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AT&T Expects to Offer “Nationwide” 5G and Fiber Broadband Service Within 3-5 Years


AT&T CEO Randall Stephenson on Tuesday told investors that AT&T will deploy a combination of fiber optics and 5G wireless and be able to sell a “true, high-speed internet network throughout the United States” within the next three to five years.

“In three to five years out, there will be a crossover point,” Stephenson told investors. “We go through this all the time in industry. 5G will cross over, performance wise, with what you’re seeing in home broadband. We’re seeing it in business now over our millimeter-wave spectrum. And there will be a place, it may be in five years, I think it could be as early as three, where 5G begins to actually have a crossover point in terms of performance with fiber. 5G can become the deployment mechanism for a lot of the broadband that we’re trying to hit today with fiber.”

Although the remarks sound like a broadband game changer, Stephenson has made this prediction before, most recently during an AT&T earnings call in January, 2019. Stephenson told investors he believed 5G will increasingly offer AT&T a choice of technology to deploy when offering broadband service to consumers and businesses. In high-cost scenarios, 5G could be that choice. In areas where fiber is already ubiquitous, fiber to the home service would be preferred.

Stephenson’s predictions about nationwide service will depend in part on the commercial success of millimeter wave 5G fixed home broadband, which will be required to satisfy broadband speed and capacity demands. Verizon Wireless has been offering fixed 5G in several markets with mixed results. The company’s early claims of robust coverage have been countered by Verizon’s own cautious customer qualification portal, which is more likely to deny availability of service to interested customers than offer it.

But Stephenson remains bullish about expanding broadband.

“So all things considered, over the next three to five years, [with a] continued push on fiber, 5G begins to scale in millimeter-wave, and my expectation is that we have a nationwide, true, high-speed internet network throughout the United States, [using] 5G or fiber,” Stephenson said.

Whether anything actually comes of this expansion project will depend entirely on how much money AT&T proposes to spend on it. Recently, AT&T has told investors to expect significant cuts in future investments as AT&T winds down its government-mandated fiber expansion to 14 million new locations as part of approval of the DirecTV merger-acquisition. In fact, AT&T’s biggest recent investments in home broadband are a result of those government mandates. AT&T has traditionally focused much of its spending on its wireless network, which is more profitable. For AT&T to deliver millimeter wave 5G, the company will need to spend billions on fiber optic expansion into neighborhoods where it will place many thousands of small cell antennas to deliver the service over the short distances millimeter waves propagate.

AT&T could sell a fixed 5G broadband service similar to Verizon Wireless, confine its network to mobile applications, or offer fixed wireless service to commercial and manufacturing users in selected areas. Or it could offer a combination of all the above. AT&T will also need to consider the implications of a fiber buildout outside of its current landline service area. Building fiber optic networks to provide backhaul connectivity to AT&T’s mobile network would not antagonize its competitors nearly as much as the introduction of residential fixed 5G wireless as a home broadband replacement. The competitive implications of that would be dramatic, especially in communities skipped by Verizon FiOS or stuck with DSL from under-investing independent telephone companies like CenturyLink, Frontier, and Windstream. Should AT&T start selling 300+ Mbps fixed 5G wireless in these territories, it would cause significant financial distress for the big three independent phone companies, and could trigger a competitive war with Verizon.

Wall Street is unlikely to be happy about AT&T proposing multi-billion dollar investments to launch a full-scale price war with other phone and cable companies. So do not be surprised if AT&T’s soaring rhetoric is replaced with limited, targeted deployments in urban areas, new housing developments, and business parks. It remains highly unlikely rural areas will benefit from AT&T’s definition of “nationwide,” because there is no Return on Investment formula that is likely to work deploying millimeter wave spectrum in rural areas without heavy government subsidies.

For now, AT&T may concentrate on its fiber buildout beyond the 14 million locations mandated by the DirecTV merger agreement. As Stephenson himself said, “When we put people on fiber, they do not churn.” AT&T has plenty of runway to grow its fiber to the home business because it attracts only about a 25 percent market share at present. Stephenson believes he can get that number closer to 50%. He can succeed by offering better service, at a lower price than what his cable competitors charge. Since 5G requires a massive fiber network to deploy small cells, there is nothing wrong with getting started early and then see where 5G shakes out in the months and years ahead.

Currently there are 3 comments on this Article:

  1. Jim says:

    I know a couple of years ago they started running fiber to MDU/Apartment buildings outside their footprint where Directv owned the coax in building and were using GFast (a type of DSL that can use coax) to offer near gigabit speeds. It didn’t get too much publicity and nothing since that small amount back then.

    AT&T tends to make these forward looking statements that go no where.

    Verizon actually made financial commitments to purchase about 50 million miles of fiber for wiring up 50 metro areas outside their footprint. How that ends up working out long term is still up in the air but after making a couple of mistakes with Yahoo and AOL they appear to be committed to doing what they do best – running a network.

    Tmobile is dedicated to their business focus – aside from maybe getting into video on a small scale down the road but no $50 to $100 billion media purchases.

    AT&T doesn’t really seem to know what they want to be when they grow up.

    • Randall seems to go on these dreamy journeys about AT&T’s future and then gets slapped down by analysts who remind him Wall Street is watching.

      That being said, the convergence of wireless and wired networks has never been a bigger deal. If they are serious about small cells, they will need fiber networks installed deep into neighborhoods because the coverage area of those cells is so small. AT&T’s CFO has consistently made sense by saying if the fiber is already there, why not just hook people up to that instead of messing around with wireless. He’s absolutely right. I can definitely see the two technologies co-existing, but only in urban areas and neighborhoods. This isn’t going to show up in farm country, and it will be years before the suburbs will get service.

      Verizon historically will commit to big spending, then people like Craig Moffett throw hissyfits and establish the talking point that the spending project is too expensive and will not recover initial investments soon enough. He is already doing that with fixed wireless 5G.

      I am still not really sure what Hans Vestberg is all about. He’s not as WIRELESS WIRELESS EVERYTHING WIRELESS as Lowell McAdam was, but he’s not a “fiber is best” Ivan Seidenberg either. He has a past with wireless, but he’s not obsessed with it.

      The good news is that if we’re going to be serious about 5G, you need the fiber there anyway.

      And yes, I agree completely about their media/content business. It is a disaster. Go90 (Go Nowhere), AOL/Yahoo (for the crowd watching Diagnosis Murder reruns who still visit those websites), and their other tragedies illustrate “hip” is not how you’d describe Verzon.

      AT&T is no prize in the content business either, judging from the mess they created with DirecTV and DirecTV Now.

  2. Jason says:

    More AT&T lies. I live on a street that Charter doesnt provide service to, the closest tie in point from my house is 0.6th mile away, Charter said the cost to run a line said 0.6 (3,600ft) mile would be $72,000.
    Several years ago I had AT&T DSL direct, all my neighbors have AT&T DSL and/or home phone service, I canceled my DSL service a few months after my 2yr agreement due to financial problems. About a year later my financial conditions had improved and stabilized and I was looking into online classes, tried to sign up for DSL from AT&T again and was told “Service not available in my area” I cant even get landline home phone service because it also is not available. Many calls to AT&T, my local House Representative, BBB, and AT&T claims not enough available bandwidth in my area, 2 of my neighbors had ended their service, again AT&T says service not available in my area. I even have a green roadside connection box beside my driveway along with about 12 more on my street.
    Several years before this my mother had AT&T DSL at her home, its been disconnected for years but AT&T still says DSL service is available at her address. Go figure. Screw AT&T!

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