AT&T’s Fixed Wireless Access Shows Solid Growth In Second Quarter

WASHINGTON, July 24, 2024 – AT&T again added more customers than expected to its fixed wireless broadband service in the second quarter of 2024, counting 139,000 new customers for a total of nearly 350,000.

Company CEO John Stankey said on an earnings call that investors should expect that trend to continue. 

“You should expect that we’re going to continue to grow and you’ll see improvements in our rates [of added customers] associated with that,” he said.

He reiterated that AT&T isn’t offering its Internet Air service to consumers everywhere, just where it can hold customers over while DSL is being replaced with fiber and “where we have very fallow capacity that we can be confident will be long-lived in nature, not something that we end up having to incrementally invest in two years out after we sell into the market.”

With respect to the recently launched Air for Business offering, though, “any place the right customer wants to buy it, we’ll sell it,” he said, owing largely to lower data usage.

The company also added 239,000 fiber customers, which was a bit less than analysts had expected and not enough to outpace 326,000 U-verse losses and 20,000 lost DSL subscribers, which brought wireline broadband subscriptions (excluding Internet Air) down by 107,000. With the fixed wireless offering, broadband additions were positive at 32,000.

AT&T’s total fiber subs now sit at about 8.8 million. Stankey said the company will hit its target of passing 30 million homes and businesses with fiber by the end of the year.

“You can check the box that that’s going to occur,” he said.

AT&T is separately working with investment firm BlackRock on an open access fiber network – on which AT&T will be the first tenant – that plans to pass 1.5 million locations. Stankey said he would be able to say more about the status of that project – currently building out in several states – at the Goldman Sachs Communacopia conference in September. 

He also attributed the lower-than-expected fiber adds in part to the end of the Affordable Connectivity Program, a federal subsidy mechanism that provided low-income households with a $30 discount on their broadband bills. 

Telecom companies have been bracing for lost subscribers on both fixed and mobile plans as a result of the ACP’s shuttering in May, but the impact on AT&T has been more modest.

The company reported adding 419,000 postpaid phone subscribers, well above expectations, and prepaid additions remained positive at 35,000 despite missing consensus expectations.

“I think we came through and demonstrated that we have good quality customers who still need to use the service one way or another,” Stankey said. “We’re largely through the impact at this juncture.”

The company reported $29.8 billion in revenue, including $2.7 billion in consumer broadband revenue. Fiber revenue was up nearly 18% year over year.

Postpaid wireless churn remained low at 0.70 percent.

The company disclosed this month a data breach that affected nearly all of its mobile subscribers, and the Federal Communications Commission on Monday signaled it may fine the company for a February wireless network outage.