Author: Kelly Carter
The expansion of AT&T’s fiber network, according to the company’s Chief Executive Officer John Stankey, is a critical component of his plan to reposition the company by providing better telecommunications access.
Almost $100 billion in federal funding have been put aside for broadband rollout, which is what the CEO is currently focusing on.
In Evansville, Indiana, this week, the CEO was seen shaking hands with local officials while donning an AT&T-branded vest. Despite Indiana being a part of the company’s 21-state service area for telecommunications, it will shortly announce a broader expansion into markets outside its core domain.
This article will cover AT&T’s broadband network strategy, along with how government funding will help the business achieve its objectives.
AT&T to expand its existing telecommunication footprint
The telecommunications company has plans and is aiming to enlarge its footprint outside its current region. According to the source, Mesa, Arizona, is the first place the business will start its expansion. Even though AT&T previously provided cellular service, they are now planning to provide fiber network access in Mesa.
Furthermore, one of the many private-public partnerships AT&T has in the area was the focus of the CEO’s trip to Indiana. According to the terms of the contract with Vanderburgh County, the business must invest $30 million in constructing fiber networks that will provide ultrafast internet access to at least 20,000 homes and businesses.
The County’s American Rescue Plan funds, an infusion of federal funds to aid in the COVID-19 pandemic recovery, will contribute an additional $10 million towards this goal.
Evansville, Indiana, is a prime example of how AT&T plans to collaborate with local officials to reach those with limited or no internet access. Stankey claims that the company’s innovative network model and its plans to introduce it to new areas have generated enthusiasm among the county commissioners.
AT&T stocks at an all-time low
AT&T needs to find solutions to a couple of its issues. For instance, the company’s shares, which traded at $15.31 on October 17, are practically at a 28-year low.
The industry has dismantled its streaming and media operations at a discount price. With HBO’s parent company being incorporated into Warner Bros.
Discovery and the dwindling DirecTV satellite-TV business being handed off to private equity firm TPG Inc., AT&T is now carrying a $155 billion debt load.
The business must also pay an $8 billion annual dividend and build costly 5G and fiber networks.
Why’s the company focused on fiber networks?
Nearly all of the current development in the US broadband market is in wireless home services, which use routers to beam signals into buildings to establish indoor internet connections.
While wireless signals can benefit broadband transmission in some areas, Stankey argues that fiber networks are preferable since airwave capacity is constrained and data traffic demands are likely to increase.
Although the wiring is more expensive, fiber connections also offer tremendous capacity and lightning-fast speeds of 1 GB per second. A fiber branch must be routed from a primary trunk to a network hub, either in poles or trenches, to service a city or suburb. Each home’s setup may cost roughly $1,000. Hence why they need assistance from the government.
AT&T to collect new federal broadband funding
With the help of the $95 billion in new federal broadband funding, AT&T may be able to provide high-speed internet to areas of the country that have previously struggled with subpar internet access.
This financing follows the pandemic and lockdown, highlighting how crucial it is for people to have uninterrupted access to the internet for work and school.
The top three criteria set forth by AT&T for deploying fiber to a market with insufficient access to the broadband network are as follows:
- Generate profit
- Take care of the underserved
- Become these areas’ first fiber network provider
The company has no interest in operating a municipally-owned community network or duplicating other businesses’ fiber networks.
The bottom line
According to AT&T CEO John Stankey, the company is focused on providing a fiber network to the masses. Unlike other large corporations, AT&T plans to reduce the oversupply of long-haul fiber routes. The company is currently working on completing the last mile of the fiber broadband network, which will provide fast and sustainable internet service. However, AT&T is expected to benefit from federal broadband network funding to achieve its goal.