Stranded Assets are a Growing Problem
Stranded assets are a growing problem in the facilities-based fixed network business (cable TV or telco).
There are several issues. A growing percentage of potential customers choose not to buy any services at all.
A bigger percentage of homes passed by the networks do buy services, but from another network.
AT&T has said that it will add 11.7 million additional fiber to the home locations within four years of the closing of its acquisition of DirecTV. That’s a lot of locations.
Keep in mind, however, that AT&T’s network in 2012 passed as many as 76 million consumer and small business locations.
AT&T might have about 30 million homes in its fixed network coverage area.
In 2015, AT&T sold service to about nine million consumer customers, nine million business locations and also two million wholesale lines, representing about 20 million locations. If AT&T sold services to nine million consumer locations, it is deriving revenue from about 30 percent of locations passed by its network.
In other words, 70 percent of consumer locations passed the AT&T fixed network now are stranded assets
Verizon serves about 27 million locations. FiOS passes nearly 19 million of those locations. It is likely Verizon has about the same level of stranded consumer assets as AT&T experiences.