As cable’s lead in the broadband market continued to slip in the third quarter, traditional telcos continued to ramp up the reach of their fiber-based broadband offerings to more homes and businesses.
AT&T and Verizon led the charge for fiber-based broadband, adding 226,000 and 389,000 subscribers, respectively, during the quarter.
Ongoing fiber broadband builds affected the networking equipment vendor space.
According to Dell’Oro’s recent third-quarter report, PON equipment spending was up 6 percent from the third quarter of 2023, driven by an 11 percent increase in expenditures for PON ONTs. ONT shipments in North America surpassed the 2 million mark for the first time since the first quarter of 2023.
Jeff Heynen, VP at Dell’Oro, said that Fixed Wireless Access (FWA) also continued to be a factor during the quarter. FWA providers like Verizon have found a way to “appeal to not only their mobile customers, but also to existing Cable, DSL, and Fiber subscribers.”
Heynen said that while he expects in 2025 “to see a rebound in spending on Broadband Access Equipment, though service providers will continue to take a measured approach to their network expansions, as interest rates are expected to remain relatively high for at least the first half of the year, pushing up the cost of capital.”
AT&T, Verizon, Lumen’s gains
Driven by fiber-based broadband and Fixed Wireless Access (FWA) sales, AT&T and Verizon continued to see positive results from their FTTH builds.
The two telcos reported broadband revenues of $2.8 and $2.9 billion.
Broadband, which includes Fios and Fixed Wireless Access (FWA), was Verizon's key contributor to growth in the third quarter.
During the quarter, Verizon added 389,000 net adds of broadband subscribers, reflecting the ninth consecutive quarter with more than 375,000 broadband net additions.
Verizon’s consumer unit reported 209,000 fixed wireless net additions and 39,000 Fios Internet net additions in the third quarter of 2024. Consumer Fios revenue was $2.9 billion in the third quarter of 2024.
Verizon is on track to reach about 500,000 premises with fiber by 2024. However, its pending deal to acquire Frontier will further enhance that reach. Frontier has set a goal of reaching 10 million locations by the end of 2026. Also, in 2025, Verizon is targeting an expansion of our Fios build to 650,000 premises.
Like Verizon, AT&T has continued to increase its fiber footprint, with 226,000 AT&T Fiber net adds in the quarter—and this comes despite a 30-day hurricane-induced work stoppage in the Southeast portion of the company’s footprint. The company estimates it had 50,000 fewer net adds from work stoppage related to the effects of Hurricanes Helene and Milton and estimated a total financial impact of about $115 million.
Fiber revenues in the quarter grew nearly 17%.
Also, the company continues to see success with AT&T Internet Air as it migrates legacy copper-based Internet customers to the service; 135,000 Internet Air customers were added during the quarter.
While considering options for its consumer business, Lumen added 43,000 new fiber subscribers during the quarter.
Regionals stay aggressive
Led by Frontier, regional fiber providers also saw fiber-based broadband growth during the quarter.
Frontier, which is in the process of being purchased by Verizon, added 108,000 new fiber subscribers in the quarter, resulting in fiber broadband customer growth of 19.3% year-over-year.
Other notable developments occurred at Windstream, Consolidated, and Shentel, which added 17,000, 5,000, and 6,000 new fiber subscribers during the quarter.
Windstream, which agreed to be acquired by Uniti earlier this year, had connected about 1.6 million premises with FTTH service and added 136,000 new customer premises.
The provider could get a boost when the deal is completed.
Paul Bullington, Uniti's CFO, told investors during the recent Bank of America Leveraged Finance Conference 2024 that the company plans to extend fiber to more locations.
“As we evaluate the assets, we think there are an additional million homes above the 1.9 million locations in the base Kinetic build plan today, which makes good sense from a return sense to build,” Bullington said.
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Sean Buckley
Sean is responsible for establishing and executing the editorial strategies of Lightwave and Broadband Technology Report across their websites, email newsletters, events, and other information products.