AT&T fiber expansion on track to pass 30 million locations by mid-2025

“Our customer-focused, investment-led business model has positioned AT&T as a trusted provider of critical connectivity services,” said CEO John Stankey during the company’s first-quarter earnings call. “As a result, we’re well positioned to drive sustainable growth through a range of market and economic cycles.”

AT&T’s fiber network now covers 23.8 million consumer locations and is expected to pass over 30 million locations by midyear. Looking ahead, the company reaffirmed its broader target of reaching more than 50 million fiber locations by 2029 through a combination of organic buildouts, GigaPower, and other commercial open-access agreements.

AT&T also continues to phase out its copper infrastructure, with Stankey citing regulatory support from the FCC as an opportunity to accelerate the transition.

Driving broadband growth

In the first quarter, AT&T added more than 261,000 fiber subscribers, up from 252,000 in the same period last year. Total broadband net additions reached 137,000, marking the seventh consecutive quarter of broadband growth and the second consecutive quarter exceeding 100,000 net additions.

AT&T had total revenues of $30.6 billion in the first quarter. Consumer fiber broadband revenues were $2.1 billion, up 19% year-over-year, which CFO Pascal Desroches attributed to subscriber gains and a 6.2% increase in fiber ARPU.

Consumer wireline revenue grew 5.1% year-over-year. Consumer wireline EBITDA increased by 18.6% in the quarter, though Desroches noted that approximately $55 million of this growth came from non-recurring vendor settlements.

Business Wireline revenues declined approximately 9% year-over-year, which Desroches attributed to continued pressures on legacy and other transitional services.

AT&T also reported growth in its fixed wireless access product AT&T Internet Air, which added 181,000 subscribers in the quarter

Convergence-focused strategy

AT&T continues to pursue its convergence strategy, and the company reported that over 40% of fiber households now also subscribe to AT&T mobile services. Stankey reported that converged customers produce lifetime values over 15% higher than customers using only one service.

“The message here is that the primary driver of our growth is our success in executing our fiber and 5G playbook,” said Stankey. “Our increased investments in customer acquisition and retention are driving sustained growth in high-value customer relationships.”

AT&T reported that a significant portion of new wireless gross additions in the quarter came from existing fiber households, strengthening its cross-service penetration.

Stankey also emphasized the “AT&T Guarantee” initiative launched earlier this year, which promises reliable service to both fiber and wireless customers.

“AT&T is the first and only carrier that offers a guarantee for wireless and fiber networks to both consumers and small businesses,” said Stankey. “A key reason we can make this promise is because of the significant fiber expansion and network modernization investments we’re making to be the best connectivity provider in America.”

Investments and capital allocation

AT&T’s capital investments for the first quarter totaled $4.5 billion, with spending heavily focused on deployment and network upgrades. Desroches reiterated AT&T’s expectation for full-year capital investments to reach approximately $22 billion, with fiber expansion remaining a key priority.

Desroches also highlighted AT&T’s improved balance sheet position, noting a reduction of approximately $1 billion in net debt during the quarter.

“We’ve worked hard at strengthening our balance sheet and continue to operate the business with a net leverage target of net debt to adjusted EBITDA in the 2.5x range,” said Desroches. “Since the beginning of 2020, we have reduced our net debt by $32 billion.”

Looking ahead

Despite an uncertain economic environment, AT&T remains confident in its ability to meet financial targets, emphasizing a strategy centered on customer growth through network expansion and convergence.

“The fundamentals of our business are very strong,” said Stankey, “and we continue to feel confident that our strategy and plans for 2025 are on track.”

For the full year, AT&T expects low-single-digit consolidated service revenue growth and forecasts consumer fiber broadband revenue growth in the mid-teens.