AT&T’s Modular Fiber Optic Technology will Cover 60 Million Users by 2030
AT&T has formulated an ambitious plan for deploying fiber optic broadband. After announcing the acquisition of Lumen’s consumer fiber business, the operator plans to achieve fiber coverage in 60 million locations by 2030. Lumen’s Mass Markets fiber optic business has approximately 1 million fiber optic customers, covering over 4 million fiber optic sites across 11 states in the United States.
Achieving this goal faces challenges, especially in terms of installation and labor. But Pascal Desroches, Chief Financial Officer and Senior Executive Vice President of AT&T, is confident in completing this fiber optic construction feat with existing tools, calling it “an investment that can generate returns for decades.
“When we first evaluated the opportunity, we realized that deploying fiber optic would be costly, “he said.” As we grew in size, team efficiency significantly improved. The fiber optic technology we used adopted a connector based design with highly modular features, significantly reducing the need for installation labor.”
Control the cost of fiber optic installation
Although AT&T is well aware that labor costs are an inevitable expense in the construction of fiber optic networks, modular fiber optic technology effectively alleviates the pressure of continuously rising labor prices. AT&T points out that labor is the biggest cost item for deploying fiber optic, with a total construction cost increase of less than 2% since 2023.
Desroches stated, “The modular installation method and the ability to ensure successful installation in one go have truly enabled us to achieve efficiency improvements when scaling up our fiber optic network.” In the second quarter, the company continued to expand its fiber optic coverage and user base.
As of the end of the first quarter, AT&T’s fiber optic network covered 23.8 million home locations, and is expected to exceed 30 million locations by mid year. The company reiterated its overall goal of covering over 50 million fiber optic sites through organic construction, GigaPower, and other commercial open access protocols by 2029.
The company also enhances its bargaining power with key suppliers by leveraging its scale advantage. In October 2024, AT&T reached a multi-year procurement agreement with Corning to acquire fiber optic, cable, and connectivity solutions to expand fiber optic broadband networks and meet the construction requirements of the Broadband Fair Access and Deployment (BEAD) program. As Corning’s most important customer, AT&T enjoys a priority position in mass production of connectivity solutions, which can accelerate network expansion and improve performance while minimizing deployment costs. This agreement, worth over 1 billion US dollars, is built on decades of cooperation between the two parties.
“We can also obtain very favorable material unit prices, “Desroches emphasized.” Our scale advantage brings significant benefits, and suppliers ensure that we obtain the best transaction conditions. These factors work together to drive overall cost control, and we are confident in maintaining good cost management.”
Fiber optic and wireless bundling strategy
Through the Lumen transaction and GigaPower, AT&T is expanding its fiber optic coverage both inside and outside traditional regions, enabling it to provide wireless and fiber broadband bundled services to more consumers. Within its fiber coverage area, AT&T’s wireless market share is 500 basis points higher.
Desroches pointed out that wireless services are another return factor for fiber optic installation: “When we initially approved fiber optic installation projects, we never considered wireless services. Now when the team evaluates project returns, wireless has become a new component, although not a core element
To advance its integration/bundling strategy, the company has launched the “AT&T Guarantee” program, aimed at providing reliable connectivity, competitive discounts, and timely customer service. This includes billing deductions in case of service interruptions, smartphone discounts, and a commitment to connect technical support or provide call back services within 5 minutes. Since the launch of this guarantee program in January, the net recommended values of its wireless and fiber optic customers have improved after network events.
Desroches stated that in areas where fiber optic has been deployed, the continued growth in wireless subscriptions makes fiber optic investment returns more attractive. “Will construction costs continue to slightly increase over time? Yes, “he admitted,” but the project’s profitability is so prominent that I don’t need to stop construction at any point in the foreseeable future due to insufficient investment returns.”