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AT&T added over 1 million new fiber subscribers in 2020, with 273K net adds in 4Q20 alone, the company reported today. AT&T fiber penetration now stands at 34%, up from 28% a year ago.

That’s a 21% year-over-year improvement in AT&T fiber penetration, with the company now counting 4.9 million total FTTP connections. With this momentum, the company also announced plans to increase homes passed with fiber by an additional 2 million locations in 2021.

“We had our best AT&T fiber 4th quarter net adds, even with more challenges associated with the pandemic,” said John Stephens, AT&T CFO, on today’s 4th quarter earnings conference call. “Penetration continues to grow, it’s now at 34%.”

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While AT&T fiber penetration is on the rise, its legacy DSL and VDSL base is a drag on the company’s overall broadband numbers. When you add these legacy broadband customers into the mix, AT&T actually lost 2K broadband subscribers in 4Q20 and 19K for all of 2020.

While AT&T is bullish on fiber penetration, don’t expect the company to extend its fiber footprint into rural markets, even if regulatory subsidies encourage it. AT&T CEO John Stankey commented that he doesn’t see fiber as viable in rural markets to reach the remaining third of subscribers who don’t have great broadband options.

As a result, AT&T is not likely to extend fiber to its rural markets, Stankey said. This view of rural fiber probably contributed to AT&T’s absence in the recent RDOF auction.

“It’s always the hardest part, I mean in many instances, you’re still sitting with the last third that in parts of rural America that still really don’t have effective broadband options,” said Stankey on today’s call. “I actually believe, candidly, even if there was subsidy put in, it would be a better use of taxpayer money to do something that was more hybrid oriented in the technologies that are applied and not exclusively lean on fiber in that space.”

As for where AT&T will focus those additional 2 million locations to build on its fiber penetration momentum, Stephens suggested it’s more likely to be upgrading existing VDSL locations and the neighborhoods that surround them to FTTP, rather than undertaking completely new greenfield builds.

“We have fiber-to-the-neighborhood in many, many locations and taking fiber-to-the-home is the second step, we haven’t done that yet,” said Stephens. “If you think about the neighborhoods next to the VDSL, or with respect to where we have got fiber to the prem, those are the opportunities and that VDSL footprint is 35 million and when you add the fiber to it, it’s greater than that, that will give you kind of a framework for something that we can officially do.”

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5 thoughts on “With AT&T Fiber Penetration on the Rise, CEO Questions Rural Fiber Viability

  1. Funny how AT&T has used this excuse for years to NOT increase rural fiber build out. While AT&T wasted $$$ on buying DirecTV—-the little telcos, small town citizens, and other fiber ventures have actually delivered fiber to rural USA..

  2. Same as Verizon did until PUC said they had to also do the rural areas It meet financial science but those in sticks just have wait

  3. Translation, SpaceX you can have one third of our least profitable customers since they cost more than they are worth. AT&T has been milking them for over twenty years and the infrastructure upgrade required is just not worth it. For those of you thinking 5G is the answer to slow rural internet, a rural rollout of fiber is required to get decent fiber back haul for rural cell towers. No rural fiber means rural towers will still be slow even as they boast 5G signals. What good is 5G when the back haul is legacy T1 lines that are 30 years old technology.

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