AT&T’s CFO: Consumer fiber revenues will outpace DSL declines

March 21, 2024
The service provider sets the pace to extend service beyond the initial target and new converged service opportunities to raise ARPU and lower customer churn. 

AT&T has high subscriber hopes for its fiber-to-the-home (FTTH) business with a forecast for higher APRU and revenue opportunities.  

Speaking to investors during the recent Deutsche Bank Conference, Pascal Desroches, senior EVP and CFO of AT&T, intimated that its AT&T Fiber business would continue to help it turn around the fortunes of its Consumer Wireline segment.

“We were in a business principally [DSL] declining revenues and declining earnings. We've made the pivot,” he said. “Fiber revenues will grow faster than declines in legacy products. We've doubled our fiber revenues in the last three years.” 

One key battle that has challenged AT&T and other large incumbent telcos building an FTTH business is migrating customers off the legacy copper network to fiber. Desroches said that AT&T continues to hold an extensive copper infrastructure that still produces revenues but “also comes with a significant fixed cost.”

“We still have a considerable amount of legacy copper infrastructure that will just take us time to get through,” he said. But as we get through that, we are pleased with what we're seeing in terms of fiber, the maintenance profile, durability, fewer repairs, and lower power demand, all things that set us up nicely as we make our way through the transition.”

Expanding fiber further

AT&T’s fiber build will surpass 30 million consumer and business locations by the end of 2025. The company expects first-quarter AT&T Fiber net adds in the Consumer Wireline segment to be in the 250,000 range.

However, the telco could extend the reach of its fiber network beyond its 30 million location goal. This expansion would take place on two fronts: adding more locations in its footprint and through its investment in GigaPower.

Gigapower plans to provide a fiber network to internet service providers and other businesses in parts of select metro areas throughout the country using a commercial wholesale open-access platform.

“We expect to reach 30 million locations in 2025. We've announced an opportunity for an incremental [10% to 15%] increase in our footprint beyond that,” Desroches said. All that is aside from the amounts that we have invested in GigaPower, where we are the anchor tenant, our 50-50 JV, where we are the anchor tenant, and that is in Phase 1, expected to be 1.5 million subscribers, or locations passed.”

By expanding the availability of its fiber-based services to more customer locations, AT&T can raise customer ARPU and reduce churn.

“We are penetrating fiber faster,” Desroches said. “Our ARPUs are higher. Our churn is lower. So, there are lots of good things happening.”

Converged services opportunities

As AT&T expands its fiber network to more locations, it can further its customer bonds by offering complementary wireless services.

Being a provider that offers wireline and wireless services, AT&T can provide a converged set of services to reduce churn and retain more customers.

AT&T can use its owned and operated scaled wireless and fiber networks. Unlike others in the industry, the company realizes economic benefit from both when it adds converged subscribers.

“As we add more fiber homes, the ability to provide a converged offering with attractive economics on both sides, we're not [great] payment network the way some of our peers are,” Desroches said. “And I think that's a distinct advantage that we have that over time will allow us to one, churn down even more. We are proud that where we have both products, the churn profile is better than each product.”

He added, “The ability to lean into that unique opportunity will give us every confidence that we can maintain churn at really low levels and attack a set of opportunities that we didn't have even if you just looked a couple of years ago.”

For more news, products, and technical profiles in broadband cable and telecommunications technology, subscribe to BTR's newsletter and follow us on LinkedInTwitter, and Facebook

 

About the Author

Sean Buckley

Sean is responsible for establishing and executing the editorial strategies of Lightwave and Broadband Technology Report across their websites, email newsletters, events, and other information products.

Sponsored Recommendations

Data Center Interconnection

June 18, 2024
Join us for an interactive discussion on the growing data center interconnection market. Learn about the role of coherent pluggable optics, new connectivity technologies, and ...

The Journey to 1.6 Terabit Ethernet

May 24, 2024
Embark on a journey into the future of connectivity as the leaders of the IEEE P802.3dj Task Force unveil the groundbreaking strides towards 1.6 Terabit Ethernet, revolutionizing...

AI’s magic networking moment

March 6, 2024
Dive into the forefront of technological evolution with our exclusive webinar, where industry giants discuss the transformative impact of AI on the optical and networking sector...

Supporting 5G with Fiber

April 12, 2023
Network operators continue their 5G coverage expansion – which means they also continue to roll out fiber to support such initiatives. The articles in this Lightwave On ...