AT&T FTTH subscribers will grow to 7 million by 2022, according to John Stankey, President and COO of AT&T. Stankey announced the projected FTTH subscriber growth during AT&T’s quarterly earnings reporting conference call today.
AT&T added 191K FTTH subscribers in 4Q19, bringing total AT&T FTTH subscribers to 3.9 million, up from 2.7 million at the end of 2018. Based on approximately 14 million homes passed, AT&T fiber penetration is roughly 28%. The goal is to get to 7 million, or roughly 50% penetration of current homes passed.
“We have 4 million fiber customers today and our recent fiber expansion gives us 14 million locations to sell into,” said Stankey during today’s earnings call. “Based on our fiber sales experience, we expect to exit 2022 with about 3 million more fiber customers than we have today, or a total of about 7 million.”
By comparison, Verizon had 5.8 million residential Fios FTTH customers at the end of 3Q19 (Verizon hasn’t reported 4Q19 results yet), meaning AT&T is a bit of a distant second in terms of total residential FTTH connections. Maybe that will change, as AT&T is adding net new subscribers at a faster rate and should they achieve the 7 million by 2022, they will probably surpass Verizon as the largest residential FTTH provider in the U.S.
It’s really only about fiber for AT&T’s broadband business. By my math, the company actually lost a total of 373K broadband subscribers in 4Q19, when counting their legacy DSL and FTTN customer base. The 191K net adds in fiber helped the company report a total net loss of 182K broadband subscribers in 4Q19.
AT&T has pretty much halted any new fiber builds of real substance. Stankey says that may change, but probably not materially so. If conditions are right, Stankey says you might see AT&T add one or two million more FTTH capable locations.
“It’s entirely possible that this operating team could build another million to two million a year, if we felt like we had the operating momentum to do that,” said Stankey.
AT&T’s fiber broadband business is part of their larger Entertainment Group business unit, which also houses their video business. Unfortunately, the video bloodbath at AT&T continues, with the company losing over 1 million pay-TV subscribers again in a single quarter during 4Q19, helping to drive a 7% decline in Entertainment Group revenue to $11.2 billion in 4Q19, down from $12 billion in 4Q18.