John Stankey
Chief Executive Officer at AT&T
Thanks, Amir, and good morning, everyone. I appreciate you joining us. I'd like to open our discussion today by sharing that at the halfway point of the year, our performance and results are tracking entirely consistent with the guidance we provided to you. In fact, as Pascal shares the specifics with you, I think you'll conclude that our performance continues to demonstrate our strategy is on track to achieve the objectives we outlined three years ago: to drive consistent growth, simplify the Company and reduce leverage. To that end, I'd like to spend a few moments today summarizing that progress and how we believe this positions our Company for sustainable and profitable growth going forward.
Let's start by looking at our wireless business. For the last three years, our teams have executed on the strategy that enabled us to go from annually losing share to now delivering the right combination of continued postpaid phone adds, low postpaid churn, growing average revenue per user and profitability growth. Specifically, over the past three years, we've added 8.3 million postpaid phone net adds, that's up from fewer than 1 million in the three years prior to July 2020. During the past three years, not only do we close the gap to the industry share leader for postpaid phones by about 350 basis points, but we also improved our wireless service revenue share versus the industry-leader by roughly 250 basis points.
On postpaid phone churn, we drove an improvement of 28 basis points since the beginning of 2020. We also achieved our record low quarterly postpaid phone churn in two of those three years. In stark contrast, the wireless industry's leader's postpaid phone churn was relatively flat over the same time. Statistics aside, from my seat, our historically low levels of churn, along with improved mobility net promoter scores, shows me that our customers are very happy with the investments we've made in AT&T's customer experience and network quality and that our teams are delivering great value. Ultimately, this means our customers are more likely to stay with AT&T over the long-haul. And this is confirmed by external indicators, like the American Customer Satisfaction Index, which recently named AT&T is the Number 1 in wireless customer satisfaction.
So, more customers are choosing AT&T and staying with AT&T. They're also more profitable as evidenced by our increase in postpaid phone ARPU and service revenues. Over the past three years, our postpaid phone ARPU is up more than $1. This shows that customers are voting with their wallets. We've achieved the right balance between the cost of our services and the value we provide.
Lastly, let's look at wireless revenues and profitability. From 2Q 2018 to 2Q 2020, our wireless service revenues were essentially flat. Our profitability was up modestly over that time period. However, in the past three years, we have grown quarterly wireless service revenues by about $2 billion, up roughly 15% and we've materially increased profitability on an annual basis. I should also call-out the success we're seeing in our prepaid business, where Cricket has sustained growth by continuing to add prepaid voice customers to one of the highest-value subscriber bases in the sector.
Now, let's turn to our fiber business. Our investment thesis for building more fiber started with our understanding that people needed better and faster broadband connectivity than what was available, that those needs would only grow exponentially. We believe that by providing the best access technology on the planet, we could transform our consumer wireline business into a fiber-fueled sustainable growth franchise. Our results have only strengthened that confidence as returns continue to exceed our initial expectations. Over the past three years, we've had more than 3.4 million AT&T fiber net-adds, boosting our subscriber base by roughly 80%. Everywhere we put fiber in the ground, we feel good about our ability to win with consumers. In fact, our average penetration rate is about 38%.
Over the past three years, our fiber net additions outpaced the leading cable providers' broadband net additions. This is an impressive accomplishment given the size of their footprint. Since the second quarter of 2020, we doubled our quarterly fiber broadband revenues, reaching more than $1.5 billion this quarter. And over the past three years, the accretive mix shift to fiber is driven our broadband ARPU up more than $10, an increase of 20%. This again shows that customers are voting with their dollars. We also have plenty of room to run as we're still less expensive than competitive offerings in the market.
So, let me summarize. Our wireless business is growing share in ARPU, low churn and improving margins. And our fiber business is accelerating new build penetration, growing share in ARPU, while lowering churn and improving margins. This is the formula for sustainable top- and bottom-line results. And we're confident this success will be sustainable over the next three years. Here's why. As industry convergence accelerates, our owners' economics in both fiber and wireless provide AT&T with a strategic advantage that will be hard to match. The lifetime value of our mobile customer is significantly higher than that of a cable MVNO customer. Cable is busy adding wireless customers at very low lifetime values just to protect customers they already have. We're not only keeping our current high value customers happy, but also adding more of them.
Moving to our next priority. I'm pleased with how we continue to simplify our business and improve our efficiency. Our cost savings initiatives has achieved our $6 billion run-rate savings target, and we believe there is significant opportunity to build on this momentum with another $2 billion-plus over the next three years. After a period of reinvestment, this work has been the foundation for our recent margin improvements as shown in our adjusted EBITDA margin improvement this quarter of 210 basis points compared to the same quarter last year. These additional cost savings will be largely driven by the sunsetting of our legacy product portfolio and supporting infrastructure. As we ramp our execution on this work, we'll begin to enjoy the benefits of our simplified focus on wireless and fiber.
Turning to our final priority. We continue to allocate capital in a deliberate manner to create best-in-class experiences for customers, drive sustainable profitable growth and deliver long-term value for shareholders. Over the past three years, we've reduced our net debt by about $20 billion. We also recently transferred $8 billion of pension liabilities through the purchase of insurance annuities. As Pascal will discuss, we've addressed a number of one-time and discrete items and now expect to use an increasing amount of our free cash flows after dividends to accelerate our debt reduction efforts. We remain committed to achieving the 2.5 times range for net debt-to-adjusted EBITDA in the first half of 2025. We feel good about our ability to accomplish this goal, while providing an attractive dividend with improving credit quality as we expect to increase cash generation overtime. At the same time, we're investing in the future of our Company and the future of our country's connectivity.
Since July 2020, our capital investment has totaled about $65 billion. As one of the largest investors in America's broadband infrastructure, we're enhancing our 5G and fiber network at a historic pace. We're focused on connecting the most people and the most places and with the best experience. Over the past three years, we've passed about 7 million new fiber locations, increasing our locations passed by about 40%. Over the same time, we've expanded our nationwide 5G network to cover approximately 290 million people, and we now reached more than a 175 million with mid-band 5G spectrum. While some of our peers spend time trying to convince you why their services are good enough for now, we're investing billions to provide Americans access to the best Internet offering for decades to come.
I'll end my remarks by reiterating that the repositioning of our business can be credited to our team's belief in our strategy and ongoing commitment to delivering real value for our customers. We're focused on ensuring AT&T is the clear choice to serve our country's connectivity needs not only today, but well into the future.
With that, I will turn it over to Pascal. Pascal?
