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AT&T Q1 Reflects Fiber Growth, Fixed-Wireless Still Plays Crucial Role for Rural Americans

AT&T executives emphasized role of fixed-wireless as crucial to serving rural Americans.

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AT&T CEO John Stankey at the Fortune Brainstorm TECH at the Aspen Institute Campus, by Kevin Moloney/Fortune Brainstorm TECH

WASHINGTON, April 21, 2022 – During AT&T’s first quarter call on Thursday, CEO John Stankey noted the decline of older technologies as it expands its fiber builds and continues to invest in fixed-wireless.

During the call, AT&T Chief Financial Officer Pascal Desroches stated that even with the shutdown of 3G services, the company still had its best first quarter in more than a decade with 691,000 postpaid phone net adds and 965,000 postpaid net adds on its network. In the first quarter, AT&T fiber also gained 289,000 net adds, having brought the total AT&T fiber users up to 6.3 million (1.1 million more than Q1 of 2021).

While speaking to investors Thursday, Stankey emphasized that the demand for slower technologies like DSL and cable are continuing to fall. “We do not believe a product that is doing sub-100 [Mbps] is going to be a viable product in the market over the net couple of years based on how we are seeing consumers use the service,” Stankey said.

Similar sentiments have been shared by industry experts and broadband experts since over the past several years, though these assertions were echoed even louder during the Covid-19 pandemic, when the difference between those who could benefit from telehealth, telework, and distance learning services became even more pronounced.

Though fixed-wireless deployment strategies may not be able to deliver speeds as high as fiber, Stankey also did not rule them out. “There are clearly places in more rural areas where fixed wireless will be the best way to send bandwidth out to a customer,” he said. “We believe we can play in those spaces – there will be some former ADSL locations where fixed wireless will be a substantial step up and opportunity, and there [are] going to be places where the government comes in with subsidy in less densely populated areas that fixed-wireless is going to be the solution.”

He added that even though there might be other customers that may be best served by other “niche” broadband products, AT&T will not focus on marketing to these highly specific customers. “I think market performance of what we are able to do as we blanket an area with a robust fixed/fiber broadband service are showing in the numbers that we are putting up in our performance in the market right now.”

Consolidated revenues for the quarter were $38.1 billion with operating income of $5.9 billion.

Reporter Ben Kahn is a graduate of University of Baltimore and the National Journalism Center. His work has appeared in Washington Jewish Week and The Center Square, among other publications. He he covered almost every beat at Broadband Breakfast.

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Open Access

Sweden’s Open Access Fiber Deployment Offers Lessons for U.S. Strategy

The country boasts internet penetration with 98% served with Gigabit symmetrical speeds.

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Photo of COS Systems CEO Mikael Philipsson from the company.

December 6, 2023 – The former CEO of a fiber deployer in Sweden urged the United States Tuesday to be bolder in broadband deployment, reflecting on the Nordic nation’s aggressive buildout of open access fiber networks that now provide 98 percent of the population with access to gigabit download and upload speeds.

COS Systems CEO Mikael Philipsson, and former CEO of GlobalConnect, highlighted at Broadband Breakfast’s Digital Infrastructure Investment Summit Tuesday how Sweden’s gigabit broadband strategy drove an open access “fiber race” in the Nordic nation, from which he said the U.S. can learn.

Philipsson called for U.S. network engineers to “plan for 100 percent,” saying if municipalities start to cherry pick which homes they build to, it will result in a fraction of the population likely never being served.

When GlobalConnect was planning its wholesale fiber network, it built fiber to the smallest, most rural locations first, then invited all ISPs to provide services over the network on equal terms, he said.

The Swedish government’s broadband strategy adopted in 2016 encouraged rapid investment and innovation. The government had several initiatives and strategies to encourage private investment in broadband networks, including subsidies and grants for private investment in rural areas, the promotion of public-private partnerships, and encouraging open access networks.

Today, 60 percent of the Swedish market has adopted internet service that utilizes the open access model, with the other 40 percent choosing a vertically-integrated fiber or cable offering that still relies on a wholesale fiber backbone. Due to consumer demand, even the former incumbent, Telia, adopted the open access model in order to maintain its competitive advantage.

Lessons along the way on the open access path

But there were hard lessons learned along the way, Philipsson said, including labor shortages and permitting issues that caused buildouts to stall for 12 to 15 months at a time.

“It’s going to be more expensive and take a longer time than you think,” warned Philipsson.

Fifteen years earlier, leaders of GlobalConnect were deciding whether to pursue an intensive infrastructure rollout. In what would become a defining moment, the team decided to challenge incumbent providers who at the time owned 99 percent of the physical infrastructure in the country, launching a fiber-to-the-home wholesale network with private backing.

The company’s move kicked off a land grab across Sweden, as infrastructure providers raced to compete for a share of the wholesale fiber market.

“It was a fight on the street to get customers,” recalled Philipsson. “We rolled tractors out on the street as a marker to say ‘We will serve this part of the town.’” Within five years, GlobalConnect had addressed two million households across Sweden with a fiber offering, and built its wholesale network to pass one million homes with a 70 percent take rate.

The positive effects of adopting the wholesale model across Sweden were sweeping for service providers, infrastructure providers, and residents, alike. Service providers with big ambitions were able to launch their services nationally with no capital expenditures, he said. Competition drove providers to become more customer centric, offering differentiated pricing models and expanded offerings to separate themselves, he added.

“Partner up with your former competitors, perhaps,” said Philipsson. “Sharing infrastructure is really the end game for digital infrastructure, just like all the other infrastructures.”

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The High Cost of Fiber is Leading States to Explore Other Technologies

If the state chose to solely install fiber, underserved communities would be left out, said state broadband leaders.

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Photo of Sandeep Taxali of New Mexico, Kaiti Saunders of Verizon, Edyn Rolls of Oklahoma and Brian Newby of North Dakota (left to right)

WASHINGTON, November 17, 2023— The high cost of fiber installation has led states to pursue hybrid fiber models to ensure rural and underserved communities have access to the internet.

Speaking at the U.S. Broadband Summit here on Thursday, state broadband officials expanded on the challenges they face in ensuring broadband deployment.

Sandeep Taxali, broadband program advisor with the New Mexico Office of Broadband Access, said that New Mexico’s $745 million allocation under the Broadband Equity, Access and Deployment program falls short of the $1.3 to 2.5 billion that the state would need for full fiber deployment.

If the state chose to solely install fiber, underserved communities would be left out, he said.

“We want to lead with fiber but we also recognize that advanced fixed wireless and hybrid fixed wireless and fiber and satellite have a seat at the table for the very high cost remote areas where fiber is just going to not allow us to get the mission done,” Taxali said.

Jade Piros, director of Kansas Office of Broadband Development said her state is likely chosing to do 75% fiber model and 25% other technologies. Uncertainty of the cost from broadband providers make it difficult to have a standard cost calculation.

“We have to get everybody connected, and that’s why we require a lot of flexibility in shifting our expectations and the willingness to work closely with providers and be responsive to what they’re telling us,” Piros said.

Edyn Rolls, director of broadband strategy at the Oklahoma Broadband Office, expressed optimism that all of the underserved residents in her state would be reached, despite having what she said was an estimated $500 million shortfall.

“We will find the technologies that are going to be less expensive and achieve the needed model,” Rolls said. “We are trying to reach universal access. That is the goal.”

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Fiber

In New York City, Sharing Broadband Infrastructure Takes on a New Dimension

Panelists from Stealth Communications and Sidewalk Infrastructure Partners addressed operational and financial broadband

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At VON: Evolution, Drew Clark, Joe Plotkin of Stealth, and David Gilford of Sidewalk Infrastructure Partners (left to right)

NEW YORK, November 6, 2023 – Expanding competitive broadband infrastructure in New York City is challenged by aging conduit access and difficulties attaching fiber lines to utility poles, experts said at a panel discussion here on Thursday.

Register for Digital Infrastructure Investment in Washington on December 5, 2023!

In a discussion called “Building Beyond BEAD,” a reference to the Broadband Equity, Access and Deployment grant program at VON Evolution, a tech and telecom summit, panelists highlighted the critical role of funding for digital infrastructure investment.

Joe Plotkin, business development director for New York fiber provider Stealth Communications, explained how the city’s underground conduit system dates back to the 1880s. This legacy infrastructure helps new entrants like Stealth run fiber by providing conduit access through an established system long occupied by incumbents like Verizon and Altice.

Above ground, pole attachment policies also stymie broadband competition, according to David Gilford, head of policy and strategic partnerships at Sidewalk Infrastructure Partners, a company that builds technology-enabled infrastructure, backed by institutional investors including Alphabet.

Gilford advocated for greater sharing of “scarce” pole real estate among competitive carriers looking to deploy fiber and wireless infrastructure.

Plotkin and Gilford explored these challenges at a panel organized and moderated by Broadband Breakfast CEO Drew Clark at VON Evolution. They examined how private capital can help bridge broadband gaps as an alternative to, or extension beyond, government funding programs like the $42.5 billion BEAD initiative.

While BEAD will expand service to unserved and underserved areas, Plotkin noted it may have limited impact in locations deemed served. He gave the example of old apartment buildings in New York City that lack modern wiring, leaving residents with poor broadband options.

Gilford explained companies like SIP make investments in physical infrastructure like shared radio access networks and other wireless components. But his company does not build the lower-level fiber networks itself, instead partnering with both municipalities and private providers like Stealth.

Plotkin emphasized fiber remains the “gold standard” for reliable, high-capacity broadband versus other technologies like satellite. But innovations are still needed in running fiber the “last 50 feet” into residences and businesses, including affordably wiring older apartment buildings.

The panelists named immersive extended reality environments, two-way video calling, cloud computing and connected vehicles as emerging applications dependent on robust fiber and wireless networks.

Editor’s note: Sidewalk Infrastructure Partners makes investments in physical infrastructure like shared radio access networks and other wireless components, but does not actually invest in fiber routes or cell towers, as was stated in a prior version of this story. Additionally, SIP is not best described as a venture capital spin-off of Google, but as a technology-enabled builder of infrastructure backed by institutional investors including Alphabet. The story has been corrected.

Register for Digital Infrastructure Investment in Washington on December 5, 2023!

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