AT&T reported 4Q21 and full year 2021 results today, offering more guidance around its fiber broadband build strategy. AT&T added 271K fiber subscribers in 4Q21 and ended up with 1 million net adds for the full year.
The 4Q21 net fiber adds of 271K is down slightly from 273K net adds in 4Q20. That prompted a question from an institutional investor on today’s earnings call about net fiber add acceleration rates, and specifically, when will AT&T be able to step on the fiber acquisition gas?
AT&T CEO John Stankey offered some guidance regarding the company’s fiber build strategy, hinting at the potential for that acceleration. Stankey cited supply chain challenges as one of the culprits for a fiber acquisition slowdown.
Stankey says the desired AT&T fiber build strategy is to be in a position to start selling to subscribers 9 months after they begin the engineering process for any given market. Currently, that process is taking a year or more and that’s why net adds have been a bit slower than desired, according to Stankey.
“From the time we say go to about the time we’re actually in the market selling is currently running about a year,” Stankey said on today’s call. “I’d like that at maturity, and the challenge I’ve got to the team, is I’d like that to be 9 months.”
Those supply chain challenges caused AT&T to hit only 2.6 million new available fiber locations in 2021, short of its 3 million goal. There were fewer available locations to sell into for the year.
That additional inventory is now coming online and Stankey suggested the net add numbers in 2022 should improve as a result.
“You are going to see that [fiber net add] acceleration start to happen,” he said. “We should be able to get there as we move through this year.”
Stankey said last year that the carrier’s fiber goal of reaching 30 million locations by the end of 2025 may be too low, suggesting the trends in the market might cause them to increase that forecast. AT&T currently passes roughly 16 million locations (based on a reported penetration rate of 37%).
AT&T reports a total of 6 million fiber subscribers as of the end of 2021. That would make AT&T the second largest FTTH provider in the U.S., running right behind Verizon’s 6.5 million fiber subscribers.