AT&T’s leads the pack of U.S. fiber optic network service providers

AT&T and Verizon are spending billions of dollars to grow their existing fiber-optic networks and add to the millions of broadband clients they already serve, mostly in regions covered by their historical landline-telephone infrastructure. Meanwhile, T-Mobile has five partnerships with fiber-optic internet providers that could serve millions of customers in the coming years. There are other fiber based internet providers that mostly serve business customers. Those include Comcast Business, Frontier Communications, Lumen, and Google Fiber (which also serves residential customers).

AT&T’s fiber business has remained incredibly strong, with fiber revenues growing almost 18% YoY. That led to strong top line EBITDA and EBITDA margin growth in 2Q-2024. There were 239,000 AT&T Fiber net adds in the quarter. AT&T has posted 200,000+ net fiber adds for 18 consecutive quarters – quite an enviable record. The company has managed to grow to 8.8 million total fiber subscribers, as average fiber revenue has gone up to almost $2 billion quarterly.

According to Seeking Alpha (subscription required), AT&T is substantially more reliable than Comcast, offers symmetric up and down bandwidth, and has no data caps. That makes it a much more pleasing experience. The company has worked to chase synergies with its AT&T mobility business, with not only fiber subscriptions growing, but the % of customers with AT&T mobility has grown as well. That ratio is now almost 40%.

“For the past four years, we’ve delivered consistent, positive results that have repositioned AT&T. Our solid performance this quarter demonstrates the durable benefits of our investment-led strategy,” said John Stankey, AT&T CEO. “AT&T is leading the way in converged connectivity as customers increasingly seek one provider who can seamlessly connect them in their home, at work and on the go. This is proving to be a winning strategy. Today, nearly four of every 10 AT&T Fiber households also choose AT&T wireless service. As the nation’s largest consumer fiber builder, we see this as an opportunity to continue to grow subscribers and revenues, while deepening customer relationships.”

Fiber investment drives valuable convergence opportunities:

• Wireless penetration of fiber subscribers has increased more than 400 bps since 2Q21
• Expansion of fiber footprint enables increased opportunities to sell into high quality cohort
• Converged customers are valuable and durable, with longer customer lives

“Our combined customers are happier customers,” AT&T CEO John Stankey said on a call with analysts. “Why a race to convergence? Because that’s a good way to make money, and it’s a good way to keep customers in the fold.”