AT&T broadband will be a growth area again, said John Stephens, senior executive vice president and chief financial officer for the carrier, at an investor conference today. He added that AT&T broadband bundles have helped the company minimize churn substantially.
Stephens attributed AT&T’s improved broadband outlook to ongoing deployment of fiber. He noted, for example, that DSL now represents just 5% to 6% of AT&T’s broadband business. By year-end, the company will have fiber-to-the-home available to 6 million households and by mid-2019 it will be available to 12.5 million households, Stephens said.
AT&T Broadband Bundles
AT&T agreed to expand FTTH availability as a condition of FCC approval of its acquisition of DirecTV, but Stephens said the investment is expected to meet the carrier’s standards for return on invested capital. He added, though, that “the exciting part is what it’s doing to churn when you bundle it with wireless or you bundle it with video.”
In areas where the company had only low-speed DSL available, it has been increasingly difficult to compete with higher-speed broadband offerings from cable companies in recent years. But using fiber to boost broadband speeds “eliminates our position as a one-product offering to the home because now, whether it’s U-verse or DirecTV, now I have the broadband to go with it,” Stephens said.
Stephens also noted that AT&T has seen “very measurable” reductions in churn on its quad play offerings, which he attributed to having a more competitive broadband offering.
Stephens made his comments in a question-and-answer session at the MoffettNathanson Media & Communications Summit, which was also webcast.
He also told attendees that AT&T expects to launch DirecTV Now Cloud DVR capability in the second half of 2017. DirecTV Now is AT&T’s streaming over-the-top video offering for customer segments who want a lower cost streaming video option to traditional DirecTV or other pay-TV services.