Friday, April 26, 2019

While 5G may be the showstopper for Verizon and AT&T, their respective fiber build-outs are the roadies that move and carry the loads.


Wireless and 5G stole the headlines during the companies' recent earnings calls, but their respective fiber build-outs were also mentioned as key elements for both telcos. Here's a look at what AT&T and Verizon are doing with their fiber.

Verizon builds on its One Fiber strategy

Verizon has been a big proponent of fiber ever since the launch of Fios in 2004. Fiber deployments are key to Verizon's existing commercial and residential services as well as its burgeoning 5G applications and services.

Verizon has been dramatically expanding its fiber equipment in support of 5G technologies, such as C-RAN, and densification for wireless services as well as fiber deep for its wireline access services. In order to get its fiber ducks in a row, which included all of its wireless fiber assets and all of its Verizon business assets that were formally under MCI, Verizon embarked on its One Fiber program.


As the name implies, Verizon is putting all of its fiber assets and plans into a single, combined entity in order to plan for its fiber needs.

"Our One Fiber deployment is rapidly expanding the multipurpose fiber network outside our landline footprint," said Verizon CEO and Chairman Hans Vestberg during Tuesday's earnings call, according to a Seeking Alpha transcript. "This will enable new revenue opportunities in the large enterprise, small businesses, public sector and the wholesale businesses, while also delivering expense reductions opportunities.

"We have ramped up installations to a run rate over 1,000 route miles per month, which puts us at the top of all major U.S. fiber providers. All of this is being accomplished within the current levels of our capex guidance."

Verizon's wireline division revenues declined 3.9% to $7.26 billion during the first quarter of 2019 from $7.56 billion in the year-ago period. Its enterprise solutions were down about 4% to $2.14 billion in revenue, compared to $2.24 billion in the same quarter a year ago.

"We're able to offer our services to small, medium business, to enterprise, to even on a wholesale partner basis in geographies that we historically haven't," Verizon CFO Matt Ellis said on the conference call. "So that will bring some incremental revenue opportunities to our wireline customer base in addition to what we're doing with new products as we move forward."

Verizon said its enterprise solutions, partner solutions and business markets revenues declined by 4.5%, 12.5% and 4.9%, respectively, "driven by technology shifts and pricing pressures."

AT&T reaps the fruits of fiber builds

During Wednesday's first quarter earnings report, AT&T announced its business wireline services declined to $6.50 billion, down from $6.75 billion a year ago. Revenue in AT&T's communications segment, which includes high-speed internet, video and legacy voice services was down by 0.4% year over year.

The revenue growth in mobility was more than offset by declines in the entertainment and business wireline sectors, according to AT&T's John Stephens, senior executive vice president and CFO.

Stephens said AT&T had 297,000 AT&T fiber customer gains during the quarter and 45,000 broadband net adds, with broadband revenue growing more than 8% in this year's first quarter. Stephens said AT&T was bullish on its fiber prospects.

"This is one of the more exciting areas of the business in terms of where we have invested heavily," Stephenson said, according to a Seeking Alpha transcript."  Where we can get AT&T fiber, a video product and a mobile product (together), churn rates just drop. Customers love it, the services are all premium services, so this is going to be an important element for us this year and as we continue into 2020."

AT&T CEO and Chairman Randall Stephenson said on the conference call that AT&T's first responder program, FirstNet, has enabled the telco to accelerate its 5G and fiber build outs. Stephenson said that AT&T's fiber network surpasses 20 million consumer and business locations.

"I've got to tell you our fiber product, the AT&T fiber product, is doing very well in the marketplace," Stephenson said. "In short, our network investments are paying off, and we're not done yet."

Source

No comments:

Post a Comment