AT&T CFO John Stephens said on a Friday morning investor conference that adding more fiber was about more than just passing additional homes.
Speaking at the Morgan Stanley European Media, Tech and Telecom Conference, Stephens said fiber provides a "three-for-one" revenue opportunity for AT&T.
"I think about the fiber being part of my core transport network, and serving business customers and connecting to large business customers and small business customers, and then I think of it as an opportunity to connect the homes," he said. "So I have a three-for-one in this integrated carrier environment that really gives me a different opportunity than others. When I say three-for-one, that's three revenue opportunities, as well as a really efficient cost structure. That's how we think about our fiber. That's why we continue to invest in fiber and I expect we'll do more."
RELATED: AT&T CEO Stankey: Fiber is the juice behind every network
During AT&T's third quarter earnings call last month, CEO John Stankey said that every trench foot of fiber that the company digs needed to support various access technologies, such as cell towers, millimeter wave sites, or a strip mall that needs wireless access for businesses to run credit card approvals on.
Stephens said the Covid-19 pandemic has shifted connectivity demand from cities into suburban and rural areas, but AT&T's investments in fiber, cell towers, and low-band spectrum has served the telco's customers well.
With more remote workers and online learning due to Covid-19, fiber is also shouldering the shift for more capacity demand from homes instead of office environments.
"The bigger issue with fiber for us is I don't think about building fiber as passing a home and that's it," Stephens said. "I think about building a fiber plant that allows us to have backhaul for wireless, particularly when you think about some of the residential areas where traffic has grown substantially because you're working from home. When you're on your phone or on your tablet in your home, you're drawing down either off of the Wi-Fi or wireless network. So I think about the fiber as a cost savings for me to do backhaul from my cell sites, or my small cells."
In the recent third quarter, AT&T added 357,000 AT&T Fiber subscribers and had 158,000 net broadband adds. Stankey said AT&T was on track to grow its fiber base by 25% en route to adding 1 million new subscribers this year. AT&T Fiber currently has 4.7 million fiber subscribers and a 33% penetration of fiber homes passed. AT&T Fiber passes 14 million homes.
During Friday's conference, Stephens said Q3 was AT&T's best quarter ever for fiber-based broadband additions.
"When you compare it to third quarter of last year, I think it was about 10%, higher, and the third quarter last year was our previous best quarter ever," said Stephens, who announced earlier this week that he would be retiring at the end of March after serving as CFO for 10 years. "So we feel good about what's going on there."
While there are still opportunities for more AT&T Fiber adds in the current footprint, Stephens said AT&T will be running lower on its inventory, and that its going to need to build-out more fiber at some point.
Stephens said AT&T's top priorities were 5G, high-speed connectivity and software-based entertainment, such as AT&T TV, all of which feed off of fiber.
"The key for us is to make sure we do really good integrated planning, which I think the team is focused on," he said. "If you go to our priorities that brought all of this focus on really doing things that serve customers, and doing it very efficiently and effectively, that is how you do that with the additional fiber build."