AT&T today announced its Q4 2021 earnings results through which it provided updates on its consumer-facing fiber broadband unit, business wireline fiber initiatives, and plans for its mid-band 5G network deployment using C-band and 3.45 GHz spectrum.

AT&T Consumer Wireline – Q4 2021

Within AT&T’s Consumer Wireline business unit, the company generated $2.32bn of revenue from broadband services in Q4 2021, an increase of 1.5% quarter-over-quarter and 5.4% year-over-year.

During the quarter, AT&T lost 20k net broadband and DSL subscribers, bringing its total broadband and DSL subscriber count to 14.2 million. Importantly, AT&T’s broadband operating trends differ significantly between fiber and non-fiber / DSL connections.

Broadband and DSL Subscribers – Net Adds/Losses

During Q4 2021, AT&T gained 271k fiber broadband subscribers, lost 272k non-fiber broadband subscribers, and lost 19k DSL subscribers.

Fiber Broadband Subscribers

AT&T ended Q4 2021 with 6.0 million fiber broadband subscribers, an increase of 1.04 million subscribers year-over-year. Indeed, this represents a 21% gain in fiber broadband subscriber count, as compared to AT&T’s 4.95 million fiber broadband subscribers as of Q4 2020.

AT&T Fiber Subscribers Net Adds Q4 2021

Overall, AT&T now has a fiber broadband penetration rate of 37%, on the ~16 million customer locations that the company passes with fiber. Importantly, AT&T has increased its fiber broadband penetration rate by 3% over the past year, from 34% in Q4 2020.

As a reference point, Verizon’s Fios business registered 6.5 million consumer fiber customers as of Q4 2021.

Broadband ARPU

AT&T’s broadband average revenue per user (ARPU) reached $55.96 as of Q4 2021. Indeed, this represents a 4.2% increase year-over-year from ARPU figures of $53.72 at Q4 2020.

Fiber Deployment Targets

AT&T previously indicated a plan to increase its fiber broadband footprint by an additional ~4 million customer locations in 2022. Ultimately, AT&T indicates that its fiber deployment pacing can reach 5 million homes passed per year.

Overall, these near-term plans form part of AT&T’s strategy to expand its fiber broadband footprint to cover 30 million customer locations by year-end 2025.

Multi-Gig Speeds

AT&T is now delivering symmetrical (i.e., download and upload) speed tiers of 2 gigabit per second (Gbps) and 5 Gbps to nearly 5.2 million customer locations in parts of 70+ metro areas in the United States. Specifically, pricing for these new speed tiers is as follows:

  • 2 Gbps: $110 per month + taxes, with AT&T Business Fiber priced at $225 per month + taxes
  • 5 Gbps: $180 per month + taxes, with AT&T Business Fiber priced at $395 per month + taxes

AT&T Business Wireline – Q4 2021

As of December 31, 2021, AT&T’s business wireline network has brought lit fiber to 675k+ U.S. business buildings, enabling high-speed fiber connections to 2.75+ million U.S. business customer locations. More broadly, 9.5+ million business customer locations nationwide are within 1.0k feet of AT&T fiber.

Enterprise Fiber Expansion with Frontier Communications

In October 2021, AT&T signed a multi-year agreement to utilize Frontier Communications’ Ethernet and fiber optic networks to bring fiber connectivity to large enterprise customers outside of AT&T’s current footprint, as well as support the deployment of AT&T’s 5G mobile network.

AT&T Mobility – 5G Spectrum Deployments

AT&T intends to deploy the mid-band component of its 5G network using C-band spectrum (3.7 GHz to 3.98 GHz frequencies) and 3.45 GHz spectrum (3.45 GHz to 3.55 GHz frequencies). Near-term, AT&T is deploying 80 MHz of spectrum depth, from a combination of its C-band and 3.45 GHz spectrum holdings.

Over the next three years, AT&T indicates that these mid-band spectrum deployments will require a total of ~$8bn in capital expenditures.

C-band Spectrum

AT&T notes that it is on-track to cover 200 million points-of-presence (PoPs) in the U.S., with mid-band spectrum, by year-end 2023. To this end, AT&T is deploying the first 40 MHz of A-Block from its C-band spectrum holdings.

3.45 GHz Spectrum – Auction 110

In January 2022, the Federal Communications Commission (FCC) released the auction results and winning bidder identities for its Auction 110, through which 100 MHz of national average spectrum depth was auctioned in the 3.45 GHz spectrum band, which amassed a total of $22.5bn in gross bids.

AT&T led all wireless carriers in the 3.45 GHz spectrum auction with $9.1bn of net spending, equivalent to 40.5% of total net bids. In turn, AT&T’s $9.1bn of net spending equates to $0.74 per MHz-PoP across 307 million points-of-presence (PoPs).

By acquiring 40 MHz of nationwide spectrum depth (i.e., the maximum amount allowed in Auction 110), AT&T was able to reduce its mid-band spectrum deficit to Verizon and T-Mobile.

Jonathan Kim covers Fiber for Dgtl Infra, including Zayo Group (private), Cogent Communications (NASDAQ: CCOI), Uniti Group (NASDAQ: UNIT), and Lumen Technologies (NYSE: LUMN). Within Fiber, Jonathan focuses on the sub-sectors of wholesale / dark fiber, enterprise fiber, fiber-to-the-home (FTTH), and subsea cables.

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