AT&T’s CEO says it’s building fiber broadband where it gets a return on capital
AT&T is continually making progress in rolling out fiber broadband service to more customers in its wireline territory. Still, the service provider focuses on finding the right balance to get a positive payback.
Speaking to investors during the Morgan Stanley Technology, Media & Telecom Conference, John Stankey, president and CEO of AT&T, said he is comfortable with the deployment speed.
“We think we've got the right rate and pace,” he said. “That may change over three or four years. Markets change, dynamics change, and we'll adjust to it as we have in the past.”
He added, “we're not building to non-accretive locations,” but rather in “the places where we can return on our capital.”
While the service provider has deployed fiber into profitable markets, Stankey quickly points out that its experience handling sizeable network builds means it can address any potential issues.
“This notion that somehow only the best markets have been built and everything that gets built from now on is going to be dilutive because density is dropping up, is just patently wrong,” he said. “We are managing everything we manage when we do large infrastructure builds. And we have a lot of experience doing those things, and we're pretty good at squeezing breakage out of the system.”
Balancing build-out costs
As AT&T considers where it will bring fiber broadband next, it is a multi-faceted decision.
Leveraging new processes and technologies to keep costs in check and working with local towns and cities to understand their specific needs are at the top of its list.
“Innovation and design, lowering costs for your design and how you do things, come into play,” Stankey said. “Incentives, as you work with local municipalities and areas that are interested in having new infrastructure put in place, are ways that you go in.”
Scaling connections
A key focus for AT&T is to enhance its reach into markets where it currently has an established presence.
“We're not opening new markets,” Stankey said. “We're adding to existing markets that we have already built. We're going into adjacent geographies.”
By enhancing existing markets, AT&T can move toward gaining scale.
Like any provider, AT&T's initial challenge when introducing fiber broadband to a new market is establishing a presence and gaining a customer base.
“When you walk in and do your first 10% of a market, it's the hardest,” he said. “There's no recognition, there's no word of mouth. There's no scale. You can't use mass media to drive awareness because you can't afford to pay when you only offer 10% of the market.”
He added that “when you come in and you start working on adjacency and you're moving from 50% of the footprint to 60% to 70% to 80%, all those dynamics change, and you get more effective and efficient.”
It appears that AT&T’s efforts are paying off.
In the fourth quarter, AT&T had added 307,000 new consumer fiber customers and ended 2024 with 28.9 million locations passed. Likewise, fiber ARPU was $71.71, up 4.7% year-over-year.
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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.