Fiber to home cost and time to market, plus the firm’s continuing need to deleverage (reduce debt) seem to have convinced AT&T it is time to take on a joint venture partner to finance new infrastructure.
And AT&T’s upgrade requirements are fairly daunting. Of roughly 57 million U.S. homes passed, only a bit more than a quarter of locations have been upgraded to fiber access. That means potentially 40 million locations that conceivably could be rebuilt using optical fiber access.
At roughly $800 just for the network to pass those locations, the capital investment could be close to $33 billion. Additional capital would have to be invested to activate customer locations. At 40 percent take rates, that might imply connecting 16 million locations.
At $600 per customer location, that implies an additional investment of perhaps $9.6 billion. Altogether, AT&T might have to invest about $42.6 billion to activate fiber access for the 40 percent of potential customers presently served by copper-connected home broadband facilities.
But AT&T does not presently view all those homes passed as candidates for upgrades.
AT&T’s decision to move into new markets hinges on at least three factors, Chief Executive Officer John Stankey has said. The area has to be undeserved with broadband and be profitable for the company. AT&T also has to be the first provider of fiber to the home.
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