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AT&T pilots multi-gig fiber, adds 270K subs in Q4

AT&T CEO John Stankey revealed the operator is conducting market tests of a multi-gig fiber service and expressed confidence it will cross the 300,000 fiber net add milestone this year.

Responding to a question about fixed wireless access during Citi’s AppsEconomy Conference, Stankey stated rising bandwidth demand for use cases like video will require a robust fixed connection and highlighted a positive consumer response to a multi-gig fiber pilot it is running.

“Wireless networks in some instance will have difficulty scaling in certain segments of the market as a result of that and there’ll be more effective ways to serve those customers,” he said. “When I start to look at what we’re seeing as we start to do our market tests and market pilots of multi-gig deployment on fiber and the market success we’re having and the sentiment of the customers that are taking it, I think that’s a really, really powerful combination. And I think those segments of the market will need to be addressed with more fixed solutions.”

Details about where the multi-gig testing is taking place, what speed tiers are on offer and when a commercial launch might follow were not immediately available.

AT&T Communications CEO Jeff McElfresh previously indicated the operator was interested in pursuing a multi-gig service, stating in June its network capabilities would allow it to begin offering fiber service tiers beyond 1 Gbps.

Fiber adds

In a preview of its year-end 2021 results, AT&T revealed it added 270,000 fiber subscribers in Q4 and around 1 million for the full year. The former figure was down slightly from 273,000 in Q4 2020. AT&T added 1.06 million fiber subs for the full year 2020. The company ended 2021 with 2.6 million new fiber locations, falling short of its original 3 million location target but beating its revised forecast of 2.5 million locations.

Analysts at New Street Research called the 270,000 net add figure “disappointing,” noting it came in below the firm’s projection of 277,000 and the Wall Street consensus forecast of 302,000. They argued a sharp increase in the number of homes passed in Q4 “should have translated into higher net adds” and warned the weaker-than-expected figure could fuel investor concerns about a slowdown in the broadband market.

Stankey, however, touted the 270,000 number as a sign of AT&T’s strength in the market and pointed out Q4 is typically “a little bit of a slower quarter.” He also noted that AT&T was “a little bit late bringing on that new inventory” to market as it added passings.

All 2.6 million locations are now open for sale, Stankey added. “I think now that we can sell into that in ’22, that’s going to allow us to get that momentum to break through that 300,000 range of customers per quarter,” he said. “I expect you’re going to continue to see those [additions] grow as we move through ’22 as the footprint expands and that will be the case all the way through ’25 as we get to 30 million fiber homes.”

The CEO said the additional 400,000 locations it was planning to pass in 2021 as part of its original 3 million expansion target will “come very quickly in the front end of this year” in a 30-to 45-day timeframe.

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