Fiber Connect 2023: Telcos vs Cablecos; fiber symmetric speeds vs. DOCSIS 4.0?

Derek Kelly, Lumos’ VP of market development, went as far as to say that “fiber is always the answer,” and suggested cable alternatives will not stand the test of time.  Kelly claimed that as $42.5 billion is set to roll out through the Broadband, Equity, Access, and Deployment (BEAD) program, relying on investments in fiber will provide stability over the next 15 years.

“I think we’ve all seen DSL and fixed wireless projects get funded over the last couple of years. And then what happens? Those areas ultimately become blocked from future funding until the definitions change. And then they become available for another grant. And we see public dollars going on top of previous public dollars.” Kelly said.  He noted Lumos defines “unserved being no cable, underserved means they’re stuck with cable. And then there’s everyone else that has life-changing fiber. So we don’t care about speeds at this point.”

While acknowledging the need for funding in areas without even cable access, he noted another large-scale program after the BEAD initiative is unlikely. “Cable modems aren’t going to keep up with these definitions forever. Their lobbyists aren’t going to be able to convince people forever just make sure that they just barely can meet the definition of unserved,” he said. “We have communities that don’t have access to fiber. The FCC and NTIA may consider them as served today. And I agree the funding should go to areas that don’t even have cable yet, but the time is coming, where cable is going to be what’s unserved or underserved.”

Fiber execs mostly targeted cable’s “Achilles heel,” which is its lacking symmetric speed capabilities (upstream and downstream).

AT&T Fiber’s EVP Chris Sambar told a large keynote audience, “Don’t ask cable about symmetrical speeds, they don’t even know what that means.”  In an earlier blog post, he wrote, “Fiber is superior technology for things like uploading large files and increased bandwidth. It delivers an amazing experience, with multi-gig speeds and equally fast up- and downlinks. It’s also critical for powering technologies like 5G (backhaul) and edge computing (fiber access for ultra low latency). And with a far superior upgradeable capacity to handle soaring demand for high-quality bandwidth well into the future.”

However, Jay Lee, CTO of ATX Networks said that cable operators are “right in the throes” of upgrading their networks to get to full DOCSIS 3.1, and that high-split type of architecture will allow them to achieve competitive speeds in the upstream.  “Their downstream is probably two gigabits per second now and there’s a line of sight to be more than that,” he said. “Is it 10 Gig PON? No. But it’s still in that gig threshold that I think is as important from a consumer standpoint,” he added.

The next plan phase for cable is to move up to DOCSIS 4.0, which starts to get toward multi-gigabit upstream and five-plus in the downstream, sometimes upwards of 10 in the downstream. Lee noted that plenty of cable companies are doing “lots” of their own fiber buildouts.  “Some of the statements made on cable were like ‘they can’t do anything about it’ and certainly they can. DOCSIS 3.1 high-split is just the start.”

Jeff Heynen, VP at Dell’Oro Group echoed Lee’s comments, noting that current DOCSIS 3.1 mid-split can deliver 2 Gbps downstream and up to 200 Mbps upstream, which is what Comcast is offering today. Charter and Cox’s high-split offerings can go even further, delivering 2 Gbps downstream and up to 1 Gbps upstream.

A recent interoperability test conducted by Cable Labs showed that DOCSIS 4.0 modems paired with CCAP and vCMTS platforms in high-split configurations could deliver up to 8.6 Gbps downstream and 1.5 Gbps upstream.  Cable operators have claimed DOCSIS 4.0 modems should become available later this year, with volumes in 2024. Those downstream speeds would give cable “very comparable service tiers to most fiber providers,” Heynen said. “And this is before the outside plant is upgraded to DOCSIS 4.0, which will be capable of delivering up to 10 Gbps down and 6 Gbps up.”  However, other analysts have hinted that DOCSIS 4.0 rollouts will take longer than cable companies are saying.

References:

https://www.fiercetelecom.com/broadband/cable-fiber-rivalry-separating-fact-fiction

https://www.business.att.com/learn/articles/docsis-vs-fiber-why-knowing-the-difference-matters.html

https://about.att.com/innovationblog/2022/sambar-fiber-expansion.html

Zayo expands fiber network infrastructure, including new long-haul dark fiber routes, increased fiber capacity, additional 400 Gbps

Zayo, a leading global communications infrastructure provider, announced a series of expansions to its independent fiber network infrastructure, including new long-haul dark fiber routes, increased fiber capacity for existing routes, additional 400G-enabled routes and new IP PoPs.  A digital-first world requires continued investment in infrastructure, of which Zayo is leading the charge. These updates, which build upon Zayo’s significant plans to grow and modernize its network, will ensure customers have the speed, resilience and flexibility needed to stay ahead of digital demand.

“The network our future requires does not exist today. A digital-first world requires continued and intentional investment in infrastructure, of which Zayo is leading the charge. Our continued expansion and modernization of our long-haul dark fiber, wavelength, and Tier-1 IP infrastructure is critical in ensuring our customers have the speed, resilience and flexibility they need in their network to stay ahead of this increasing digital demand,” said Bill Long, Chief Product Officer at Zayo.

In April, Zayo unveiled significant plans to grow and modernize its network, including the addition of nearly 3,000 route miles and more than 700,000 fiber miles to its global network. The company has begun building these new long-haul dark fiber routes to provide its customers with diverse routing options and a customizable, robust and scalable network. The new routes are built entirely underground to provide the highest level of security and redundancy for customers.

Zayo’s newest long-haul dark fiber routes include:

  • St. Louis to Indianapolis: Expands connectivity in these growing markets, bypassing the heavily trafficked Chicago metro area with four In-Line Amplification (ILA) sites in key markets along the route.

  • Chicago to Omaha Overbuild: Provides the most direct route between Denver and Chicago, including a new high fiber count cable that connects 11 ILA sites in strategic markets, facilitating seamless network connections for customers. As a heavily used route, this overbuild will allow for more capacity.

Network Modernization with 400G:

400G routes provide better routing performance, stability, high bandwidth and reduced pricing for Zayo’s customers. The enhanced capacity from these routes supports customers with exponential growth needs driven by emerging technologies like 5G, generative AI, cloud adoption, IoT and edge computing.

With four new 400G-enabled routes made operational in the second quarter of 2023 and two more slated for completion in Q3, Zayo is expanding high-bandwidth options between key cities, including:

  • Las Vegas to Phoenix

  • Kansas City to Indianapolis

  • Dallas to East St Louis

  • Albany to Boston

  • Denver to Dallas (a direct route scheduled for completion in Q3 2023)

  • Atlanta to DC (scheduled for completion in Q3 2023)

IP Infrastructure Improvements:

To enhance overall customer experience, Zayo has bolstered its infrastructure with new IP PoPs that ensure a more seamless and uninterrupted communication experience for its customers. Zayo has added 14 neutral data centers in Q1 2023 and nine in Q2 2023 across North America, including:

Q1 2023:

  • 1050 W Pender St, Vancouver, BC, Canada

  • 8636 S Peoria St, Englewood, CO, USA

  • 1400 Federal Blvd, Carteret, NJ, USA

  • 525 D St NW, Quincy, WA, USA

  • 23403 E Mission Ave, Liberty Lake, WA, USA

  • 179 Social Hall Ave, Salt Lake City, UT, USA

  • 3011 Lafayette St, Santa Clara, CA, USA

  • 1 Enterprise Ave N, Secaucus, NJ, USA

  • 400 Minuteman Rd, Andover, MA, USA

  • 1275 K St NW, Washington, DC, USA

  • 2220 De La Cruz Blvd, Santa Clara, CA, USA

  • 5660 W Badura Ave (NAP15), Las Vegas, NV, USA

Q2 2023:

  • 1250 Boul Rene-Levesque O, Montreal, QC, Canada

  • 3015 Winona Ave, Burbank, CA, USA

  • 3011 S 52nd St, Tempe, AZ, USA

  • 5225 W Capovilla Ave, Las Vegas, NV, USA

  • 8375 Dominion Pkwy, Plano, TX

  • 6653 Pinecrest Dr, Plano, TX

  • 3470 Gabel Rd, Billings, MT, USA

  • 6428 Westwood Blvd, Orlando, FL, USA

Zayo is one of the only communications infrastructure providers actively pursuing new building and modernization of its infrastructure. In June, Zayo was awarded a $92.9M grant from the National Telecommunications and Information (NTIA) Middle Mile Program—the only national provider to receive funding—to expand network infrastructure to unserved and underserved communities across eight states. As part of its aggressive growth strategy, Zayo has also continued to expand its global footprint, including new connections for its high-capacity network across EuropeMexico, and South America.

Zayo says it will continue to invest in future-proofing its network and services to connect what’s next for its customers.

About Zayo Group Holdings, Inc:

For more than 15 years, Zayo has empowered some of the world’s largest and most innovative companies to connect what’s next for their business. Zayo’s future-ready network spans over 16.8 million fiber miles and 141,000 route miles. Zayo’s tailored connectivity and edge solutions enable carriers, cloud providers, data centers, schools, and enterprises to deliver exceptional experiences, from core to cloud to edge. Discover how Zayo connects what’s next at www.zayo.com and follow us on LinkedIn and Twitter.

References:

https://www.zayo.com/network/

https://www.zayo.com/newsroom/zayo-future-proofs-network-with-latest-infrastructure-expansions/

Zayo announces “Waves on Demand,” security enhancements, and network growth

Zayo to deploy 400G b/s network across North America and Western Europe

Zayo’s largest capacity wavelengths deal likely for cloud data center interconnection (DCI)

Point Topic Comprehensive Report: Global Fixed Broadband Connections at 1.377B as of Q1-2023

Global fixed broadband connections reached 1.377 billion as of Q1-2023, up by 83 million from a year earlier and reflecting an annual growth rate of 1.59%, according to Point Topic.

There was a decline in fixed broadband subscriptions in 18 countries[1] which mainly include emerging markets, as well as some saturated markets such as Singapore. However, while there were fluctuations in growth rates across regions and markets, the overall trend indicates a steady expansion of global broadband connectivity.

Highlights:

  • Among global regions, Africa, East Asia and America Other saw the fastest growth in broadband connections (2.9%, 2.2% and 1.8%), not least due to healthy increases in broadband subscribers in the vast markets of Egypt, Brazil and China.

  • The share of FTTH/B in the total fixed broadband subscriptions continued to increase and stood at 66.7%. Broadband connections based on other technologies saw their market shares shrink further, with an exception of satellite and wireless (mainly FWA).

  • VDSL subscriber numbers grew in ten countries, while they dropped in at least 22 markets as consumers migrated to FTTH/B.

  • The highest FTTH/B broadband subscriber growth rates in Q1 2023 were in Algeria, Peru and UK.

At 21.6 million, the quarterly net adds were close to the figure we recorded a year ago, though the growth rate (1.59%) was slower, compared to 1.77% in Q1 2022, with global inflation and economic instability having an impact.

Table 1. Global broadband subscribers and quarterly growth rates.
Source – Point Topic.

East Asia continued to dominate in Q1 2023, maintaining its position as the largest market with a 49.6% share of global fixed broadband subscribers. This substantial market share is primarily driven by China with its vast population.

In Q1 2023, broadband subscriber base grew faster in China, Hong Kong and Korea, compared to Q4 2022. As a result, the region’s net adds share globally went up from 63.2% to 68.8%. Asia Other accounted for 10.8% of the global broadband market, similarly to the previous quarter, though the region’s net adds share went down from 12.8% to 9.4%.

Table 2. Share of fixed broadband subscribers and trends in net adds by region. Source – Point Topic

Europe’s market shares remained rather consistent, though Eastern Europe saw their net adds share decline from 3.4% to 0.5%, as a result of slower growth in almost all markets and the decline in broadband subscribers in Russia having an especially significant impact due to its market size.

Similarly, Americas maintained relatively stable market shares of 10.3% and 8.1% respectively, while America – Other’s net adds share increased from 7.8% to 9%, driven by higher growth in such sizeable markets as Brazil, Mexico, Colombia and Chile, to name a few.

Figure 2. Share of net adds of fixed broadband subscribers by region. Source – Point Topic.

Next Point Topic looks at fixed broadband penetration among population, comparing it to growth rates across the regions.

Africa and Asia Other continue to have relatively low fixed broadband penetration rates among their populations. In Q1 2023, this metric in Africa stood at 4.6%, while Asia Other reached 5.6%. These figures indicate the potential for future expansion in these regions. Not surprisingly, Africa also recorded the highest quarterly growth rate of 2.9%.

The markets of East Asia and America Other followed closely with growth rates of 2.2% and 1.8% respectively, despite East Asia already having the highest population penetration at 41.9%. This reflects a widespread adoption of fixed broadband services in East Asia, while America Other showcases steady growth in a region with significant potential, where broadband penetration is among the lowest, at 17.2%.

Eastern Europe displayed a modest growth rate of 0.2% with a population penetration of 24.8%. Some markets in this region still have a lot of headspace when it comes to broadband adoption but the growth was sluggish, likely due to economic pressures. Other European regions showed a slightly higher growth rate, with Europe Other at 0.5%, coupled with the second highest population penetration of 39.4%. These figures indicate a mature market with limited growth opportunities.

Figure 3. Penetration and quarterly growth by region (Bubble size represents the size of the market).   Source – Point Topic.
Oceania saw a negative growth rate of -0.3% while the population penetration there stood at 32.2%. The negative growth this quarter was caused by fast decline in copper and some churn in cable broadband connections, while new fibre connections did not fully compensate for this drop.  The latest data reveals diverse trends in fixed broadband subscriber growth across regions. Africa and Asia Other exhibit potential for expansion with their low penetration rates and high quarterly growth rates. East Asia demonstrates strong adoption of fixed broadband services despite already high population penetration, while the developed European markets face limited growth opportunities due to their mature nature.

Among the largest twenty broadband markets all but one saw fixed broadband subscribers grow in Q1 2023, although in ten of them the growth was slower than in the Q4 2022. There was a slight drop in broadband subscribers in Russia which is under international sanctions.

Table 3. Changes in quarterly growth in fixed broadband subscribers in the largest 20 markets.  Source: Point Topic.

The less saturated broadband markets of India, Egypt, Brazil and Mexico recorded the highest quarterly growth rates in Q1 2023, all higher than 2%. China recorded an above 2% growth as well. At the other end of the spectrum, the mature markets of Germany, France, Japan, UK, and Italy saw modest growth rates at below 0.5%. At the same time, Italy was among the countries that saw one of the largest improvements in growth rates, from -0.44% in Q4 2022 to 0.04% in Q1 2023, as its GDP growth also went from negative to positive in that period[2]. Mexico, China and Brazil recorded the largest improvements in their growth rates, at +1.14.%, +0.52% and +0.41% respectively.

Between Q4 2022 and Q1 2023, the share of FTTH/B connections in the total fixed broadband subscriptions went up by 0.7% and stood at 66.7%. Broadband connections based on other technologies saw their market shares shrink further, with an exception of satellite and wireless (mainly FWA), which remained stable.

Table 4. Changes in broadband technology market shares. Source – Point Topic.

FTTx (mainly VDSL) share stood at 6.7%[3]. VDSL subscriber numbers grew in ten countries (including modest quarterly increase in the large VDSL markets of Turkey, Czech Republic, Greece and Germany, for example), while they fell in 22 other markets as consumers migrated to FTTH/B.

Table 5. Top 15 markets by FTTH/B growth rates (countries with at least 0.5m fibre broadband subscribers).   Source: Point Topic.
Editor’s Note:  We don’t know why India appears twice in Table 5?
………………………………………………………………………………………………….
As fibre broadband continues to establish its dominance, we examined the growth of FTTH/B in markets with at least 0.5 million fibre broadband connections. In Q1 2023, Algeria led the list with a 32.1% growth rate. Peru followed with 14.3%, while the United Kingdom also showcased considerable growth of 11.6%, as the country benefitted from a rapid rollout of fibre networks by multiple operators.

It remains to be seen whether consumers will continue to gravitate toward fibre broadband offerings, particularly as global economies face potential slowdown and inflationary pressures.

In terms of FTTH/B broadband net additions in Q1 2023, China continued to maintain a significant lead with 13.5 million while Brazil added 1.4 million. Mexico is back in the top ten league, having pushed out Argentina this quarter.

Table 6. Top ten markets by FTTH/B broadband subscriber net additions. Source: Point Topic.
Between Q1 2022 and Q1 2023, the global landscape of broadband technologies witnessed significant shifts. The number of copper lines experienced further decline of 9.6%, while FTTH/B connections saw growth of 11.2% (Figure 4), as consumers continued to show preference for more advanced options and transition away from older and slower technologies. Cable broadband exhibited modest growth at 0.5%, maintaining relevance in certain markets.

Satellite broadband also saw a modest growth of 1.3% while wireless broadband demonstrated continued relevance with a respectable growth rate of 4.9%. These trends can be attributed to the demand for connectivity in remote or underserved areas where traditional broadband infrastructure is not feasible.

Figure 4. Annual growth in subscriber numbers by technology.
Source – Point Topic.

The diverse growth rates among different broadband technologies highlight the dynamic nature of the industry as consumers seek more reliable and high-speed connections. The significant increase in FTTH/B connections and the growth of satellite and wireless broadband underline the ongoing efforts to bridge the digital divide and ensure connectivity for all.

The top ten countries by fixed broadband subscribers remained unchanged (Figure 5). As of Q1 2023, China exceeded 0.6 billion fixed broadband subscribers, having added 14.6 million in the quarter. Also, the country is approaching 1.2 billion 5G subscribers, with the service now being used by 84% of the population.

Figure 5. Country ranking by fixed broadband subscribers. Source – Point Topic.

Overall, the latest fixed broadband subscriber data reveals a clear trend towards advanced, high-speed broadband solutions like FTTH/B, while older technologies such as copper-based broadband (ADSL and VDSL) are experiencing a decline, suggesting that the broadband landscape is continuously evolving to meet the growing demand for faster and more reliable connectivity.

References:

https://www.point-topic.com/post/global-broadband-subscriptions-q1-2023

Point Topic: Global Broadband Tariff Benchmark Report- 2Q-2022

Point Topic: Global fixed broadband connections up 1.7% in 1Q-2022, FTTH at 58% market share

 

Altice Launches Optimum 8 Gig Fiber Symmetric Internet Service

Altice USA’s Optimum is the latest provider to trot out a symmetrical 8-gig fiber tier, which Altice said is now available to more than 1.7 million residents and businesses across the company’s fiber footprint.  By year end, Optimum 8 Gig Fiber will be available to nearly 3 million passings and will expand as the Company’s fiber network build continues.

This launch represents the largest deployment of 8 Gig internet speeds in the country and cements Optimum as the nation’s largest 8 Gig internet provider, delivering the fastest Fiber Internet available in its serviceable footprint that is four times faster than Verizon, 60% faster than Frontier, and 32 times faster than T-Mobile 5G Home Internet.

                                                                        Reliability 

“After launching 2 and 5 Gig symmetrical Fiber Internet speeds last year, Optimum is pleased to have invested even further in our network and infrastructure to bring next level 8 Gig symmetrical internet speeds to our fiber footprint,” said Leroy Williams, Chief Growth Officer, Optimum. “Optimum is now the nation’s largest 8 Gig Fiber Internet provider, and availability will continue to increase as we deploy fiber to more homes and businesses as we solidify our position as the connectivity provider of choice across all the communities we serve. We look forward to bringing these reliable and faster speeds, along with an enhanced customer experience, to meet our customers’ growing data needs today and into the future.”

Backed by Optimum’s 100% Fiber Internet network with 99.9% network reliability, Optimum’s 8 Gig Fiber Internet offers 8 Gig symmetrical upload and download speeds to support the most data-intensive applications such as AR/VR, gaming, graphic design, and video production, all while providing increased bandwidth that can simultaneously connect 100+ devices to the internet at once. The service is delivered directly into the home via the Optimum Fiber Gateway to enable fast, reliable WiFi in the home or business, with extenders available for extra coverage.

“Optimum’s Fiber is deployed using XGS-PON, an advanced technology that enables multi-gigabit symmetrical speeds and that is superior to the legacy GPON standard used by many other fiber providers,” said Pragash Pillai, Chief Technology and Information Officer, Optimum. “As we continue to bring faster, more reliable service to customers through this state-of-the-art technology, the strength of Optimum’s Fiber network goes unmatched.”

Optimum continues to be a leader in the deployment of multi-gigabit internet speeds across the nation, having launched 2 and 5 Gig internet service across its fiber footprint in the New York tri-state area last year, and now adding an additional 8 Gig speed tier to more homes and businesses on its 100% Fiber Internet Network.

An Altice rep told Fierce the 8-gig offering is currently live in all markets where multi-gig speeds are available, which is “predominantly” in the New York tri-state area. Consumers can check the Optimum website to see if they’re eligible for the service.  “In addition to multi-gig, up to 1 gig speeds are available in more than 90% of the Optimum footprint,” the rep told Fierce.

8-gig speeds come after Altice last year released 2-gig and 5-gig tiers across New York, New Jersey and Connecticut. Altice said “nearly 3 million passings” will have access to 8-gig fiber by year-end, and that number will increase as Altice ramps up its fiber expansion.

For more information on Optimum’s multi-gig speed tiers and other fiber offerings, prospective customers can visit Optimum.com/8Gig. Existing customers can call 1.866.347.4784 to upgrade.

About Optimum:

Optimum is a brand of Altice USA, one of the largest broadband communications and video services providers in the United States, delivering broadband, video, and mobile services to nearly 5 million residential and business customers across 21 states. The company operates a4, an advanced advertising and data business, which provides audience-based, multiscreen advertising solutions to local, regional and national businesses and advertising clients. Altice USA also offers hyper-local, national, international and business news through its News 12, Cheddar News and i24NEWS networks.

………………………………………………………………………………………………………………………………………………….

Other 8-gig Network Providers:

Windstream’s Kinetic has also gotten into the 8-gig game, as a spokesperson recently told Fierce it will make 8-gig speeds available to 400,000 households across its 18-state footprint. Others that have rolled out 8-gig tiers include C Spire, Google Fiber, Lumen Technologies and TDS Telecom. Google Fiber is particularly stepping up its speeds, as it’s seeking testers for its nascent 20-gig product.

References:

https://www.businesswire.com/news/home/20230709466071/en/Ultra-Fast-Optimum-8-Gig-Symmetrical-Fiber-Internet-Service-Launches-Across-More-Than-1.7-Million-Passings-Representing-the-Widest-Availability-of-8-Gig-Speeds-in-the-United-States

https://www.fiercetelecom.com/broadband/altice-usa-unveils-8-gig-optimum-fiber-tier

 

Perú’s First Open Access Wholesale Fiber Optic Network

KKR, Telefónica Hispanoamérica, and Entel today announced agreements under which KKR will acquire a majority interest in PangeaCo and the existing fiber optic networks of Telefónica del Perú and Entel Perú to build Perú’s first nationwide open access wholesale fiber optics company with the mission to bring greater access to fiber optics connectivity across the country. The transaction will combine the existing fiber optic networks of PangeaCo, Telefónica del Perú, and Entel Perú into an independent company controlled by KKR. The newly formed network will be open access, allowing usage to all internet service providers for the first time. KKR plans to make approximately US$200 million of additional investment to more than double the ultra-fast fiber network from more than 2 million homes passed today to reach 5.2 million homes passed across 86 provinces by the end of 2026.

Telefonica did not disclose the value of the transaction but said the deal would cut its debt by 200 million euros ($217.8 million).  According to a banking source close to the deal, the transaction valued 100% of the unit at about 550 million euros, including debt.

Under the terms of the agreement, KKR will acquire a controlling interest in PangeaCo, which will subsequently acquire the existing fiber optic networks of Telefónica del Perú and Entel Perú. Through the combination of these networks, KKR will establish ON*NET Fibra de Perú as the new name for the platform which will independently build and operate the nation’s largest fiber optic network with world-class quality standards. KKR will own a 54% interest in ON*NET Fibra de Perú alongside Telefónica Hispanoamérica, which will own 36%, and Entel Perú, which will own 10%.

The entire ON*NET Fibra de Perú fiber optic network will be open to use by all internet service providers, increasing competition in the wholesale market. Telefónica del Perú and Entel Perú will be anchor tenants on the expanded open access network, enabling both providers to reach a greater number of customers with ultra-high-speed offerings. The transaction does not impact the services provided by existing customers of PangeaCo, Telefónica del Perú or Entel Perú. Upon closing of the transaction, customers will benefit from the scale of the larger network.

In Perú, approximately 88% of households have mobile or fixed internet service, but less than 35% have access to high-speed fiber optic networks.1 KKR, as the controlling shareholder, intends for ON*NET Fibra de Perú to more than double the households reached by fiber optic network, including reaching municipal areas outside of Lima as well as middle- and low-income households. This transaction demonstrates continued investor confidence in Peruvian infrastructure and the commitment of the companies to contribute to the sustainable development of the digital connectivity in the country.

Today’s announcement builds on KKR’s success in expanding nationwide connectivity and increasing competition in Chile and Colombia. ON*NET Fibra de Chile has expanded access from 2.4 million homes passed to 3.7 million homes passed since KKR signed the acquisition in February 2021 and ON*NET Fibra de Colombia has increased homes passed from 1.2 million to 2.4 million since signing in July 2021.2 Both companies have attracted multiple internet service providers to utilize their open access networks.

KKR is making the investment through its KKR Global Infrastructure Investors III fund and plans to provide operational support to ON*NET Fibra de Perú through NEXO LatAm, a digital infrastructure business supporting KKR’s Infrastructure strategy across Latin America. KKR and NEXO LatAm have significant experience supporting the successful expansion of open access fiber optic investments.  The transaction is subject to regulatory approvals, including the approval of the Peruvian antitrust agency (INDECOPI).

…………………………………………………………………………………………………………………………………………………….

From telecoms.com:

When Telefonica first sold a stake in its Chilean fibre business to KKR it had a footprint of 2.4 million homes passed. The deal valued the entire business at $1 billion. The Colombian fiber business that KKR bought into was valued at half that amount and just over half the footprint:1.2 million homes. Admittedly, the Colombia deal was inked two years ago and Chile even longer ago, and a fair bit has changed in the economic situation in that time. However, we can get a sense of the scale of spend we might be looking at.

KKR  wants to share the progress made by those Chilean and Colombian ventures. ON*NET Fibra de Chile passed 3.7 million homes as of the end of 2022, while ON*NET Fibra de Colombia had doubled the number of homes passed to 2.4 million, it said, adding that both have attracted multiple ISP customers.

That surely bodes well for the new venture’s aims in Peru, where at present around 88% of households have mobile or fixed internet service, but less than 35% have access to high-speed fibre networks, KKR said, citing data from regulator OSIPTEL and market research firm Omdia (owned by Informa).

It should also help smooth the regulatory process. The deal needs a number of approvals, including that of Peruvian antitrust agency INDECOPI, but it’s hard to foresee any major difficulties, given that this is an established model across the region and one that seems to be working.

 

References:

https://www.businesswire.com/news/home/20230706781845/en/KKR-Invests-in-Per%C3%BA%E2%80%99s-First-Open-Access-Fiber-Optic-Network-to-Bridge-the-Digital-Divide-and-Increase-Competition-in-the-Market

https://www.reuters.com/markets/deals/telefonica-sells-controlling-stake-peruvian-fibre-optic-network-kkr-2023-07-07/

https://telecoms.com/522583/telefonica-entel-and-kkr-ink-peru-fibre-deal/

STELLAR Broadband offers 10 Gigabit Symmetrical Fiber Internet Access in Hudsonville, Michigan

STELLAR Broadband, a fiber internet and technology service provider, will provide leading edge technologies and Internet connectivity up to 10Gbps to Elmwood Lake Apartments in Hudsonville, Michigan.

Elmwood Lake Apartments is a suburban haven of elevated comfort, where sweet serenity meets desirable convenience. From cozy interiors and relaxing leisure spaces to an idyllic setting next to private Elmwood Lake, the welcoming apartments in Hudsonville, MI, are ready to deliver a heightened living experience.

“With STELLAR Broadband, residents of Elmwood Lake Apartments will enjoy the fastest and most reliable internet service available. STELLAR Broadband’s fiber optic network provides symmetrical speeds of up to 10Gbps so residents can stream, game, and work from home without any lag or buffering,” said Richard Laing, president of STELLAR Broadband.

“Bosgraaf Homes has been building homes in West Michigan for four generations. Over the years, we’ve seen the industry change dramatically thanks to advances in technology. Construction methods have evolved, and the amenities that homeowners expect have grown more sophisticated. We’re grateful for our partnership with STELLAR Broadband, a company that has been at the forefront of the industry for 22 years. Their experience and leadership have helped us make the transition into multi-family housing,” said Mike Bosgraaf, president of Bosgraaf Homes.

The first in the U.S. to bring 10Gbps Internet to the apartment in student housing, STELLAR today serves over 149 communities totaling over 10,000 residents with a wide range of technology solutions, from managed Wi-Fi, TV, and access control to security.                                                                                                                                                                                                                                         

“DTN is excited to partner with Bosgraaf Homes and STELLAR Broadband to provide Elmwood Lake residents with a unique and enjoyable experience. Bosgraaf is building beautiful homes that will be easy to lease, and STELLAR will provide residents and our office with the best possible internet service,” said Dayle Braden, DTN property manager.

“We’ve seen and have been on the forefront of technology evolving from a desired amenity to a necessity. We are proud to partner with Bosgraaf to provide the high-quality technology that their residents expect and deserve,” Laing stated.

About Spartan Net Co, dba STELLAR Broadband:
STELLAR Broadband is the largest residential fiber internet service provider in Michigan, servicing over 149 communities with multi-Gigabit fiber internet. STELLAR provides technology design and installation services for the full portfolio of technologies for multi-tenant developments, including network design, structured wiring, consulting, door entry and access control, engineered Wi-Fi, security, voice, television services, and various Internet of Things solutions. To learn more, visit: www.stellarbb.com

References:

https://www.prnewswire.com/news-releases/stellar-broadband-announces-gigabit-fiber-internet-that-goes-one-step-further-for-elmwood-lake-apartments-301831001.html

https://www.prnewswire.com/news-releases/stellar-broadband-brings-secure-gigabit-fiber-internet-to-the-bridge-on-the-medical-mile-301800978.html

No Surprise: AT&T tops leaderboard of commercial fiber lit buildings for 7th year!

Once again, AT&T ranked #1 in the U.S. Fiber Lit Buildings Leaderboard fromVertical Systems Group (VSG) for a seventh consecutive year.  The fiber focused U.S. carrier retained the top spot with the highest number of fiber lit buildings across its footprint in 2022.  But there’s a whole lot more AT&T #1 rankings that the carrier has not gotten proper credit for achieving:

–>Please see the images below, courtesy of VSG.

Major mobile operators like AT&T and Verizon are actively installing new fiber for their 5G network backhaul, which facilitates new fiber connectivity to nearby commercial sites.  T-Mobile no longer has any fiber assets from their Sprint acquisition.  They were sold to Cogent along with all other wireline assets in a deal that closed May 1, 2023.

Verizon, Spectrum Enterprise, Lumen, Comcast Business, Cox Business, Zayo, Crown Castle, Frontier, Brightspeed, Breezeline and Optimum followed. Those retail and wholesale fiber providers qualified for the leaderboard with 15,000 or more on-net U.S. fiber lit commercial buildings as of year-end 2022.

  • “Fiber installations at U.S. commercial sites increased in 2022, driven by escalating requirements for gigabit-speed connectivity to support cloud-based services, data centers, 5G rollouts, and other applications,” said Rosemary Cochran, principal of Vertical Systems Group. “New fiber investments in the U.S. will continue to be impacted by pending federal programs and funding initiatives. Opportunities in the commercial segment include monetizing the millions of small buildings underserved.”

U.S. Fiber Lit Buildings LEADERBOARD Highlights:

  • The 2022 LEADERBOARD roster increases to twelve commercial fiber providers, up from eleven in 2021.
  • AT&T retains the #1 rank on the 2022 U.S. Fiber Lit Buildings LEADERBOARD for the seventh consecutive year.
  • Rankings for the top six companies on the 2022 LEADERBOARD are unchanged from 2021, which includes AT&T, Verizon, Spectrum Enterprise, Lumen, Comcast Business, and Cox Business.
  • The next six LEADERBOARD provider rankings change as compared to the previous year. Zayo advances to rank seventh ahead of Crown Castle, which dips to eighth. Frontier moves up to ninth position from tenth. Brightspeed debuts in tenth position with fiber assets acquired from Lumen. Breezeline (formerly Atlantic Broadband) falls to eleventh position from ninth. Optimum (Altice USA brand) drops from eleventh to the twelfth and final position.
  • The number of 2022 Challenge Tier citations expands from eight to nine with the addition of Ritter Communications.

Market Players include all other fiber providers with fewer than 5,000 U.S. commercial fiber lit buildings. The 2022 Market Players tier covers more than two hundred metro, regional and other fiber providers, including the following companies (in alphabetical order): 11:11 Systems, ACD, Alaska Communications, American Telesis, Armstrong Business Solutions, Astound Business, C Spire, Centracom, Cogent, Conterra, DFN, DQE Communications, Everstream, ExteNet Systems, Fatbeam, FiberLight, First Digital, Flo Networks, Fusion Connect, Google Fiber, GTT, Horizon, Hunter Communications, Logix Fiber Networks, LS Networks, Mediacom Business, MetroNet Business, Midco, Pilot Fiber, PS Lightwave, Shentel Business, Silver Star Telecom, Sonic Business, Sparklight Business, Syringa, T-Mobile, TDS Telecom, TPx, U.S. Signal, Vast Networks, WOW!Business, Ziply Fiber and others.

For this analysis, a fiber lit building is defined as a commercial site or data center that has on-net optical fiber connectivity to a network provider’s infrastructure, plus active service termination equipment onsite. Excluded from this analysis are standalone cell towers, small cells not located in fiber lit buildings, near net buildings, buildings classified as coiled at curb or coiled in building, HFC-connected buildings, carrier central offices, residential buildings, and private or dark fiber installations.

……………………………………………………………………………………………………………………………………..

References:

2022 U.S. Fiber Lit Buildings LEADERBOARD

AT&T expands its fiber-optic network amid slowdown in mobile subscriber growth

 

https://www.verticalsystems.com/2023/02/15/2022-u-s-ethernet-leaderboard/

AT&T tops VSG’s U.S. Carrier Managed SD-WAN Leaderboard for 4th year

VSG LEADERBOARD : AT&T #1 in Fiber Lit Buildings- Year end 2020

2022 U.S. Carrier Managed SD-WAN LEADERBOARD

 

AT&T expands its fiber-optic network amid slowdown in mobile subscriber growth

AT&T is expanding its network of fiber-optic cables to deliver fast internet speeds for customers, including those in places where it doesn’t already provide broadband.  The plan will cost billions of dollars over the next several years, a price tag that the company—whose debt load outstrips its annual revenue—will not carry alone. AT&T formed a joint venture with BlackRock to fund the project and also wants to access government funding to accelerate the build-out.  AT&T and BlackRock have collectively invested $1.5 billion in the venture—named Gigapower—to date, the company said.

Gigapower plans to provide a state-of-the-art fiber network to internet service providers and other businesses in parts of select metro areas throughout the country using a commercial wholesale open access platform. Both companies believe now is the time to create the United States’ largest commercial wholesale open access fiber network to bring high-speed connectivity to more Americans.

AT&T will serve as the anchor tenant of the Gigapower network, but other companies could also provide internet service over the network. That so-called open-access model has become common throughout Europe, but has yet to be widely embraced in the U.S.  Gigapower recently introduced plans to build out fiber in Las Vegas, northeastern Pennsylvania and parts of Arizona, Alabama and Florida.

Doubling down on fiber optics sets AT&T on a different path than its rivals Verizon and T-Mobile US, which are relying on improved technology that beams broadband internet service from the same cellular towers that link their millions of mobile smartphone customers. AT&T is testing a similar fixed wireless access service but on a smaller scale, but executives say fiber remains the long-term focus.

AT&T updated shareholders on its vision for fiber internet and 5G cellular networks at its annual meeting, but the documentation/replay was not available at press time. AT&T spent about $24 billion on its fiber and 5G networks last year, and it forecast a similar level of spending this year.  The company is confident it will get a very good return on investment (ROI).

The Dallas-based company and its peers face heightened competition in the cellphone business—their core profit engine. After the Covid-19 pandemic brought a surge in new accounts, the cellphone business has cooled, pushing companies to seek alternate paths for growth. AT&T, which has nearly 14 million consumer broadband customers, has provided internet service for years, and executives say that keeping customers plugged in requires faster connections as more data is used.

“We should be putting more fiber out faster, quicker and in more places than anybody else,” AT&T Chief Executive John Stankey said in a recent interview. “If we do that, that means our network is always going to be ahead of anybody else’s.”

Fiber-optic cables, wired directly to or near Americans’ homes, contain easy-to-upgrade glass strands that can carry much more data than radio waves. That higher capacity is crucial for video calls, streaming, videogames and other services, which use more internet data than most smartphone apps. As of last year, fiber was available at some 63 million homes, or more than half of primary residences, according to the Fiber Broadband Association.

AT&T wants its fiber network to cover more than 30 million homes and businesses within its current service area by the end of 2025. In many cases, fiber will replace internet connections over copper wirelines.

Laying the fiber is one thing, but progress in getting customer sign-ups has been slower than some analysts expected. In the first three months of the year, AT&T signed up 272,000 home fiber subscribers, a deceleration from the December quarter and the same period last year.

The results also marked the fourth straight quarter during which residential fiber sign-ups failed to offset declines in broadband customers overall. Stankey said he isn’t expecting the trend to reverse this year.

AT&T offers its fiber service at various speed tiers, starting at $55 a month for downloads up to 300 megabits a second. Prices run as high as $180 a month for 5-gigabit speeds.

In the March quarter, the average AT&T fiber internet customer paid about $66 a month. That total was up 9% from last year but still slightly less than the sums paid by customers of cable rivals Charter Communications and Comcast, according to Roger Entner, the founder of Recon Analytics.

While AT&T’s fiber build-out continues, it hopes its Internet Air service—which uses cell towers to beam broadband to homes—can stem customer defections in the short term. The service, which costs $55 a month, isn’t yet widely available, said Stankey, who took over as CEO in 2020 and unwound AT&T’s bet on entertainment.

The company’s experiment with home internet via fixed wireless access (FWA) on technology that AT&T Chief Financial Officer Pascal Desroches played down earlier this year. “Long term, it’s not a solution we want to put a lot of resources behind,” Desroches said of FWA, at an analyst event in February.

CEO Stankey has more recently struck a different tone, acknowledging that some Americans might opt for the service even if offered fiber.

Verizon and T-Mobile both charge $50 a month for their fixed wireless offerings, but the prices are lower when bundled with mobile plans. Data speeds can vary, but T-Mobile says it delivers average speeds of about 145 megabits a second.

“There are some that are going to say, ‘It’s a lot less expensive right now and for where I am in my lifestyle, maybe that’s good enough,’ ” Stankey said.

Rivals are watching AT&T’s fiber progress. T-Mobile is “open-minded” about fiber, but it would likely look for partners to keep its own investment limited, finance chief Peter Osvaldik said in an interview last month. T-Mobile recently expanded a pilot program that provides fiber internet service using a local provider’s network in New York City and two cities in Colorado.

Helping bolster AT&T’s fiber ambitions is a $42.5 billion federal construction program. However, the government investments are rolling out slowly amid issues including labor shortages and permitting delays, said Garrett Baker, telecom and media investment banker at Lazard.

Some fiber companies have warned that build-out costs, from labor to supplies, are on the rise, leaving investors concerned that returns could be more muted than earlier forecasts. “We’re going to have no trouble getting the return on the investment,” said Gigapower CEO Bill Hogg.

Light Reading Podcast: ISPs, including cable ops, want to plug into Gigapower:

Bill Hogg, the CEO of Gigapower, joins the Light Reading Podcast to expand on the company’s open access model. He discusses plans to build to 1.5 million locations by 2025, exploration beyond that initial target and how Gigapower is sizing up opportunities to participate in the $42.45 Broadband Equity, Access, and Deployment (BEAD) program.

With respect to Gigapower’s open access angle, AT&T is already on board as the anchor tenant. But Hogg, the former president of AT&T Technology Operations, says there is high interest from several other ISPs to provide services on Gigapower’s wholesale network.

That list includes cable operators and “non-facility-based ISPs,” according to Hogg.

“We certainly anticipate that there will be a portfolio of ISPs that we’ll have in a particular market,” he says. “What we want to try to do is find a good complementary group of ISPs that go after segments that they otherwise might not be going after, and maybe have a bundle or a proposition that would be unique for that particular ISP and be successful in the marketplace.”

For a lightly edited transcript, click the closed caption button in the video toolbar. If you’d like to skip around and listen, here are some topics we cover:

  • Hogg discusses the top priorities at Gigapower after the deal to form the JV was finalized (1:00)
  • Gigapower has outlined its first set of markets but already has more candidates in the hopper (3:01)
  • Hogg expands on the criteria Gigapower is using to decide where to build (5:15)
  • Why a JV paired with an open access model makes strategic sense in today’s market (7:14)
  • Why Gigapower is confident that it can complete its initial buildout by 2025 (8:50)
  • How Gigapower is set up as a standalone company, number of employees and how the company will use contractors (10:11)
  • Gigapower expects to support a “portfolio of ISPs” in each market (13:25)
  • What Hogg considers to be the biggest challenge for Gigapower in the near term (15:45)
  • Why the open access model is critical to Gigapower’s financial success (19:30)
  • How Gigapower is sizing up opportunities to build in rural areas via the BEAD program (22:12)

https://www.lightreading.com/broadband/fttx/isps-including-cable-ops-want-to-plug-into-gigapower-/v/d-id/784957?

Deutsche Telekom’s fiber optic expansion in 140 of the 179 municipalities within the Gigabit region of Stuttgart

Deutsche Telekom said it has deployed its fiber optic network in more than 140 of the 179 municipalities covered by its agreement with thegigabit region” of Stuttgart. The German network operator has developed its network in the districts of Boeblingen, Esslingen, Goeppingen, Ludwigsburg and Rems-Murr districts.With ongoing expansion efforts at over 58 construction sites, the company is making significant progress, particularly in nine districts in Stuttgart, according to the statement from the company.

Since 2019, Telekom has accounted for more than 90 percent of the growth in fiber optic infrastructure. As the sole company expanding into both rural and urban areas, Telekom has established itself as a reliable partner, delivering on all construction projects and cooperation agreements, according to the broadband officer of the region and managing director of Gigabit Region Stuttgart (GRS).

In Ludwigsburg and Esslingen alone, Telekom has already been awarded contracts for 76 funding projects. The recent collaboration with Stadtwerke Nuertingen serves as a prime example of Telekom’s cooperative efforts.

Currently, approximately 30,000 households in expansion areas under this partnership can already subscribe to Telekom’s fibre optic connections.  The long-term goal is to enable 185,000 households within cooperative areas with municipal utilities to choose their preferred communication provider for fibre optic connections by 2030.

The combined efforts of self-expansion, collaborations, and subsidized projects have granted around 335,000 households throughout the region access to the fibre optic network, Telekom said.

The core focus of the gigabit project is to expand the ultra-fast fiber optic network through strategic partnerships. Currently, 177 municipalities, including Stuttgart and the neighbouring districts of Boeblingen, Esslingen, Goeppingen, Ludwigsburg, and Rems-Murr, are participating in the expansion program.

The project aims to provide 50 percent of households, all companies, and schools with fiber optic connectivity by 2025. By 2030, the target is to achieve 90 percent household coverage.  With a population of approximately 2.8 million in the conurbation, other companies in the Stuttgart region are also actively involved in fiber optic expansion initiatives said Telekom.

Telekom includes provisions for rapidly expanding the performance of its 5G network. Presently, almost 95 percent of households can already access 5G in Telekom’s mobile network, while over 99 percent of the population can utilize 4G/LTE connectivity.

Significance of DT Tower Sales:

Deutsche Telekom said proceeds from the sale of its tower business helped reduce net debt excluding leases by over 10 billion euros compared with the end of 2022, to 93 billion euros. The transaction was also the main factor behind the near quadrupling of net profit, to 15.4 billion euros, compared with the same period last year, the company said.

Deutsche Telekom had agreed in July 2022 to sell 51% of its tower business in Germany and Austria to a consortium of Canada’s Brookfield and U.S. private equity firm DigitalBridge after they made a surprise last-minute bid that valued the unit at 17.5 billion euros ($17.5 billion).

References:

Deutsche Telekom Accelerates Fiber Expansion in Stuttgart

https://www.reuters.com/business/media-telecom/deutsche-telekom-slightly-raises-2023-profit-outlook-2023-05-11/

https://www.telekom.com/en/media/media-information/archive/gigabit-project-in-the-stuttgart-region-573240

 

 

 

Frontier Communications fiber build-out boom continues: record number of fiber subscribers added in the 1st quarter of 2023

Frontier Communications added record number of fiber broadband customers in the 1st quarter of 2023.  The fiber facility based network operator added 87,000 fiber subscribers (including 83,000 residential subs) in the first quarter of 2023, up from +54,000 in the year-ago quarter. Those results beat the 76,000 residential fiber subs Frontier was expected to add in the period.  Frontier ended the quarter with 1.76 million fiber customers: 1.65 million residential subscribers and 110,000 business customers.

“We delivered another strong quarter and reached a critical milestone in our transformation. Thanks to our team’s consistent operational performance, we achieved EBITDA growth for the first time in five years,” said Nick Jeffery, President and Chief Executive Officer of Frontier.

“We are creating an internet company that people love. Over the last two years, we have rallied around our purpose of Building Gigabit America, invested in fiber, enhanced our product, put the customer at the center of everything we do and made it easier to do business with us. We are quickly becoming an agile, digital infrastructure company, and I’m confident we will return to growth this year.”

Frontier said it built fiber to an additional 339,000 locations in Q1 2023, up 60% from the 211,000 it built in the year-ago period. Frontier’s Q1 buildout was better than the 300,000 locations expected by the analysts at New Street Research. Frontier ended the quarter with 5.5 million fiber passings and 15.4 million total passings.

First-Quarter 2023 Consolidated Financial Results:

• Revenue of $1.44 billion decreased 0.5% from the first quarter of 2022 as growth in consumer, business and wholesale fiber was more than offset by declines in legacy copper

• Operating income was $143 million and net income was $3 million

• Adjusted EBITDA of $519 million increased 2.0% over the first quarter of 2022 as revenue declines were more than offset by lower content, selling, general and administrative expenses, and cost-saving initiatives

• Adjusted EBITDA margin of 36.0% increased from 35.2% in the first quarter of 2022

• Capital expenditures of $1.15 billion increased from $0.45 billion in the first quarter of 2022 as fiber expansion initiatives accelerated First-Quarter 2023

Consumer Results:

• Consumer revenue of $761 million decreased 1.9% from the first quarter of 2022 as strong growth in fiber broadband was more than offset by declines in legacy copper broadband and voice

• Consumer fiber revenue of $448 million increased 10.1% over the first quarter of 2022 as growth in consumer broadband, voice, and other more than offset declines in video

• Consumer fiber broadband revenue of $298 million increased 17.3% over the first quarter of 2022 driven by growth in fiber broadband customers

• Consumer fiber broadband customer net additions of 84,000 resulted in consumer fiber broadband customer growth of 19.5% from the first quarter of 2022

• Consumer fiber broadband customer churn of 1.20% was roughly flat with churn of 1.19% in the first quarter of 2022

• Consumer fiber broadband ARPU of $61.44 decreased 1.1% from the first quarter of 2022 driven primarily by the autopay and gift-card incentives introduced in the third quarter of 2021 First-Quarter 2023

Business and Wholesale Results:

• Business and wholesale revenue of $657 million decreased 1.4% from the first quarter of 2022 as growth in fiber was more than offset by declines in copper

• Business and wholesale fiber revenue of $281 million increased 6.0% over the first quarter of 2022 as growth in business was partly offset by modest declines in wholesale

• Business fiber broadband customer churn of 1.45% increased from 1.24% in the first quarter of 2022

• Business fiber broadband ARPU of $104.38 decreased 1.2% from the first quarter of 2022

………………………………………………………………………………………………………………………………..

While Frontier’s fiber growth engine continues to hum along, the company is dealing with higher costs related to its fiber initiative. The company raised its 2023 capex guidance to a range of $3 billion to $3.2 billion, up from an original outlook of $2.8 billion.

Frontier blamed the increase on a couple of factors – a decision to build inventory opportunistically where it saw supply chains ease a bit in the quarter and higher build costs as it scales its build into new geographies. Frontier is also seeing higher labor costs being driven by general inflation and higher rates as some of its multi-year labor contracts come up for renewal.

The anticipated increase in capex this year concerned investors. Frontier shares were down $2.33 (-10.94%) to $19.13 each in Friday morning trading.

Overall, Frontier expects fiber build costs in 2023 to be in the range of $1,000 to $1,100. But it’s confident that total project build costs will remain at about $1,000 per location as it mixes in lower-cost locations in some new-build states and benefits from aerial builds and an increased focus on multiple dwelling units (MDUs), Frontier CFO Scott Beasley said on Friday’s earnings call.

The current capex picture isn’t expected to impact Frontier’s overall fiber buildout/upgrade plan. “We’re confident that the 10 million locations is still attractive to build out,” Beasley said. Frontier is also continuing to explore an additional 1 million to 2 million additional fiber passings beyond the original 10 million target.

Frontier says it’s too early to tell how this year’s cost headwinds might impact future opportunities coming by way of the $42.5 billion Broadband Equity, Access and Deployment (BEAD) program. New Street Research estimates that there are 1.2 million BEAD-eligible locations in Frontier’s footprint.  New Street Research expects ARPU pressure at Frontier to ease in the second quarter of the year and return to growth in the third quarter.

Frontier recently initiated several consumer pricing changes for value-added services that were previously free. Whole-home Wi-Fi, for example, now costs $10 per month, its Home Shield Elite product is now $6 per month extra and the company is now charging $50 for professional installs. Those actions are driving new fiber customer monthly ARPU to a range of $65 to $70, the company said.

Frontier is also speeding up its original cost savings target to $500 million by the end of 2024. Its prior target was $400 million by the end of 2024. Frontier is approaching that target through a range of streamlining and simplification initiatives, including improved field operations, self-service capabilities, the consolidation of call centers and an ongoing reduction in copper infrastructure.

Frontier’s guidance for the full year 2023:

• Adjusted EBITDA of $2.11 – $2.16 billion, unchanged from prior guidance
• Fiber build of 1.3 million new locations, unchanged from prior guidance
• Cash capital expenditures of $3.00 – $3.20 billion, an increase from prior guidance of $2.80 billion, reflecting higher inventory levels and fiber build costs
• Cash taxes of approximately $20 million, unchanged from prior guidance
• Net cash interest payments of approximately $655 million, an increase from prior guidance of $630 million, reflecting the $750 million of debt raised in March 2023
• Pension and OPEB expense of approximately $50 million (net of capitalization), unchanged from prior guidance
• Cash pension and OPEB contributions of approximately $125 million, unchanged from prior guidance

References:

https://s201.q4cdn.com/129601114/files/doc_financials/2023/q1/Frontier-First-Quarter-2023-Results.pdf

https://s201.q4cdn.com/129601114/files/doc_financials/2023/q1/Frontier-First-Quarter-2023-Earnings-Presentation.pdf

https://www.lightreading.com/broadband/frontier-rakes-in-record-fiber-subs-but-build-costs-are-rising-too/d/d-id/784729?

Fiber builds propels Frontier Communication’s record 4th Quarter; unveils Fiber Innovation Labs

AT&T to use Frontier’s fiber infrastructure for 4G/5G backhaul in 25 states

Frontier Communications offers first network-wide symmetrical 5 Gig fiber internet service

Frontier Communications adds record fiber broadband customers in Q4 2022

Frontier’s Big Fiber Build-Out Continued in Q3-2022 with 351,000 fiber optic premises added

Frontier Communications sets another fiber buildout record; raises FTTP buildout target for 2022

“Fiber is the future” at Frontier, which added a record 54K fiber broadband customers in 1Q-2022

Frontier’s FTTP to reach 10M locations by 2025; +192,000 FTTP passings in 4Q-2021

Frontier Communications reports added 45,000 fiber broadband subscribers in 4Q-2021 – best in 5 years!

 

 

Page 2 of 7
1 2 3 4 7