AT&T continues to test the impact of lead-clad cables on its network, and CEO John Stankey assured investors the company is taking the concerns brought up in the Wall Street Journal’s report “very seriously.”
Speaking on the operator’s Q2 earnings call, Stankey emphasized the importance of using “reliable science” to evaluate the issue, as well as collaboration with the Environmental Protection Agency (EPA) and AT&T’s partners in the telecommunications industry.
He noted the industry began to phase out the placement of new lead-clad cables in the 1950s. However, these cables continue to be used in power grids and railway systems across the country and some “still provide important customer voice and data services,” such as connecting 911 systems.
“Independent experts, long-standing science have given us no reason to believe these cables pose a public health risk,” Stankey said. “Still, we’ll be responsive to any concerns raised by recent reporting. We’re doing additional testing at selected sites.”
AT&T last week disclosed it doesn’t plan to immediately remove lead-clad cables from Lake Tahoe, one of the areas the WSJ tested for contamination. The company first agreed to remove those cables in 2021.
An AT&T rep told Fierce it plans to release additional testing results for the underwater cables in Lake Tahoe as well as for aerial cables in the Detroit area. The Lake Tahoe test, which was conducted by “a different, prominent expert,” found no lead leaching from those cables and “reaffirmed” AT&T’s original findings in 2021.
In the case of Detroit, the rep said testing there is ongoing but preliminary results show those aerial cables “are not a significant source of lead exposure or a public health threat.”
“The lead levels in soil below the cables are less than the average household soil lead levels in the Midwest as reported by HUD and are far less than the EPA’s screening level for lead in residential soil,” the rep added.
Fiber grows amid copper losses
On the fiber front, AT&T gained 251,000 fiber customers in the second quarter, bringing its overall fiber subscriber count to 7.7 million. The operator boasted an average fiber penetration rate of 38%, however, the net addition of fiber subs was down from 316,000 in Q2 2022.
Further, fiber net adds were “more than offset” by non-fiber subscriber losses, with AT&T losing 35,000 broadband customers in the quarter. That figure excludes AT&T’s DSL metrics.
AT&T’s overall fiber passings tally stands at around 25 million and the company said it remains on track to pass 30 million-plus locations with fiber by the end of 2025.
CFO Pascal Desroches noted AT&T’s fiber revenues are “outpacing” its legacy revenue and that separation “will grow over time.”
Executives on the call made no mention of AT&T’s Gigapower fiber joint venture with BlackRock, which closed earlier this quarter. AT&T’s earnings release indicated Gigapower has expanded fiber to an initial eight new areas but did not specify the exact markets.
Edward Jones analyst David Heger said AT&T’s internet subscriber results were somewhat weak, given “solid” fiber growth was offset by the loss of legacy copper customers. He added uncertainty around the environmental impact of lead-coated cables “could limit share appreciation for AT&T.”
Financials
Consolidated revenue totaled $29.9 billion, slightly up from $29.6 billion in the year-ago quarter. Consumer wireline revenue increased 2.4% year on year from $3.17 billion to $3.25 billion, with AT&T noting average revenue per user (ARPU) for fiber jumped 8.2% to $66.70.