AT&T reported a 2.3% year-over-year revenue increase to $31.6 billion in Q2, driven by net adds across fibre, fixed wireless access (FWA) and post-paid phone subscribers.
While slightly below analysts’ estimates, the small increase was driven largely by growth in Advanced Connectivity fibre and wireless revenues, including the impact of AT&T’s first-quarter acquisition of Lumen’s mass markets fibre business.
The operator added more than 1 million Advanced Connectivity customers during the quarter. Advanced Connectivity service revenue grew 5.1% year-over-year to $23.5 billion.
AT&T rolls its fibre broadband, FWA, post-paid phone and business fibre services into its Advanced Connectivity category.
It recorded 646,000 total consumer and business internet net adds, comprised of 367,000 fibre and 279,000 FWA connections, marking a record quarter for combined fibre and fixed wireless additions.
Post-paid phone net adds totalled 432,000 to top analysts’ projections of 338,500, according to FactSet.
AT&T chair and CEO John Stankey (pictured) noted on the earnings call those additions mark the strongest consumer post-paid wireless account growth in more than three years. Post-paid churn of 0.86% was down slightly from 0.87% a year ago.
Stankey has long been a proponent of a converged strategy of wireless and fibre services as a key differentiator for the company.
“At the end of the second quarter, 42.5% of our advanced home Internet customers also have a post-paid wireless account with AT&T,” he said on the earnings call. “This convergence rate reached 45% when excluding customers within our acquired footprint from Lumen.
“These are high lifetime value subscribers, and our strong customer growth is a key driver of our accelerated financial growth during the second quarter,” he added.
The operator added more than 1 million total consumer and business fibre locations, bringing its total to 38.6 million. Stankey said it remains on track to exceed 40 million fibre locations by the end of 2026 and more than 60 million by 2030.
Income from continuing operations rose 3.6% to $5.0 billion, while adjusted EBITDA climbed 5.2% to $12.3 billion.
Stankey stated the results demonstrate the company’s structural advantages heading into the next era of connectivity, and confirmed AT&T is accelerating planned share repurchases to approximately $10 billion this year.
SpaceX
The AT&T chief was asked about forging a wholesale agreement with Elon Musk-owned SpaceX but he stated AT&T does not see a need for satellite service as a core part of its distribution strategy because it already handles more than 98% of traffic across its converged customer network.
“I don’t feel a need right now that I need to have a satellite partner as a main distribution vehicle for me because I don’t think it addresses a part of the market that I can’t get to on my own,” he said.
Stankey pointed to the joint venture AT&T formed with Verizon and T-Mobile US, stating it allows the operators to work with multiple satellite operators, including SpaceX, Amazon, and AST SpaceMobile, for the small percentage of coverage which falls outside their terrestrial networks.
“By the time we get into next year, we will have solved for that other 2% and we will be in the market doing what customers want, which is providing them the assurance that they can buy from one provider and always be on the internet,” he said.
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