AT&T Highlights: 5G mid-band spectrum, AT&T Fiber, Gigapower joint venture with BlackRock/disaggregation traffic milestone

On AT&T’s earnings call this week, CEO John Stankey provided these highlights:

  1. AT&T network teams have also consistently outpaced our mid-band 5G spectrum rollout objective. In fact, we now reach 150 million mid-band 5G POPs, more than double our initial 2022 year-end target. Our goal remains to deploy our spectrum efficiently and in a manner that supports traffic growth.  In the markets where we have broadly deployed mid-band 5G, 25% of our traffic in these areas already takes advantage of our mid-band spectrum.
  2. We also expect to continue our 5G expansion, reaching more than 200 million people with mid-band 5G by the end of 2023.
  3. AT&T had more than 1.2 million AT&T Fiber net adds last year. The fifth straight year we’ve totaled more than 1 million AT&T Fiber net adds. And after 2.9 million AT&T Fiber net adds over the last 2.5 years, we’ve now reached an inflection point where our fiber subscribers outnumber are non-fiber DSL subscribers. The financial benefits of our fiber focus are also becoming increasingly apparent as full year fiber revenue growth of nearly 29% has led to sustainable revenue and profit growth in our Consumer Wireline business. As we scale our fiber footprint, we also expect to drive margin expansion.
  4. AT&T has the nation’s largest and fastest-growing fiber Internet, and we expect continued healthy subscriber growth as we grow our fiber footprint. As we keep expanding our subscriber base will drive efficiencies in everything we do.  AT&T considers fiber a multiyear opportunity that will transform the way consumers’ and businesses’ growing connectivity needs are met in the ensuing decade and beyond.
  5. AT&T Fiber will be passing 30 million-plus consumer and business locations within our existing wireline footprint by the end of 2025. We finished last year with approximately 24 million fiber locations passed, including businesses, of which more than 22 million locations are sellable, which we define as our ability to serve. We remain on track to reach our target of 30 million plus passed locations by the end of 2025. The simple math would suggest 2 million to 2.5 million consumer and business locations passed annually moving forward. As we previously shared, build targets will vary quarter-to-quarter in any given year based on how the market is evolving.
  6. AT&T’s Gigapower joint venture announcement with a BlackRock infrastructure fund has not yet closed, we’re very excited about the expected benefit. Through this endeavor, Gigapower plans to use a best-in-class operating team to deploy fiber to an initial 1.5 million locations, and I would expect that number to grow over time. This innovative risk-sharing collaboration will allow us to prove out the viability of a different investment thesis that expanding our fiber reach not only benefits our fiber business, but also our mobile penetration rates. But what makes me most enthusiastic about this endeavor is that we believe Gigapower provides us long-term financial flexibility and strategic optionality and what we believe is the definitive access technology for decades to come, all while sustaining near-term financial and shareholder commitments.
  7. AT&T sees huge opportunities to connect people who previously did not have access to best-in-class technologies through broadband stimulus and Broadband Equity, Access, and Deployment (BEAD) funding. As I shared before, we truly believe that connectivity is a bridge to possibility in helping close the digital divide by focusing on access to affordable high-speed Internet is a top priority of AT&T. The intent of these government programs is to provide the necessary funding and support to allow both AT&T and the broader service provider community that means to invest alongside the government at the levels needed to achieve the end state of a better connected America.
  8. Our commitment to fiber is at the core of our strategy. In footprint, we’re on track to deliver our 30 million plus location commitment and we’re building the strategic and financial capabilities to take advantage of further opportunities as they emerge.

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AT&T’s open disaggregated core routing platform was carrying 52% of the network operators traffic at the end of 2022, according to Mike Satterlee, VP of AT&T’s Network Core Infrastructure Services in an interview with SDxCentral.  Satterlee described this platform as the carrier’s “common” or “core backbone,” which supports about 594 petabytes of data traffic per day.  This core backbone is a multi-part architecture spanning from AT&T’s nationwide network switch and cloud provider connections to its consumer- and enterprise-facing broadband and mobility services.

AT&T’s core platform uses Broadcom’s Jericho2 hardware design and Ramon switching chips, the carrier’s distributed disaggregated chassis (DCC) white box router architecture, and Israel based DriveNets Network Cloud (DNOS) software.  It’s fed by AT&T’s edge router platform that sits in regional connection points. It uses the Broadcom silicon, Cisco software platform, and hardware from UfiSpace.

Satterlee said AT&T is running a nearly identical architecture in its core and edge environments, though the edge system runs Cisco’s disaggregates software. Cisco and DriveNets have been active parts of AT&T’s disaggregation process, though DriveNets’ earlier push provided it with more maturity compared to Cisco.

“DriveNets really came in as a disruptor in the space,” Satterlee said. “They don’t sell hardware platforms. They are a software-based company and they were really the first to do this right.”

AT&T began running some of its network backbone on DriveNets core routing software beginning in September 2020. The vendor at that time said it expected to be supporting all of AT&T’s traffic through its system by the end of 2022.

“It’s completely open in the sense that either vendor software could run in either places of the network,” Satterlee explained, adding that this was very helpful during the COVID-19 pandemic. “By having a common platform it’s just a matter of switching out the [network operating system] so we were able to very quickly redirect equipment for different use cases within AT&T and it was just a simple software change controlled by SDN.”

AT&T is targeting 65% of its traffic running on the disaggregated architecture by the end of this year. This will be important to support AT&T’s fiber and 5G push, which was enhanced late last year through a deal the carrier struck with BlackRock to expand its fiber footprint.

John Gibbons, assistant VP for AT&T’s Network Infrastructure Services, added that this also paves the way for the carrier to roll out 800-gigabit support for its backbone.  “We don’t have to swap out the core router to get to 800-gig,” Gibbons said. “We can actually add to the current chassis. … We can add the new box to start growing it out from there. That’s the flexibility. It’s like the building-block model.

“Pretty much everything we spoke about supports our two biggest initiatives, which is growing the AT&T fiber broadband as well as 5G, and it’s all the underpinnings of those services,” Gibbons said.

References:

https://investors.att.com/~/media/Files/A/ATT-IR-V2/financial-reports/quarterly-earnings/2022/4Q22/4q22-earnings-t-usq-transcript-2023-01-25.pdf

https://investors.att.com/~/media/Files/A/ATT-IR-V2/financial-reports/quarterly-earnings/2022/4Q22/ATT_4Q22_Earnings.pdf

https://www.sdxcentral.com/articles/interview/att-disaggregation-drive-hits-traffic-milestone/2023/01/

AT&T and BlackRock’s Gigapower fiber JV may alter the U.S. broadband landscape

AT&T Deploys Dis-Aggregated Core Router White Box with DriveNets Network Cloud software

 

 

 

4 thoughts on “AT&T Highlights: 5G mid-band spectrum, AT&T Fiber, Gigapower joint venture with BlackRock/disaggregation traffic milestone

  1. With the AT&T/BlackRock Gigapower joint venture and the spin-off of the Warner media assets, it seems like AT&T is truly getting back to its Ma Bell roots.

  2. AT&Ts enterprise efforts are centered around two key pieces of hardware: its universal CPE and its remote access gear.

    John Gibbons, AT&T’s AVP of Network Infrastructure Services, said the operator has between 40,000 and 50,000 universal CPE units deployed with customers. Vertical Systems Group hasn’t released its 2022 rankings yet, but AT&T held the number one position in the firm’s 2021 U.S. Carrier Managed SD-WAN Services Leaderboard.

    As AT&T continues to push for more disaggregation across its network, Satterlee noted “It’s very important we have an ecosystem around this whole portfolio we’re developing.” To that end, he noted that as it explores different use cases, AT&T works with merchant silicon providers like Broadcom to ensure their chips can support the requirements of a telco environment. It also makes its white box specs public for manufacturers to use and works with vendors like DriveNets, Cisco, Juniper and Ciena on the network operating systems needed to run on the hardware.

    “We’re truly separating hardware and software,” he concluded. “This was a play that was run by the hyperscalers, we’re just really applying it to the telco network environment.”

    https://www.fiercetelecom.com/telecom/att-says-it-has-deployed-140k-remote-access-units-enterprise

  3. AT&T has narrowed its business to focus on mobile and broadband to achieve more stable and predictable growth, which is starting to yield results. The Mobility segment — its largest at over 65% of sales — has been posting steady service-revenue gains on postpaid phone net additions. This will likely continue as AT&T boosts network capacity and deploys mid-band spectrum to 160 million people, which is allowing it to more effectively compete in 5G. It’s also rapidly expanding the fiber network, which has yielded solid user and revenue increases. It plans to pass 30 million locations with fiber by year-end 2025.

  4. AT&T and Charter Communications are best positioned to benefit from the multi-billion-dollar Broadband Equity Access and Deployment (BEAD) program based on state-by-state allocations and the presence of each operator in those states, reckon analysts that have broken down the numbers.

    “The larger the presence an operator has in a state with a sizable allocation of BEAD funding, the greater the opportunity there is for it to see benefits from a build-out near its existing footprint and fill-in additional pockets across its DMAs [designated market areas] with edge-outs,” the analysts at ISI Evercore surmised in a research note. “In that context, we highlight that AT&T and Charter over-index to states that received the lion’s share of BEAD allocation.”

    AT&T and Charter have 33% and 27%, respectively, of their residential broadband subs, come from the two top BEAD states – Texas and California – ISI Evercore pointed out.

    https://www.lightreading.com/cable-tech/atandt-charter-have-biggest-bead-opportunity—studies/d/d-id/785515?

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