Even though it signed up more than 300,000 FTTH subscribers in the second quarter, AT&T still managed to lose broadband customers because of heavy losses on its other Internet service platforms.
AT&T, the second-largest broadband provider in the US with 15.7 million subscribers, reported Wednesday morning that it netted 318,000 AT&T Fiber customers in the spring period, boosting its total to 3.4 million at the end of June. But it still lost data subscribers overall because its FTTN-delivered U-verse Internet service shed the same 318,000 total and its DSL service lost another 34,000 subs. That translates to an overall loss of 34,000 broadband customers, well off Wall Street's consensus forecast of a 124,000-sub gain.
AT&T did boost broadband revenues to $2.1 billion, up 6.5% from a year ago, and increased broadband ARPU (average revenue per unit) by 5.2% on a year-over-year basis. But these increases resulted primarily from price hikes, not subscriber growth, leading to doubts about the sustainability of the company's broadband revenue and ARPU growth.
"Their margin of 25.1% was only 50 bps higher than a year ago (apples to apples) despite sharp price increases and much lower spending on subscriber acquisition costs (one can assume)," wrote Craig Moffett, a principal analyst at MoffettNahanson, in a research note this morning. "We continue to expect margins to fall again when the drag from subscriber losses overtakes the sugar-high of price increases."
AT&T boasted in its earnings report that it now markets its FTTH network to nearly 14 million customer locations in parts of
85 major metro areas. It noted that broadband penetration rates in
its fiber footprint continue to be "significantly higher" than in non-fiber areas, with those rates increasing over time.
The carrier also said more than 80% of its fiber broadband customers now opt for speeds of 100 Mbit/s or more. Overall, the number of broadband customers with speeds of 100 Mbit/s or faster have more than doubled over the past year.
In a provocative new BBWN webinar, Broadband Success Partners' Jack Burton will delve into cable's next-gen HFC architecture plans and explain why going all-fiber may make more sense for operators right now.
It wasn't long ago that TV was ranked by subscribers as the most important service in the bundle provided by their communications service provider (CSP). Recent research indicates that for nearly three quarters of subscribers, broadband is now the most important service. Broadcast TV is the most important service to only 15% of North American consumers, replaced by OTT video streaming platforms like Netflix, Amazon Prime and Disney+. In addition, many different competitors are moving aggressively to stake a claim in consumers' homes.
In 2020, CSPs need to fight back by transforming their business models, which are becoming more reliant on a single source of revenue: fixed broadband services.
This webinar will focus on helping CSPs transform their business models by placing a firm focus on delivering a sensational subscriber experience and by offering compelling new services that generate value for subscribers. These actions will reinforce the CSP's strategic position in the home network and position themselves for growth in the next decade.
Key topics include:
Being the first to market with WiFi 6 technology, in response to consumer purchases of new devices over the holidays;
Having the insights needed to proactively resolve issues, often before your subscribers even know that there are issues;
Providing help desk agents with the visibility they need to resolve common subscriber issues more quickly;
Delivering a mobile app, in response to consumer demands for the ability to do some things themselves, rather than having to call technical support; and
Addressing consumer concerns around device security, privacy and control with enhanced security and parental controls.
In this insightful Light Reading radio show, Kurt Raaflaub, Head of Strategic Solutions Marketing, will outline the key service provider challenges, deployment considerations, next-gen Gigabit technologies, and service models to win market share in the rapidly growing MDU market.