AT&T added more than 3.2 million phone subscribers in 2021, a tally that exceeded the number of net new customers gained in the last decade combined, the carrier announced in its fourth-quarter earnings call Wednesday.
In the fourth quarter alone, AT&T recorded a net gain of 884,000 postpaid customers, a metric coveted by carriers for long-term revenue. AT&T gained more fiber home internet customers, with 271,000 net additions, and the carrier has a long-term goal of reaching 30 million homes by 2025.
The earnings call comes days after AT&T expanded its 5G network by activating its so-called C-band frequencies, giving customers expanded speed and coverage. The deployment wasn’t without controversy, which drove AT&T (along with Verizon) to voluntarily limit deployment of the new signal type around airports for six months. The Federal Aviation Administration had requested more time to study the frequency range’s potential interference with aircraft equipment, especially altimeters that pilots rely on to bring planes in for landing amid rough weather conditions.
These restrictions shouldn’t affect most customers signed up for AT&T’s 5G Unlimited plans. C-band fits between low-band 5G under 800MHz that deliver speeds only slightly better than 4G and millimeter wave 5G above 28GHz with much higher speeds, peaking above 28GHz, but very small coverage areas.
AT&T’s C-band launched on Jan. 19 at a smaller scale than rival carrier Verizon’s network expansion, going live in “limited parts” of eight metropolitan areas including Dallas-Fort Worth, Chicago, Detroit and Miami. Supply chain issues have reduced the carrier’s original goal of reaching over 70 million people with C-band by the end of 2022, AT&T’s executive vice president of technology operations Chris Sambar told CNET last week. Customers should see C-band service expand in earnest in the second half of 2022.
The company’s 5G connectivity will likely get better with the slice of 5G that AT&T secured in FCC spectrum Auction 110. CEO John Stankey wouldn’t share all details on the earnings call, but did disclose that the carrier acquired 40MHz of the 3.45-3.55GHz frequency range that was on sale. This new frequency range will be combined with the C-band service that’s already started rolling out. By the end of 2023, AT&T plans to reach 200 million people with its 5G service.
AT&T generated $41 billion in revenue in the fourth quarter, down 10.4% year over year from the fourth quarter in 2020, and 78 cents in adjusted earnings per share, above the 76 cents average earnings per share that analysts at Yahoo Finance expected. The earnings report was overshadowed by AT&T’s plan to spin off HBO Max off to the Discovery network to form a new media company, Warner Brothers Discovery. Like Verizon, the carrier is in the process of divesting itself of its media content arm to focus on connectivity, though shareholders.
AT&T and the FAA: Slowly settling the C-band panic
AT&T paid $23 billion for 80MHz of C-band in the February 2020 FCC auction, taking a smaller share of the spectrum compared to rival Verizon, which spent $45 billion. AT&T expected to use C-band frequencies in the 3.7-3.98GHz range to build out its 5G network, which previously consisted of low-band 800MHz and millimeter wave, or mmWave, above 28GHz.
While Verizon and AT&T were slated to turn on their respective C-band 5G service by the end of 2021, the FAA and the aviation industry raised concerns that the new frequencies could overlap with ranges used by aircraft equipment. Altimeters, for instance, operate at 4.2-4.4GHz frequencies to guide pilots in to land with low visibility and poor weather conditions.
Both carriers voluntarily delayed their C-band rollouts until early January, but successive last-minute complaints by the FAA and a request from the Biden administration, echoing the concerns about potentially dangerous interference, led to another delay until Jan. 19. While AT&T and Verizon activated their C-band service, repeated FAA and airline pushback led the carriers to voluntarily restrict C-band service around airports for six months, though not without protest.
“We are frustrated by the FAA’s inability to do what nearly 40 countries have done, which is to safely deploy 5G technology without disrupting aviation services, and we urge it to do so in a timely manner,” AT&T said in a statement released last week. “We are launching our advanced 5G services everywhere else as planned with the temporary exception of this limited number of towers.”
In that six-month period, the FAA plans to verify that altimeters and other equipment used by modern aircraft won’t be impacted by C-band 5G. The agency has already cleared 90% of the US commercial fleet, according to its website, including aircraft from Boeing, Airbus and Embraer, and older McDonnell Douglas airliners.