AT&T expands 5G network as it gains wireless, fiber subscribers

AT&T gained customers in the second quarter as the telecommunications giant worked to upgrade its network to better compete with Verizon and T-Mobile.

The Dallas-based company revealed on Thursday with its second-quarter results that it has already covered 70 million people with its C-band flavor of 5G. The company previously said it plans to provide midband spectrum to 70 million to 75 million people by the end of 2022, having spent $27 billion last year, but it moved away from that goal earlier this year. Instead, in January, it said it plans to cover 200 million people with its various mid-band spectrum positions by the end of 2023.

In addition to purchasing the C-band, AT&T spent more than $9 billion acquire additional 3.45 GHz midband spectrum in a recent FCC auction. That contributes to the increasing cache of midband radio waves, which is coveted for its mix of wider coverage and faster speeds. Both bands can work together and are marketed by the carrier as “5G Plus”.

On Thursday, AT&T said it is six months ahead of schedule for midband 5G deployment and now expects it to reach nearly 100 million people with this flavor by the end of the year.

The carrier hopes the upgrades to its network will continue to bind customers to its services. During the second quarter, it said it added 813,000 net postpaid subscribers. Postpaid users, or those who pay their phone bills at the end of the month, are a benchmark used by the industry as an indicator of a wireless carrier’s success.

Those who join AT&T, or existing users who upgrade lines, seem to opt for more expensive phones when they sign up. The telecom giant said revenue from equipment in its mobile unit was $4.9 billion for the quarter, up 7.2% year over year and “driven by increased sales of more expensive smartphones”.

Expensive phones continue to be a strong incentive for the carrier, as most of its deals on phones like the iPhone 13 or Galaxy S22 require a customer to commit to a 36-month installment plan and sign up for an unlimited plan to get a discount on a device.

However, inflation remains a concern. In May, the airline raised prices for older plans, citing inflation. Executives during their earnings call continued to worry about inflation, which reached 9.1% in Juneand the company has lowered its free cash flow guidance for the year.

The company has seen some customers delay bill payments, but chief operating officer Jeff McElfresh told CNET those delays are one or two days longer than how quickly people paid their bills last year.

“Those payments are still within payment deadlines,” he said, “so they’re not late payments, they’re just extended days of outstanding bills by a small number of” people. McElfresh added that this level of delays still “is no greater than what we did pre-pandemic”.

In broadband, AT&T Fiber has added 316,000 subscribers. The carrier added 289,000 subscribers in the past quarter and says it’s the 10th straight quarter with more than 200,000 net subscribers. As with its efforts on 5G, the carrier has been working to improve its fiber network and has started upgrading its network to offer multigigabit connections.

Read more: Fiber versus 5G: why the wired connection still rules

AT&T posted second-quarter revenue of $29.6 billion, beating the $29.56 billion analysts had expected according to polls by Yahoo Finance. Adjusted earnings were 65 cents per share, which also exceeded Wall Street’s expectations of 61 cents per share.

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