in Cincinnati and Hawaii. During the quarter, it only added 200 new subscribers. Like Windstream and other telcos, Cincinnati Bell has been establishing public-private partnerships with various communities in Kentucky.

The service provider struck an agreement with three counties in Kentucky--Campbell County, Kenton County, and Boone County—to provide FTTH gigabit services. Cincinnati Bell currently offers fiber-based gigabit Internet to 112,000 addresses in these counties. Once the fiber build is complete, 95,000 new addresses in these counties will access 1 Gbps FTTH service.

Over at TDS Telecom, which offers broadband over copper, HFC and fiber, connected more addresses to its network, bringing total broadband connections to 478,700. A key focus for TDS is to expand its fiber addresses to existing and what it calls “growing expansion markets.” As of the end of the second quarter, TDS had 338,000 fiber service addresses. By 2024, the telco will build out its footprint in these announced markets to 657,000 service addresses. On a year-to-date basis, TDS completed 31,000 fiber addresses, adding 18,000 service addresses in the quarter.

Peter L. Sereda, EVP, and CFO for Telephone and Data Systems, said, “fiber is the most economical, long-term solution to deliver the best broadband experience. He added that as a result of building out fiber in its ILEC and CLEC territories, “39 percent of our wireline service addresses are now served by fiber.”

TDS Telecom is no less aggressive in enhancing its cable network, which now has 201,200 addresses. By upgrading the HFC network to DOCSIS 3.1, TDS Telecom provides 1 Gbps speeds in several markets. TDS can offer 1 Gbps speed to 56 percent of its total fiber and cable service addresses combined.

Sereda said that its 1 Gbps service had enabled it to thwart churn and attract new customers.

“The one gig product is an important tool that allows us to defend markets and win customers in new markets,” he said. “In areas where we offer one gig service, we are now seeing 21 percent of our new customers taking this superior product.”

Consolidated and Shentel continue to see broadband gains while they expand their FTTH footprints.

With an eye on fiber expansion, Consolidated Communications saw its broadband revenue grow 3.7 percent year-over-year, reflecting what it said was two years of consecutive years of quarterly year-over-year growth.

During the quarter, Consolidated added about 3,000 consumer fiber 1 Gbps capable subscribers in the second quarter and nearly 7,000 fiber subscribers year-to-date.

In the first half of the year, Consolidated passed another 122,000 locations with fiber-to-the-premises, setting the telco on its way to complete 300,000-gigabit connections by the end of the year. Over 60 towns in CaliforniaMinnesotaNew HampshireTexas, and Vermont have benefited from its five-year fiber expansion plan, which will upgrade more than 70 percent of its service footprint to symmetrical, multi-gig speeds.

A vital element of these builds is the pacts it has made with towns across these states.

“We have completed five public-private partnerships this year. We are well-positioned to participate in any additional funding opportunities that enable us to expand rural broadband,” said Bob Udell, CEO of Consolidated. “In 2021, we have won bids for 16 additional municipal partnerships and have dozens more in the planning stages.”

Over at Shentel, the story is also focused on fiber, cable, and broadband wireless growth. The telco’s Glo Fiber branded FTTH passed 12,000 new locations, doubling the pace of the last two quarters, including the launch of service in the Virginia markets of Roanoke and Lynchburg in April. Meanwhile, its Beam fixed wireless network added over 6,500 passings during the quarter, making it available to over 21,000 homes in seven Virginia and West Virginia counties.

During the second quarter, broadband was a key driver for Shentel, adding more cable, fiber, and wireless high-speed data customers. Cable was the clear leader in the provider’s broadband results with over new 1,900 new subscribers. The rural provider is also progressing with its Glo Fiber FTTH and broadband wireless initiatives as it added 1,600 Glo Fiber and 370 Beam Wireless customers.

“Broadband data net additions for the second quarter were over 3,900, despite a seasonal bump in churn due primarily to college student move-outs in several of our markets,” said Chris French, CEO of Shentel. “The second quarter was a pivotal turning point in the mix of our net additions, with Glo Fiber and Beam now contributing over 50 percent of our net adds. We anticipate this trend will continue over the next several years.”

To keep up with all of the second quarter cable and telcos broadband earnings, make sure to check out our complete broadband report: From AT&T to Shentel: Tracking the Top 17 Broadband Service Providers in Q2 2021.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier-1s See FTTH Gains

Like earlier quarters, the large Tier 1 telco continued to shed DSL subscribers as customers migrate to either available fiber networks or to cable competitors, which can offer up to 1 Gbps via their existing hybrid fiber coax (HFC) networks.

Amidst the lower-speed losses, AT&T and Lumen made report gains in FTTH again in the second quarter. AT&T added 246,000 fiber subscribers and Quantum Fiber added about 40,000 subscribers who purchased 100 Mbps and higher speeds.

Interestingly, AT&T’s fiber results were the customer mix and how the new services offset DSL losses. 

“Nearly 80 percent of net adds are new AT&T broadband customers,” said Pascal Desroches, CFO of AT&T, during the second-quarter earnings call. “We've reached a major inflection point in our Consumer Wireline business. Broadband revenue growth now surpasses legacy declines.”

Lumen, which is offering FTTH services via its Quantum Fiber brand, added 31,000 Quantum Fiber customers, reaching a total of 746,000. “Our mass markets segment fiber broadband revenue grew 30 percent year over year this quarter,” said Neel Dev, CFO of Lumen.

However, the telco reported that second-quarter 2021 mass markets revenue declined 2.2 percent sequentially.

Meanwhile, Verizon added new 92,000 Fios internet subscribers during the quarter. Matt Ellis, CFO of Verizon, said its results are “supported by strong customer retention, and our Fios Internet customer base is more than 7% higher than a year ago.” He added, “our trailing 12-month total Fios Internet net add performance is the highest since 2015.”

As large telcos continue to see their low-speed DSL subscribers erode, they have set expansive plans to bring fiber to more consumer and business locations.

AT&T has forecast additional FTTH growth throughout this year with the expectation of 1 million fiber net adds for the entire year. Lumen, whose FTTH division will now be known as Quantum Fiber, has FTTH customers and has enabled 2.5 million sites with fiber.

Frontier, Windstream Sharpen Fiber Focus

Tier-2 telcos continued to make progress with their fiber and cable builds. Frontier and Windstream--two telcos that are in the process of emerging from Chapter 11 protection--have made FTTH a growth priority. 

Having revamped its management team, Frontier has set a goal to reach 10 million total locations by 2025 with FTTH. During the second quarter, Frontier built fiber to approximately 157,000 recent locations. Frontier now expects to reach 600,000 new areas in 2021, resulting in about 4 million fiber locations passing by the year’s end.

Being a transition, Frontier’s revenues took a hit in the second quarter. Frontier’s overall data and internet services revenue of $839 million decreased slightly in the second quarter of 2021 due to what it said was declining copper subscribers.

However, fiber is becoming an essential element of its growth plan. Frontier’s fiber broadband revenue was $238 million, up 14.4 percent over the second quarter of 2020. Fiber broadband customer net adds were 12,000, over 8,000 net adds in the second quarter of 2020. As customers continue to upgrade to faster speeds, fiber broadband ARPU was $63.10, up 10.9 percent over the second quarter of 2020.

But the telco is not resting on its laurels. Frontier plans to launch a symmetrical 2 Gbps offering in the first quarter of 2022, for example.

Windstream Kinetic also saw progress during the second quarter. It added 9,500 net broadband subscribers and grew consumer revenues for the sixth consecutive quarter. Also, Windstream grew consumer revenues while expanding gigabit internet service to more than 134,000 new locations

Given the challenges of rolling out broadband in rural areas, Windstream is developing “creative partnerships” to bring fiber internet service to the most rural customers and leverage RDOF funding. Windstream will receive approximately $52.3 million for ten years beginning in 2022 to provide broadband service at 192,567 total locations, or $2,715 in average support per location. It has targeted 271,000 households in Kinetic footprint and was awarded funding for 115,000 homes. Also, Windstream was granted to 78,000 homes in areas wholly outside of our Kinetic footprint.

“This year, we are beginning a five-year, $2 billion investment campaign to bring more fiber-backed connectivity to rural America,” said Tony Thomas, CEO of Windstream, in a letter to shareholders. “As a result of our historical network investments, Kinetic by Windstream grew our broadband customer base for the third consecutive year in 2020, adding 60,000 net new customers, and we expect to do the same this year.”

Consolidated, TDS, Cincinnati Bell, and Shentel Progress

Consolidated, TDS, Cincinnati Bell, and Shentel are progressing with FTTH and cable broadband.

Cincinnati Bell, which Brookfield purchased to become a private company, saw FTTH gains in Cincinnati and Hawaii. During the quarter, it only added 200 new subscribers. Like Windstream and other telcos, Cincinnati Bell has been establishing public-private partnerships with various communities in Kentucky.

The service provider struck an agreement with three counties in Kentucky--Campbell County, Kenton County, and Boone County—to provide FTTH gigabit services. Cincinnati Bell currently offers fiber-based gigabit Internet to 112,000 addresses in these counties. Once the fiber build is complete, 95,000 new addresses in these counties will access 1 Gbps FTTH service.


Over at TDS Telecom, which offers broadband over copper, HFC and fiber, connected more addresses to its network, bringing total broadband connections to 478,700. A key focus for TDS is to expand its fiber addresses to existing and what it calls “growing expansion markets.” As of the end of the second quarter, TDS had 338,000 fiber service addresses. By 2024, the telco will build out its footprint in these announced markets to 657,000 service addresses. On a year-to-date basis, TDS completed 31,000 fiber addresses, adding 18,000 service addresses in the quarter.

Peter L. Sereda, EVP, and CFO for Telephone and Data Systems, said, “fiber is the most economical, long-term solution to deliver the best broadband experience. He added that as a result of building out fiber in its ILEC and CLEC territories, “39 percent of our wireline service addresses are now served by fiber.”

TDS Telecom is no less aggressive in enhancing its cable network, which now has 201,200 addresses. By upgrading the HFC network to DOCSIS 3.1, TDS Telecom provides 1 Gbps speeds in several markets. TDS can offer 1 Gbps speed to 56 percent of its total fiber and cable service addresses combined.

 

Sereda said that its 1 Gbps service had enabled it to thwart churn and attract new customers.

“The one gig product is an important tool that allows us to defend markets and win customers in new markets,” he said. “In areas where we offer one gig service, we are now seeing 21 percent of our new customers taking this superior product.”

Consolidated and Shentel continue to see broadband gains while they expand their FTTH footprints.

With an eye on fiber expansion, Consolidated Communications saw its broadband revenue grow 3.7 percent year-over-year, reflecting what it said was two years of consecutive years of quarterly year-over-year growth.

During the quarter, Consolidated added about 3,000 consumer fiber 1 Gbps capable subscribers in the second quarter and nearly 7,000 fiber subscribers year-to-date.

In the first half of the year, Consolidated passed another 122,000 locations with fiber-to-the-premises, setting the telco on its way to complete 300,000-gigabit connections by the end of the year. Over 60 towns in CaliforniaMinnesotaNew HampshireTexas, and Vermont have benefited from its five-year fiber expansion plan, which will upgrade more than 70 percent of its service footprint to symmetrical, multi-gig speeds.

A vital element of these builds is the pacts it has made with towns across these states.

“We have completed five public-private partnerships this year. We are well-positioned to participate in any additional funding opportunities that enable us to expand rural broadband,” said Bob Udell, CEO of Consolidated. “In 2021, we have won bids for 16 additional municipal partnerships and have dozens more in the planning stages.”

Over at Shentel, the story is also focused on fiber, cable, and broadband wireless growth. The telco’s Glo Fiber branded FTTH passed 12,000 new locations, doubling the pace of the last two quarters, including the launch of service in the Virginia markets of Roanoke and Lynchburg in April. Meanwhile, its Beam fixed wireless network added over 6,500 passings during the quarter, making it available to over 21,000 homes in seven Virginia and West Virginia counties.

During the second quarter, broadband was a key driver for Shentel, adding more cable, fiber, and wireless high-speed data customers. Cable was the clear leader in the provider’s broadband results with over new 1,900 new subscribers. The rural provider is also progressing with its Glo Fiber FTTH and broadband wireless initiatives as it added 1,600 Glo Fiber and 370 Beam Wireless customers.

“Broadband data net additions for the second quarter were over 3,900, despite a seasonal bump in churn due primarily to college student move-outs in several of our markets,” said Chris French, CEO of Shentel. “The second quarter was a pivotal turning point in the mix of our net additions, with Glo Fiber and Beam now contributing over 50 percent of our net adds. We anticipate this trend will continue over the next several years.”

To keep up with all of the second quarter cable and telcos broadband earnings, make sure to check out our complete broadband report: From AT&T to Shentel: Tracking the Top 17 Broadband Service Providers in Q2 2021.

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