Despite adding tons of broadband customers to its all-fiber network, AT&T keeps losing broadband subs overall.
In the latest case, AT&T reported Thursday that it shed 102,000 broadband subscribers in the second quarter despite picking up 225,000 customers for its AT&T Fiber Net. The result marks the company's fourth consecutive quarterly net loss of advanced broadband subscribers as it continues to fall further behind such big cable rivals as Comcast and Charter in the US broadband market.
The telecom giant posted the overall broadband sub losses because it dropped 304,000 U-verse and other "advanced" broadband subscribers, according to the company's latest earnings report. It also shed another 23,000 DSL subscribers as that business continues to wind down.
As a result, AT&T's total Entertainment Group broadband subscriber base is now shrinking by 3.3% on a year-over-year basis, according to the latest calculations by Craig Moffett, principal analyst at MoffettNathanson. In a report to investors today, he noted that this pace represents "another marked acceleration from the 2.8% decline" the company was experiencing just one quarter ago.
Due to these accelerating subscriber losses, AT&T's broadband financial metrics are clearly trending down as well.
"As with video, they had been pushing ARPU steadily higher, reflecting both mix as well as a clear intention to extract more cash from the business," Moffett wrote in his report. But, he added: "Growth of just 1.6% YoY in premium broadband ARPU only (they don't report DSL ARPU) wasn't enough to offset the 2.5% YoY decline in
subscribers; as with video, IP broadband revenue growth is now negative YoY."
Taking a major financial beating from the COVID-19 pandemic, AT&T didn't fare much better with the other major parts of its business in Q2. For instance, revenues at its WarnerMedia unit fell to $6.8 billion, down 23% from $8.8 billion last year, because of the absence of theatrical releases, lower TV ad sales and the lack of live sports. Company officials estimated that COVID-19 accounted for $1.5 billion of that decline.
Similarly, on the pay-TV side of the business, AT&T continued to shed subscribers by the truckload. The company closed June with 17.7 million pay-TV customers, down 886,000 subs for the quarter, with its DirecTV satellite unit accounting for most of that drop. In addition, AT&T lost 68,000 streaming video subscribers, lowering its total to 720,000 subs, down 46% from a year earlier.
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