With AT&T Fiber Penetration on the Rise, CEO Questions Rural Fiber Viability

AT&T added over 1 million new fiber subscribers in 2020, with 273K net adds in 4Q20 alone. AT&T fiber penetration now stands at 34%, up from 28% a year ago. That’s a 21% year-over-year improvement in AT&T fiber penetration, with the company now counting 4.9 million total FTTP connections. With this momentum, the company also announced plans to increase homes passed with fiber by an additional 2 million locations in 2021. While AT&T fiber penetration is on the rise, its legacy DSL and VDSL base is a drag on the company’s overall broadband numbers. When you add these legacy broadband customers into the mix, AT&T actually lost 2K broadband subscribers in 4Q20 and 19K for all of 2020. 

While AT&T is bullish on fiber penetration, don’t expect the company to extend its fiber footprint into rural markets, even if regulatory subsidies encourage it. AT&T CEO John Stankey commented that he doesn’t see fiber as viable in rural markets to reach the remaining third of subscribers who don’t have great broadband options. As a result, AT&T is not likely to extend fiber to its rural markets, Stankey said. This view of rural fiber probably contributed to AT&T’s absence in the recent RDOF auction. “I actually believe, candidly, even if there was subsidy put in, it would be a better use of taxpayer money to do something that was more hybrid oriented in the technologies that are applied and not exclusively lean on fiber in that space,” Stankey said.