AT&T wrapped up the acquisition of Lumen’s fiber property in January and is prepared to contemplate further, comparable alternatives ought to they come up. Simply so long as the property can be found on the proper value and serve the best areas, President and CEO John Stankey mentioned.
“Positive, I would be focused on choosing up extra footprint if it holds to my standpoint of use getting scale in the best geography. I do not need to simply purchase footprint for the sake of shopping for it,” Stankey mentioned on right this moment’s Q3 2026 earnings name when requested if AT&T can be focused on extra fiber M&A as sure overbuilders battle and rates of interest climb.
Stankey mentioned AT&T would solely be focused on alternatives that “bridge to different elements of our community” that drive effectivity and scale. “Lumen clearly match that invoice throughout the footprint that we picked up, in my standpoint,” he mentioned.
Brightspeed introduced up
Concerning overbuilders which can be struggling, the analyst who requested the query name-checked Brightspeed, an operator with a presence in elements of 20 states. Brightspeed got here up after auditors not too long ago issued a going concern warning. In the meantime, the Apollo World Administration-backed firm has reportedly entered talks about securing new financing choices to assist its fiber buildout.
Brightspeed’s auditors issued a going concern discover, which alongside tender outcomes and no apparent progress (but) on new, possible asset-backed safety (ABS), funding, has pushed debt costs decrease. In a current analysis observe, New Avenue Analysis Analyst David Barden famous that this problem would go away as soon as Brightspeed secured extra funding, however he additionally held that Brightspeed ought to likewise be capable to elevate cash within the ABS market, which has already been utilized by different broadband operators together with Frontier Communications (now a part of Verizon) and Optimum Communications.
In the meantime, there’s loads of scuttlebutt about different potential M&A targets that an organization akin to AT&T may pursue. In a report issued late final month, Mike Dano, a lead business analyst at Ookla and a former Gentle Studying editor, known as out seven that “stand out” given their market attain, community enlargement efforts and the extent of competitors they at the moment face: Allo Fiber, Gateway Fiber, LiveOak Fiber, Wire 3, Ripple Fiber (already being acquired by Verizon companion Eaton Fiber), Intrepid Fiber and Ezee Fiber. It is after all unclear if any of these would meet the M&A bar set by Stankey.
AT&T can be maintaining a tally of methods to extract extra revenues from its current networks. Stankey reiterated he has an curiosity in making use of an open entry, wholesale mannequin to AT&T’s legacy wireline markets. AT&T is already utilizing that mannequin for its fiber joint ventures.
“I would not rule that out over the lengthy haul,” he mentioned.
Stankey additionally outlined some methods AT&T may pursue that angle with different service suppliers, together with potential unique MVNO agreements or partnerships that concerned AT&T additionally having access to fiber footprint that it finds engaging however wouldn’t in any other case have entry to.
“You may be geographically pushed … [but] not all markets are created equal.”
A lot ado about fiber ARPU
AT&T’s fiber enterprise turned in strong subscriber and income positive factors whereas additionally increasing its general fiber footprint by 1.1 million areas in the course of the interval. Nevertheless, the corporate’s fiber common income per consumer (ARPU) dropped 4% to $70.35 on a year-over-year foundation following aggressive discounting.
Outgoing CFO Pascal Desroches attributed the decline to a number of elements, together with traction with introductory pricing, “converged” accounts that obtain reductions by combining cell with residence broadband and decrease costs provided within the not too long ago acquired Lumen fiber markets. He mentioned AT&T expects to see the same year-on-year decline in fiber ARPU in This fall.
AT&T’s ARPU drop additionally comes alongside amid Comcast’s lament that it noticed “irrational” pricing in Q2 and into Q3 from sure fiber service suppliers that analysts say has been pushed by AT&T.
AT&T argues that it is not basing success solely on ARPU, however different metrics akin to subscriber and income progress together with the advantages it will get from prospects who bundle AT&T’s residence broadband and cell companies.
“I do not need to deal with that [ARPU] solely,” Stankey mentioned. “What we need to deal with is the truth that we’re seeing nice service income progress in our enterprise.”
That metric continues to rise. AT&T superior connectivity (which incorporates fiber, mounted wi-fi and cell) noticed revenues rise 6.1% to $29.48 billion. Q3 fiber revenues hit $2.60 billion versus $2.19 billion within the year-ago quarter, and AT&T Web Air revenues reached $366 million versus $213 million.
AT&T additionally added 442,000 fiber connections within the quarter (together with provides from the acquired Lumen areas), up from 288,000 a 12 months earlier, for a complete of 13.31 million. The corporate additionally tacked on 327,000 mounted wi-fi entry (FWA) prospects, up from 203,000 a 12 months earlier, for a complete of two.23 million. Some 6.33 million AT&T prospects mixed cell with an “superior” residence Web connection (fiber or FWA), or 42.8% of that broadband subscriber base, on the finish of the quarter.
Through the quarter, AT&T added 1.1 million shopper and enterprise fiber areas, together with 1 million in networks owned-and-operated by AT&T and 100,000 through joint ventures.
AT&T ended the quarter with 39.7 million fiber areas comprising 34.7 million which can be owned-and-operated and about 5 million through the fiber JVs. AT&T expects to function a fiber footprint (through its personal community, JVs and open entry offers) spanning 60 million areas by 2030. Notably, AT&T not too long ago took a 50% stake in a brand new three way partnership that mixes Gigapower (the JV with Blackrock) with Solid Fiber 37, a holding unit for AT&T’s Lumen fiber deal.
Desroches famous that the annual capital funding for AT&T’s fiber community technique is coming in at roughly $1 billion decrease than beforehand anticipated, with a portion of it to be reallocated to assist buyer acquisition.
