However, the losses were offset by 6% growth in fiber and advanced connectivity services. Within the business solutions services segment, Fiber and Advanced Connectivity Services and Wireless Services saw progress with $1.9 billion and $2.5 billion in revenues. Legacy and transitional services made up $2.2 million of revenues.
Due to lower personnel and customer support costs associated with ongoing transformation initiatives, operating expenses were down 1% year over year.
“While Business Wireline continues to manage through structural declines in legacy services, the team is doing a great job positioning the business to drive sustained growth in advanced connectivity services while operating more efficiently,” Desroches said. “Based on this solid execution, we continue to expect Business Wireline EBITDA pressures to moderate versus last year, with a full-year decline in the low-double-digit range.”
Fiber, wireless growth opportunities
Despite the near-term losses, AT&T has positioned itself to drive growth with its next-gen service set.
For one, AT&T has the largest on-net fiber business footprints in the U.S., one that will be bolstered when it completes its acquisition of Lumen’s fiber assets.
AT&T once again secured the top ranking on Vertical Systems Group’s 2024 U.S. Fiber Lit Buildings LEADERBOARD based on a substantial gain in new fiber installations. AT&T leverages that on-net fiber footprint to maintain a strong foothold in the U.S. Carrier Ethernet and optical wavelength markets.
Complementing its fiber network services, AT&T is a dominant player in the growing Software as a Service Edge (SASE) market, offering network security and SD-WAN services.
AT&T, through a partnership with Cisco Meraki, offers its Secure Access Service Edge (SASE), a cloud-delivered networking and security solution, a service that highlights the growing adoption of cloud-based services. The SASE service is designed to support a diverse set of business types—including mid-sized businesses with multiple branches and commercial enterprises modernizing legacy platforms to highly distributed global enterprises.
It is also a key player in the carrier SD-WAN market. However, AT&T's dominance in Carrier SD-WAN was challenged this year when it fell to second place behind Comcast on VSG’s 2024 U.S. SD-WAN LEADERBOARD after six years as the top carrier on the research group’s quarterly report.
Comcast, which has steadily risen in the SD-WAN market segment from its eighth position in 2018, illustrates the fact that cable operators are becoming viable competitors to large incumbents such as AT&T.
Nevertheless, AT&T can take its growing fiber assets, its experience in serving multinational companies, and its wireless capabilities to attract and retain business customers that have complex needs.
“Value-added services, which contribute about one-third of these revenues, can be variable from quarter to quarter, but we expect continued acceleration in our Fiber and fixed wireless connectivity revenues in the fourth quarter,” Desroches said.
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