Both AT&T and Verizon closed 2024 with decent fiber growth designed to propel their updated fiber expansion strategies forward and capture more convergence opportunities.
Impact: As noted by CEO John Stankey, AT&T ended the year with strong Q4 fiber results, which he claimed has the company well-positioned for a “new era of growth” after years of consistent effort. The company ended 2024 nearly right on its adjusted goal to reach 29 million fiber passings (technically 28.9 million but who’s counting?), which should set it up nicely for a revamped and accelerated fiber expansion that calls for AT&T to reach 50 million total passings by year-end 2029. Of the current total, 23.3 million of those passings are consumer locations. AT&T claimed a consumer fiber penetration rate of 40% in every quarter of 2024, maintaining its pace of adding up new subscribers while extending its fiber footprint. The company also reported that 40% of its fiber customers subscribe to its mobile services, up from 38.8% a year ago and good news for its convergence strategy. Stankey highlighted how AT&T’s combination of 5G and fiber has fueled sustained growth and will continue to do so in the long-term. AT&T reported 307,000 fiber net adds in the quarter, up 12.5% year-over-year and 35.8% sequentially, as AT&T registered its 20th consecutive quarter with more than 200,000 fiber net adds and topped 300,000 net adds for the first time in more than two years. LightReading reported that the number also came in well above the 259,000 fiber net adds predicted by analysts; Stankey commented that AT&T’s higher net adds likely resulted from “pent up demand” after the company dealt with a month-long strike in the southeastern part of its territory in Q3. For the full year, AT&T added more than 1 million new fiber customers for the seventh year in a row and grew its total fiber subscriber base to 9.3 million. Legacy losses from U-verse and DSL continued to pile up in Q4, however, and AT&T reported an overall consumer wireline broadband loss of 51,000. Taking Internet Air out of the total broadband equation, AT&T closed the year with roughly 13.3 million consumer wireline broadband customers. The ongoing legacy losses make AT&T’s planned shut down of its legacy copper network more urgent, particularly as it focuses more on fiber and convergence.
Although Verizon has been more focused on fixed wireless than fiber in the last several years, it also wants to move deeper into convergence and will use its acquisition of Frontier to do so. Verizon reported 51,000 Fios Internet net adds in the quarter, 47,000 of which came from the consumer side. Net adds improved sequentially for both total and consumer Fios Internet, up 18.6% and 20.5%, respectively. But both categories declined YOY, with total Fios Internet net adds down 7.3% and consumer net adds falling 11.3%. Despite the YOY declines, the sequential improvement helped boost total Q4 Fios Internet net adds to 175,000, nearly all of which came from the consumer side, and increased the Fios Internet subscriber base to more than 7.5 million (7.1 million consumers). The company has also laid out an ambitious fiber expansion strategy for the next several years in conjunction with its Frontier acquisition. Verizon has added 500,000 or so new Fios passings each year for the last few years but plans to push that number to 650,000 this year and then continue accelerating up to 1 million new passings per year. It plans to reach 30 million fiber passings by year-end 2028 and then grow that to 35-40 million in the ensuing years, spurred in part by the approximately 10 million fiber passings it expects to acquire from Frontier by the time the deal closes and that it will combine with its own estimated 18 million Fios passings. But like AT&T, Verizon keeps losing DSL customers, reporting a Q4 net loss of 12,000 that dropped wireline net adds to 35,000. The company ended 2024 with a wireline broadband subscriber base of nearly 7.8 million, 94% of which are consumer.
Both companies will continue to face questions about their fiber footprint and whether they have enough fiber coverage to support their ambitious convergence strategies. They’ll also need to move quickly to counter T-Mobile’s recent fiber moves and its plans to reach a planned 12-15 million fiber passings. AT&T’s strong Q4 should serve as a launch pad for faster deployments and accelerated buildouts in 2025 to extend its fiber coverage both in- and out-of-footprint to increase convergence opportunities. With the Frontier acquisition, Verizon doesn’t appear to have as much work to do organically as AT&T, but it will need to quickly get more aggressive about its in-house fiber expansion efforts if it wants to meet its own fiber timeline, especially the somewhat vague plan to reach 35-40 million at some point in the future after hitting 30 million by year-end 2028.
