Fibre underpins solid Q4 for AT&TFibre underpins solid Q4 for AT&T

The US operator on Monday added more than a dollar to its share price when it posted its results for the three months to the end of December.

Aside from a strong performance in fibre, the telco was also upbeat about its mobile business, and the relationship between the two. But while it expects revenue growth in both sectors this year, it has no new operational targets to share at this stage.

AT&T rolled out full fibre to around 600,000 premises in Q4, taking its total fibre footprint to 28.9 million locations. At that rate of build it is surely well on track to hit its goal of reaching 30 million by year-end, an interim target on the road to 50 million by the end of 2029.

Arguably more importantly, its take-up rate looks healthy. The telco added 307,000 net new fibre customers in Q4, raising its overall subscriber base to 9.3 million.

Postpaid phone net adds, another closely-watched metric, came in at 482,000, which was actually down on the fourth quarter of 2023, but a good enough result for AT&T to draw attention to it. History suggests T-Mobile US will post a higher number when it reports its own results later this week, but AT&T is confident its churn figure will be the best across the industry at 0.85%.

The telco is also seeing an increase in customers taking both mobile service and fibre broadband, which can only help with stickiness.

"While our fibre investment is delivering strong returns on a standalone basis, it's also benefiting our Mobility business as we add more converged customers," AT&T chief financial officer Pascal Desroches said on the firm's analyst call.

"Our AT&T Fiber penetration is 40% today, with 4 out of every 10 AT&T Fiber households also choosing AT&T as their wireless provider," Desroches said. "Both these metrics improved by about 100 basis points versus the prior year, reflecting strong demand for our fibre and 5G services together," he said.

Customer growth is translating into a revenue uplift, with AT&T reporting increases in both Consumer wireless and broadband, partially offset by a decline at its Business wireline unit. Overall, its top line was up by 0.9% year-on-year in Q4 to US$32.3 billion. Revenue for the full year was flat at just over $122 billion.

In 2025 AT&T is guiding for consolidated service revenue growth in the low single digit range, which would be an improvement on the 0.5% it posted in 2024. The big growth drivers will be mobile and fibre. AT&T puts Mobility service revenue growth at the higher end of the 2%-3% range, and Consumer fibre broadband revenue growth in the mid-teens.

"We ended 2024 with strong momentum," said AT&T CEO John Stankey in a statement accompanying the numbers. "Customers and shareholders can look forward to receiving even more value in 2025 as we expand the country's largest fiber network, modernize our wireless network, grow our business and begin share repurchases in the second half of the year."

That's the sort of statement shareholders like to hear.