AT&T CEO John Stankey conceded the operator’s plans for fixed wireless access (FWA) technology may not be as ambitious as those of its competitors, but he noted the technology could end up being a good replacement for legacy DSL connections.
Speaking during an investor conference on Monday, Stankey said, “There’s no question where we’ve had lower speed DSL offers in the market that a fixed wireless solution at the outer reaches of what used to be the ILEC footprint could be a good solution for us and those customers.”
He added “more importantly” the use of FWA could also allow it to decommission legacy infrastructure over time. “We have a voice replacement service now that can be in there, and so that allows us to look at our options around footprint that used to be in place and fixed costs that used to be there and begin the work of starting to shed some of that footprint and reduce the number of square miles that have that fixed infrastructure in place that really you’re never going to have an incentive to ultimately upgrade to fiber,” Stankey said.
The CEO's comments are interesting given AT&T has been much less vocal than rivals T-Mobile and Verizon in defining and promoting its FWA service to consumers and businesses. AT&T has offered an LTE-based FWA product for several years now, with executive Igal Elbaz noting during an investor conference in May 2020 it already covered 880,000 subscribers and was pushing to reach 1.1 million by the end of that year. It appears that AT&T's FWA service is built on a point-to-point architecture to serve select unserved ares.
In March 2021, AT&T began rolling out a 5G FWA service for businesses, which uses Sierra Wireless and Ericsson Cradlepoint routers for a point-to-multipoint architecture. Stankey did not say whether a move to open the 5G iteration to residential consumers was part of its plan.
Verizon already offers a 5G FWA product in more than 30 markets, and has said it is aiming to cover as many as two million households with mmWave-based service by the end of 2021. Meanwhile, T-Mobile has said it is striving to serve up to 8 million homes with its 5G FWA product by 2025, though some analysts have cast doubt on its ability to hit this figure.
Last week, AT&T announced it would ramp capital investments and double its fiber footprint to 30 million customer locations by end-2025.
Stankey hinted the 30 million target could grow as vendor costs improve, demand for connectivity increases and the operator gets “up the learning curve further.” He noted AT&T’s ability to build a vertical service on top of its fiber offer that brings in incremental revenue could open the door to “the next 10 million homes because it’s not just connectivity, it’s something else that goes on top of it. We should expect that this is going to continue to evolve over time.”
In terms of its ability to penetrate the new markets where it is planning to build, Stankey said he “absolutely” believes it will be a share-taker.
Analysts at Wells Fargo Securities warned in a research note released over the weekend AT&T has an uphill battle ahead of it.
“Our perspective is that T will still be a challenged business, with competition only ramping in both wireless and fixed broadband as T looks to play catch-up,” the team led by Eric Luebchow wrote. “The ramp in fiber-to-the-home investment is the right strategic move, but T still has to fight against an increasingly competitive environment for home broadband and a base of nearly 9 million non-fiber residential broadband customers.”