Telefonica Deutschland in deal with German fiber association (BUGLAS) to connect 5G sites

Germany has been deploying 5G networks for a number of years now. German telecoms regulator Bundesnetzagentur (BNetzA), announced at the end of last year that coverage had reached 53% coverage of the population.  However, much work needs to be done to get new 5G sites to be deployed.

Backhaul solutions must be arranged for all of these new sites, delivering the mobile data from the sites back to the network core. Currently, in most mobile markets, this is done through a mix of wireless technologies (primarily microwave spectrum, but increasingly mmWave spectrum) and fibre, both of which can handle the requirements of 5G. In less developed markets, on the other hand, older copper infrastructure is sometimes used, while some of the most remote sites will be forced to use satellite when no other options are practical.

According to the GSMA, microwave and mmWave links will account for at least 60% of global macro and small cell backhaul links from 2021 to 2027.

Nonetheless, it now seems that Telefonica Deutschland is leaning even more heavily into fibre for its backhaul needs, striking a new agreement with BUGLAS to create a pre-negotiated framework agreement. The agreement should provide a basis for all of BUGLAS’s fibre network operators to strike technology, interconnection, maintenance, and service level agreements with Telefonica in a faster and more efficient manner.

BULGAS represents fibre network operators in more than 80 German cities, all of which can now request this framework agreement from BUGLAS.

Image courtesy of  Telefonica

“For both 5G and FTTB/H rollout, co-operations are the central, efficient and resource-saving key to the modern gigabit society. In order to bring together the multitude of local, municipal and regional network operators with national providers such as O2 Telefónica, the telecommunications market needs standardized offers and framework agreements,” said Wolfgang Heer, MD of BULGAS. “We are therefore very pleased to have been able to conclude a 5G framework agreement with O2 Telefónica and also invite all other national network operators to join us in discussing further framework agreements and standardization.”

Telefonica views fibre as a more effective choice than terrestrial wireless for its 5G backhaul needs, suggesting that the technology is “significantly faster and more powerful than conventional microwave links”. There is a future-proofing angle here too, with Telefonica suggesting that wireless backhaul will “reach their limits in future” based on the steady growth of mobile and 5G application data that is expected in the coming years.

Telefonica-Deutschland already has over 100 strategic agreements signed with fiber players in Germany, currently connecting its 28,000 mobile sites with fiber.   Earlier this year, the network operator agreed to collaborate with NEC to build an OpenRAN, small cell network in Germany which has already been deployed.

References:

https://www.totaltele.com/513555/Telefonica-strikes-deal-with-German-fibre-association-to-connect-5G-sites

https://www.gsma.com/spectrum/wp-content/uploads/2021/02/wireless-backhaul-spectrum-positions.pdf

Deutsche Telekom launches 5G private campus network with Ericsson;  Sovereign Cloud for Germany with Google in Spring 2022

Telefónica Germany and NEC partner to deliver 1st Open RAN with small cells in Germany

 

 

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

Frontier Communications added a record 54,000 fiber broadband customers in the first quarter of 2022, a 20% gain over the previous record set in Q4 2021 and somewhat higher than expectations coming in to the quarter.  These fiber customer adds are coming from both new and existing fiber markets. Frontier’s data continues to track nicely: 22% penetration at the 12-month mark for its 2020 cohort and 18% for its larger 2021 cohort, and 44% at the 24-month mark for its (admittedly small and probably not broadly representative) 2020 cohort. Base market penetration was up 50 basis points in the quarter and 90 basis points over the past two quarters.

Frontier’s aggressive fiber network buildout and a record low churn of 1.19%, enabled the telco to offset copper losses and add 20,000 net broadband subs for Q1 2021.  That’s a record nearly two times higher than that set in the prior quarter. Frontier ended the quarter with 1.38 million residential fiber broadband subs, up 11% YoY.

Frontier plans to expand its fiber-to-the-premises (FTTP) footprint to 10 million locations by 2025 – a figure that includes the company’s “Wave 1” and “Wave 2” builds. Frontier built fiber out to another 211,000 locations in the first quarter of 2022, and says it’s on track to add more than 1 million FTTP locations for all of 2022, and another 1.6 million in 2023.

Frontier passed another 211K locations with fiber in the quarter, up from the ~190K level of the prior two quarters, a nice accomplishment in light of the disruptions associated with Omicron early in the quarter (100K of the 211K passings were achieved in March alone). Management continues to expect to add at least 1M fiber locations in 2022, and it seems on track to meet or exceed that target.

“Positive net adds is the new normal,” Nick Jeffery, Frontier’s president and CEO, declared on Friday’s earnings call.  The CEO continued:

“We gained momentum in business and wholesale, reaching a key inflection point in SMB and we made progress improving our employee engagement. And last week, we unveiled our new Frontier brand. A year ago, we said we will take a long and hard look at our brand and its future and after a thorough data-driven evaluation I am delighted with the results. Our new brand is modern, more relevant, more tech-oriented, and reflects our commitment to relentlessly being better in our business and for our customers.   We also gained customers in our mature fiber market, what we refer to as our base fiber footprint. In our base fiber footprint, penetration increased 50 basis points sequentially to 42.4%. And our base fiber footprint serves as a target for where we expect to drive penetration in our expansion fiber footprint and we expect to steadily grow penetration to at least 45% over time.

In our expansion fiber footprint, we are also making excellent progress. At the 12-month mark, our 2021 build cohort reached penetration of 18%, consistent with our target range of 15% to 20%. And at the 24-month mark, our 2020 build cohort reached penetration of 44%, significantly outperforming our target range of 25% to 30%. As larger builds are pulled into our 2020 cohort throughout the year, we continue to expect penetration of 25% to 30% at the 24-month mark.”

Indeed, Frontier’s operations and service levels have improved dramatically over the past two years. Our colleague Nick Del Deo at MoffettNathanson wrote in a research note to clients:

By some measures, Frontier is now operating at as high a level as key competitor Charter in the California market. And this is having an effect on its customer perceptions and market traction. Its American Consumer Satisfaction Index scores are slowly moving up, while its net promoter score has surged, especially where it has rolled out FTTH. Churn has fallen, as have customer care call volumes.

Frontier’s post-emergence management team has taken a data-driven approach to running the business and making key decisions. Put simply, the choice to refresh the company’s font and logo rather than totally rebrand is further evidence that changes to the business are working.”

To reiterate, 1Q-2022 fiber penetration rates rose to 42.45% in the company’s  base fiber footprint. Frontier expects to reach penetration rates of at least 45% over time.

In the expansion areas, Frontier realized a penetration rate of 12% at the 12-month mark in its 2021 fiber build cohort – within its target range of 15%-20%. In the 2020 FTTP build cohort, Frontier is seeing a 44% penetration rate at the 24-month mark, outperforming its target range of 25%-30%.

Source: Frontier Communications Q1 2022 earnings presentation

CEO Jeffery said Frontier’s fiber-powered services are taking share from incumbent cable operators, but didn’t elaborate on how much damage Frontier is inflicting.  He also acknowledged that fixed wireless access (FWA) could present an attractive option in rural areas where fiber isn’t present. Jeffery also believes fiber represents “a fundamentally different proposition” over FWA, given current data usage trends. In March, the average Frontier fiber subscriber consumed about 900 gigabytes of data, up 30% from pre-pandemic levels, with a portion consistently consuming more than 1 terabyte per month.

Significantly, Frontier gained new customers in areas where fiber is being built out.  “This is critical because we know our future is fiber and fiber customers are the ones that will drive our growth in the years to come,” said Jeffery, a former Vodafone UK exec who took the helm of Frontier in March 2021.

For the full 2022 year, Frontier is targeting adjusted EBIDTA of $2 billion to $2.15 billion, and capital expenditures in the range of $2.4 billion to $2.5 billion, the same as guidance issued last quarter. This implies $2,003M for the remainder of the year at the midpoint. Management continues to target FTTH builds in 2022 of at least 1,000K vs. 638K built in 2021.

References:

https://s1.q4cdn.com/144417568/files/doc_financials/2022/q1/Frontier-First-Quarter-2022-Results.pdf

https://s1.q4cdn.com/144417568/files/doc_financials/2022/q1/Frontier-First-Quarter-2022-Earnings-Presentation-(1).pdf

https://seekingalpha.com/article/4508042-frontier-communications-parent-inc-fybr-ceo-nick-jeffery-on-q1-2022-results-earnings-call

https://www.lightreading.com/opticalip-networks/net-broadband-subscriber-adds-new-normal-at-frontier-ceo-says/d/d-id/777365?

 

Altice USA transition to fiber access; MoffettNathanson analysis of low population growth on cablecos broadband growth

Altice USA recently disclosed a plan to overbuild its hybrid fiber-coaxial (HFC) network to blanket 6.5 million locations with fiber by 2025.  The NYC based cableco/MSO operates the Optimum and Suddenlink brands, which it plans to rebrand under the Altice USA name.

During a New Street Research investor conference, Altice USA EVP of corporate finance and development Nick Brown said the decision to make that move was a “no brainer” for the company, but acknowledged that it’s in a slightly different position than fellow cable giants Comcast and Charter Communications.  Brown stated Altice USA’s own experience and that of its sister companies in Europe gave it better insight into what the transition to fiber would look like in terms of costs and returns, leaving it unafraid to take the leap. But it also already faces “a lot of fiber-based competition relative to others,” especially from Verizon Fios in its legacy Cablevision footprint in the eastern part of the country.

Altice has already upgraded its head ends and backbone rings with fiber. Since DOCSIS would require it to push fiber deeper and deeper into the network anyway, Brown said it made sense to go all-in to pull forward the benefits full fiber has to offer.  “The FTTH end-to-end glass network that we’re deploying here in the U.S. for us is pretty much the end state, the logical end state, of a coax upgrade anyway,” Brown argued.

Brown said the move to fiber will allow Altice USA to save in the “low hundreds of millions” of dollars in operating expenses and “materially” reduce its capital expenditures over time. It’s also expected to help Altice more effectively compete by allowing it to offer a better product, reduce churn and improve network reliability.  He also pointed out it’ll make future network upgrades easier. Today, it has around half a million active components in its coax network, nearly all of which need to be touched for a DOCSIS upgrade. But with fiber “the equivalent is about 1,000 to 2,000 pieces of equipment that you would need to upgrade to go to next generations of fiber technology as we’re doing this year as we’re moving to XGS-PON,” he said, noting its current fiber footprint of more than 1 million locations was originally built with GPON technology.

“I think it’s just a lot more scalable, a lot more future-proof in our mind, and a lot more cost effective to move to future broadband technologies,” Brown concluded.

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To determine which operators might have been most negatively affected by low population growth (and therefore likely low household growth) from July 2020 to July 2021, and which might have been net beneficiaries of the fastest growth, analysts at MoffettNathanson aggregated the population by county in each cable operator’s footprint using FCC Form 477 data as of Q4 2020. Using those totals, we calculated a weighted average population growth for each operator’s total footprint based on the county-level annual estimates published by the Census Bureau.   The weighted-average population growth implies a meaningful headwind to Altice USA (at -0.4% growth), and a significant tailwind to Cable One (at 0.7% growth).

Craig concluded:  “Again, there’s a lot more at work in broadband subscriber growth rates than just population (new household formation) growth or starting penetration. Different operators have different demographics. They face different overlaps with fiber, and some will face more FWA than others. They have different pricing strategies.”

References:

https://www.fiercetelecom.com/telecom/altice-usa-exec-fiber-logical-end-state-coax

FTTP build out boom continues: AT&T and Google Fiber now offer Gig speeds to residential/business customers

 

Altice-USA FTTH network to reach 1M homes by 2018

FTTP build out boom continues: AT&T and Google Fiber now offer Gig speeds to residential/business customers

AT&T  has extended its symmetrical 2-Gig and 5-Gig to parts of its full fiber-to-the-premises (FTTP) footprint.  The expansion (the full list can be viewed here) follows AT&T’s initial launch of multi-gig services to more than 70 US markets.

AT&T said this expansion includes parts of its fiber footprint spanning more than 100 U.S. metro areas.

AT&T Fiber and their Hyper-Gig speeds will be introduced to 7 all-new fiber metro areas in Texas, Oklahoma and Ohio by year-end 2022. Customers in these areas can sign up to be alerted when AT&T Fiber is available to their address through the company’s Notify Me service by visiting att.com/notifyme.

AT&T said it will continue to expand multi-gig capabilities inside its FTTP footprint in 2022, and reiterated plans to expand fiber to more than 30 million customer locations by the end of 2025. Markets on tap for fiber builds include Abilene, Tyler, Victoria, Wichita Falls, and Longview, Texas; Lawton, Oklahoma; and Youngstown, Ohio.

Pricing on AT&T’s new multi-gig remain at the levels announced last month:

  • Residential 2-Gig for $110 per month, or business 2-Gig for $225 per month
  • Residential 5-Gig for $180 per month, or business 5-Gig for $395 per month

“We’re thrilled to bring our fastest speeds and our best internet experience to more homes and businesses across the country,” said Rick Welday, Executive Vice President & GM of Broadband, AT&T. “The energy and momentum we have in the marketplace is unmistakable and we are proud to be bringing connectivity to more people every single day.”

“The importance of high-speed broadband internet service has never been clearer,” said Bob O’Donnell, President of TECHnalysis Research. “Whether it’s ongoing hybrid work efforts with bandwidth-hungry video meetings, increasing reliance on high-resolution streaming video content, growing interest in online gaming and more, US consumers recognize the need and value of high-quality internet. Multi-gig fiber ups the ante and answers those demands with faster, reliable, symmetrical download and upload speeds.”

AT&T Fiber is internet that upgrades everything! There’s a big difference in the architectural nature of fiber compared to cable. Cable was designed to provide TV content to households, while fiber was designed specifically to provide high-speed internet. Fiber allows high-capacity tasks, such as uploading large documents during video calls and gaming, to flow seamlessly, even during high-usage times.

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AT&T’s gig FTTP  offering comes as  Frontier Communications, Verizon Communications and Ziply Fiber, get more aggressive with their own multi-gig offerings.  Cablecos like CableOne,Suddenlink Communications (asubsidiary of Altice USA), and Comcast/Xfinity are also offering gig download speeds to residential subscribers.

FTTX (Node, Curb, Building, Home) architectures vary with regard to the distance between the optical fiber and the end user. The building on the left is the central office; the building on the right is one of the buildings served by the central office. Dotted rectangles represent separate living or office spaces within the same building.

Source: Wikipedia

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Meanwhile, long dormant (and presumed dead) Google Fiber has moved ahead with the debut of a top-tier broadband service for business users that delivers 2 Gbit/s downstream and 1 Gbit/s upstream.  Google Fiber’s Webpass fixed wireless services currently deliver up to 1 Gbit/s.  Business 2 Gig is available to any business address in any Google Fiber service area. You can Sign up today to see where truly fast, affordable internet can take your business!

Google Fiber’s new business tier costs $250 per month.  It’s being bundled with a static IP address (for components such as web and email servers), a Wi-Fi 6 router and a tri-band mesh extender. The new 2-Gig business tier sells for the same price previously affixed to Google Fiber’s 1-Gig service for business, which has been reduced to $100 per month.

Google Fiber introduced its $100 per month, 2-Gig residential service in the fall of 2020, and initially tested it in Nashville, Tennessee, and Huntsville, Alabama. The company has since launched 2-Gig in other FTTP markets, including Atlanta; Austin; Charlotte, North Carolina; San Antonio; Kansas City (Missouri and Kansas); Orange County; Provo and Salt Lake City, Utah; The Triangle, North Carolina. Google Fiber is in the process of launching services in West Des Moines, Iowa, where it tangles with Mediacom Communications.

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References:

https://about.att.com/story/2022/expands-hyper-gig-fiber-offering.html

https://about.att.com/ecms/dam/pages/internet-fiber/ATT-Fiber-market-cities.pdf

For more information or to check availability for all speed tiers of AT&T Fiber, visit att.com/hypergig

https://fiber.google.com/blog/2022/your-business-now-even-faster/

Ziply Fiber deploys 2 Gig & 5 Gig fiber internet tiers in 60 cities – AT&T can now top that!

Analysts: Increased Fiber internet services may force cablecos to alter pricing & deploy FTTP

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

 

How to find the Best Gigabit Internet Providers in the USA

 

MoffettNathanson: Robust broadband and FWA growth, but are we witnessing a fiber bubble?

According to a new comprehensive, market research report from MoffettNathanson (written by our colleague Craig Moffett), Q4 2021 broadband growth, at +3.3%, “remains relatively robust,” and above pre-pandemic levels of about +2.8%.

Meanwhile, the U.S. fixed wireless access (FWA market) captured ~ 38% share of broadband industry net adds in the fourth quarter of 2021.  Approximately half of Verizon’s FWA customers are coming from commercial accounts, T-Mobile has indicated that about half its FWA customers are coming from former cable Internet subscribers.  FWA’s strong Q4 showing left cable’s flow share at just 66%, about the same as cable’s share of installed US broadband households. “In other words, Cable likely neither gained nor lost share during the quarter, and instead merely treaded water,” Moffett noted.  FWA “has gone from low-level background noise to suddenly a major force, with Verizon and T-Mobile alone capturing more than 300K FWA subscribers in the fourth quarter,” Craig noted.  However, he isn’t sure that wireless network operators will allocate enough total bandwidth capacity for FWA to fully scale.

In 2020, a year that witnessed a surge in broadband subs as millions worked and schooled from home, the growth rate spiked to 5%. Here’s a snapshot of the broadband subscriber metrics per sector for Q4 2021:

Table 1:

Sector Q4 2021 Gain/Loss Q4 2020 Gain/Loss Year-on-Year Growth % Total
Cable +464,000 +899,000 +3.8% 79.43 million
Telco -26,000 +21,000 -0.4% 33.51 million
FWA* +302,000 +81,000 +463.9% 869,000
Satellite -35,000 -35,000 -6.6% 1.66 million
Total Wireline +437,000 +920,000 +2.8% 112.95 million
Total Broadband +704,000 +966,000 +3.3% 115.48 million
* Verizon and T-Mobile only
(Source: MoffettNathanson)

U.S. broadband ended 2021 with a penetration of 84%  among all occupied households. According to US Census Bureau data, new household formation, a vital growth driver for broadband, added just 104,000 to the occupied housing stock in Q4 2021, versus +427,000 in the year-ago period. Moffett said the “inescapable conclusion” is that growth rates will continue to slow, and that over time virtually all growth will have to stem from new household formation.

Factoring in competition and other elements impacting the broadband market, MoffettNathanson also adjusted its subscriber forecasts for several cable operators and telcos out to 2026. Here’s how those adjustments, which do not include any potential incremental growth from participation in government subsidy programs, look like for 2022:

  • Comcast: Adding 948,000 subs, versus prior forecast of +1.25 million
  • Charter: Adding 958,000 subs, versus prior forecast of +1.22 million
  • Cable One: Adding 39,000, versus prior forecast of +48,000
  • Verizon: Adding 241,000, versus prior forecast of +302,000
  • AT&T: Adding 136,000, versus prior forecast of +60,000

Are we witnessing a fiber bubble?

“The market’s embrace of long-dated fiber projects rests on four critical assumptions. First, that the cost-per-home to deploy fiber will remain low. Second, that fiber’s eventual penetration rates will be high. Third, that these penetration gains can be achieved even at relatively high ARPUs. And fourth, that the capital to fund these projects remains cheap and plentiful.

None of these assumptions are clear cut. For example, there is an obvious risk that all the jostling for fiber deployment labor and equipment will push labor and construction costs higher. More pointedly, we think there is a sorely underappreciated risk that the pool of attractive deployment geographies – sufficiently dense communities, preferably with aerial infrastructure – will be exhausted long before promised buildouts have been completed.

Revenue assumptions, too, demand scrutiny. Cable operators are increasingly relying on bundled discounts of broadband-plus-wireless to protect their market share. What if the strategy works, even a little bit? And curiously, the market’s infatuation with fiber overbuilds comes at a time when cable investors are growing increasingly cautious about the impact of fixed wireless. Won’t fixed wireless dent the prospects of new overbuilds just as much (or more) as those of the incumbents.”

Moffet estimates that about 30% of the U.S. population has been overbuilt by fiber over the past 20 years, and that the number is poised to rise as high as 60% over the next five years. But the big question is whether there’s enough labor and equipment to support this magnitude of expansion.  “Our skepticism about the prospects for all of the fiber plans currently on the drawing board is not born of doubt that there is enough labor to build it all so much as it is that the cost of building will be driven higher by excess demand,” Moffett explained. “There are already widespread reports of labor shortages and attendant higher labor costs,” he added.

“The outlook for broadband growth for all the companies in our coverage, particularly the cable operators, is more uncertain than at any time in memory. IMarket share trends are also more uncertain that they have been in the past. Cable continues to take share from the telcos, but fixed wireless, as a new entrant, is now taking share from all players. Share shifts between the TelCos and cable operators are suppressed by low move rates, likely due in part to supply chain disruptions in the housing market. This is likely dampening cable growth rates. In at least some markets, returns will likely be well below the cost of capital,” Moffett forecasts.

References:

U.S. Broadband: Are We Witnessing a Fiber Bubble?  MoffetNathanson research note (clients and accredited journalists)

https://www.lightreading.com/cable-tech/fwa-nabbed-38-of-broadband-share-in-q4-as-possible-fiber-bubble-forms/d/d-id/775819?

Lumen Technologies tops Vertical Systems Group’s 2021 U.S. Wavelength Services Leaderboard

Lumen Technologies finished first in Vertical Systems Group’s (VSG)  2021 U.S. Wavelength Services Leaderboard [1.].  Lumen, previously known as CenturyLink, has the benefit of a fiber footprint that expanded greatly with its Level 3 acquisition.  Lumen’s 2016 acquisition of Level 3 for $34 billion combined assets covering 200,000 miles of fiber, which included 64,000 route miles in 350 metropolitan areas and 33,000 subsea miles.  The service provider’s on-net buildings increased by about 75% to 75,000, including 10,000 buildings in EMEA and Latin America.
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Note 1. A Wavelength Service is a large bandwidth connection providing high-speed Internet or data service delivered over lit fiber-optic lines using Dense Wave Division Multiplexing (DWDM) to create wavelengths or optical channels.
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The top eight wavelength services providers were: Lumen, Zayo, Verizon, AT&T, Arelion (formerly Telia Carrier), Windstream, Crown Castle and Cox Communications. This new benchmark measures U.S. market presence for wavelength providers selling retail and wholesale services.  Most of the companies on the leaderboard are US-based service providers with a significant number of fiber-lit buildings in the US, with the exception of Arelion, which is headquartered in Stockholm, Sweden.
LEADERBOARD companies each have a one percent (1%) or higher share of U.S. wavelength circuits. A wavelength circuit provides a PHY layer dedicated bidirectional gigabit-speed optical fiber connection between two sites using DWDM.
“U.S. demand for wavelength services is rising to support mission-critical applications that require assured performance, deterministic latency and gigabit speed connectivity,” said Rick Malone, principal of Vertical Systems Group. “Our forecasts show double digit growth this year, driven by high demand for 100 Gbps wavelength circuits.”U.S. Wavelength LEADERBOARD Research Highlights:

  • Customer demand for retail wavelength circuits exceeded wholesale deployments in 2021.
  • Revenue for U.S. Wavelength Services is projected to grow at a 13% CAGR between 2021 and 2026. This projection incorporates the effects of the COVID pandemic, including installation disruptions and chip shortages.
  • Six providers on the U.S. Wavelength Services LEADERBOARD also hold a rank position on the latest U.S. Fiber Lit Buildings LEADERBOARD – Lumen, Zayo, Verizon, AT&T, Crown Castle and Cox. Additionally, Windstream achieved a Challenge Tier citation.
  • Five U.S. Wavelength Services LEADERBOARD providers are also top ranked on the Mid-2021 U.S. Ethernet LEADERBOARD– Lumen, Verizon, AT&T, Windstream and Cox. Zayo has a Challenge Tier citation.

For year-end 2021, Market Players include the following wavelength providers (in alphabetical order): Altice USA, Armstrong Business Solutions, Astound Business Solutions, Colt, Consolidated Communications, C Spire, Comcast, DQE Communications, Epsilon, Everstream, Exa Infrastructure (formerly GTT), ExteNet Systems, Fatbeam, FiberLight, FirstLight, Frontier, Great Plains Communications, Logix Fiber Networks, LS Networks, Midco, Ritter Communications, Segra, Shentel Business, Silver Star Telecom, Sparklight Business, Spectrum Enterprise, Syringa, T-Mobile, TDS Telecom, Unite Private Networks, Uniti, US Signal, Veracity, WOW!Business, Ziply Fiber and others.

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This is VSG’s first Wavelength Services Leaderboard.  The market research group has previously published leaderboards for markets such as Ethernet and SD-WAN. VSG describes a wavelength circuits as providing a “Layer 1 dedicated bidirectional gigabit-speed optical fiber connection between two sites.”

While wavelength technology is about 20 years old, it’s experiencing a “rebirth because of the demand for very high speeds,” Malone said, adding that VSG clients have asked for an assessment of the market.

“The past five years or so, we’ve seen many more enterprises, cloud providers and hyperscalers buying up circuits. Now we’re in a phase where enterprises use it for data center interconnect, cloud connections and specific applications that require high bandwidth,” said Malone.

He thinks that AT&T (#1 in fiber-lit buildings) and Verizon (#2 in fiber-lit buildings) have focusing more on the mobile market, rather than wavelength services.   “If you looked at maybe Verizon and AT&T, their strategic focus over the years is more focused internationally, integrating their mobile operations with their other business units, and not as much focus on just high-speed connectivity between two pairs of sites for some of these networks,” Malone said.

Here is VSG’s latest fiber-lit buildings leaderboard, published in April 2021:

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References:

2021 U.S. Wavelength Services LEADERBOARD

https://www.lightreading.com/opticalip/verizon-atandt-lag-behind-lumen-on-wavelength-services-leaderboard/d/d-id/775651?

VSG LEADERBOARD : AT&T #1 in Fiber Lit Buildings

 

Deutsche Telekom expands its fiber optic network in 78 cities and communities

Deutsche Telekom said it has expanded its fiber optic network for almost 7,000 companies in 78 cities and communities. Telekom is providing the companies with up to 1 Gbps speeds. The German based telco has connected industrial parks in the municipalities of Ahrensburg, Deggendorf, Lastrup, Lauf, Mainz and Mannheim among others.

Telekom is laying 560 km of fiber-optic networks to carry out the project and to connect the companies. It is using a trenching process to expand its fiber network.

“Telekom is Germany’s digital engine. That is why we are building our network seven days a week, 24 hours a day. In the city as well as in the countryside. We are massively accelerating our roll-out. In the coming year, we will go one better and invest around six billion euros in Germany. By 2030, every household and every company in Germany should have a fiber-optic connection. We will build a large part of this. But our competitors are also in demand,” said Srini Gopalan, Member of the Board of Management of Telekom Deutschland.

He also commented on the new German government’s plans in terms of digitization: “The new coalition is focusing on FTTH as THE technology of digitization. We explicitly welcome this. Faster processes – including for applications and approvals – will also help us to speed up fiber roll-out. We support the digital set off in our country. Digital networks should bring people together. Their roll-out should no longer be stuck in paper files.”

References:

https://www.telecompaper.com/news/deutsche-telekom-expands-network-for-7000-companies–1413189

https://www.telekom.com/en/media/media-information/archive/turbo-for-fiber-and-5g-643014

Lumen’s big fiber roll-out push from 2.5M to 12M locations passed in the next few years

At the 2022  CitiApps Economy Virtual Conference yesterday, Lumen Technologies, Inc (formerly CenturyLink) President and CEO Jeff Storey said his company plans to increase its fiber deployments from 2.5 million locations to 12 million, which represents a five-times increase over the company’s traditional deployment rate.  Storey said Lumen had been investing about 400,000 new fiber locations passed every year. “We have been very strategic and targeted and micro targeted in our approach to. We wanted to build — all digital experience of the quantum fiber platform, we’ve done that our NPS scores are really, really exceptional for quantum fiber. And so we’ve proven that we can build successfully, we proven that we can deliver successfully, and built all of the systems around the customer unnecessary to do that. So we’ll continue to invest there.”

Storey did not state how many years it would take company to reach 12M locations passed.

Separately, Lumen is expecting to close a sale of its local exchange business (formerly US West) to Apollo Funds in the second half of the year, which means it will retain mostly markets in metro areas.  “We’ve rewritten the consumer playbook,” said Storey, noting that the company is now positioned as an “all-digital fiber brand.”

Like other broadband providers that have relied, in large part, on traditional copper network infrastructure, Lumen has been losing broadband customers in recent years. The company hopes that its investment in fiber will reverse that trend and has set a goal of returning to revenue growth within two to three years.

“Fiber wins. If you are competing with any other technology, fiber wins.  And we’ll continue to deliver the majority of our services over fiber infrastructure and integrate those capabilities into an all digital experience. And when you do that, I think Lumen wins.” Storey said.

Lumen’s office building at 1025 Eldorado Blvd, Broomfield, CO 80021

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Not surprisingly, considering Lumen’s emphasis on the business market for telecom services, Storey went on to note several advantages that are likely to be most appealing to business customers. In particular:

Fiber and data communications are more important than ever. But we don’t just look at it as data growth opportunity. For example, enterprises are shifting. I already said this, but more and more to hybrid environments. With hybrid employees, hybrid computing, hybrid network connect those employees, the computing, the applications that they use in the most sensible manner.

We look at combining our fiber infrastructure with capabilities like SASE, edge computing, and dynamic connections. Dynamic connections is really our network as a service capability. We create hybrid computing and networking environments that empower the enterprises to acquire, analyze and act on their data.

And looking over the Lumen platform, we enable new technologies and expanding our addressable market and we believe we’re in a great position to deliver. At the beginning of last year, we announced we’d have edge computing resources within five milliseconds, from 95% of U.S. enterprises. By the end of the year, we actually completed that somewhere in the middle of June, July, and today we’re around 97%. So we believe we have a great infrastructure tightly coupled with our fiber capabilities and we think there’s a great opportunity. Lumen and industry analysts agree, that is a major opportunity with 10s of billions of dollars in revenue potential. But it’s more than focusing on one product. It’s our ability to combine our services into holistic solutions for our enterprise customers.

Because we are a fiber-based platform… bringing our services to our customers with the connectivity of the fiber but also to cloud service providers, major data center providers,…private data centers of our customers [and] to eyeball networks,” he said, “we are in an excellent position to… help [customers] acquire their data, analyze their data [from] all of these different cloud options… and then act on their data.

In his opening remarks, Storey summed up Lumen’s strategic plan for 2022:

Our top priority is revenue growth, and we’re very focused on that, 2022 will be somewhat an investment year for Lumen, something CapEx and OpEx. CapEx is generally success-based initiatives that we have. But OpEx is a little more proactive investing in things like product development, marketing, brand, and other go-to-market initiatives that we have. We will continue to focus on investing and augmenting the Lumen platform, we believe it’s a great way to enable new technologies and expand our capabilities and our addressable market. We’ve already announced our accelerated quantum fiber bill, and plan to add more than 12 million locations over the coming years in the remaining 16 states that we operate in the states.

Lastly, we continue to invest in transforming our business for better customer experience, and operational efficiencies. We’ve done a great job of improving our customer experience, at the same time taking costs out of the business by using the technologies that we sell to our customers and then using other technologies in our business direct.

This strong increase in fiber deployment echoes what was said earlier this week at the 2022  CitiApps Economy Virtual Conference from Scott Beasley of Frontier Communications and AT&T’s CEO John Stankey.  Also, from MSO Cable One’s joint venture with three private equity firms.

References:

Lumen’s Fiber Internet Offerings:  https://www.lumen.com/en-us/networking/business-fiber.html

Transcript: https://seekingalpha.com/article/4478335-lumen-technologies-inc-lumn-ceo-jeff-storey-presents-citis-appseconomy-virtual-conference

Webcast Replay: https://kvgo.com/citi-apps-economy-conference/lumen-technologies-jan-2022

CEO: Lumen Plans Fiber Deployment Rate of 5x its Historical Rate

 

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

Frontier Communications added 45,000 fiber broadband subscribers in the fourth quarter, its best performance gains in five years, Frontier’s Scott Beasley said at the 2022 Citi Apps Economy Virtual Conference. The company hopes to expand by 1 million fiber locations this year as part of plan to reach 6 million by 2025.

Comment: That’s great progress for a company that filed for bankruptcy in April 2020 with a plan to cut more than $10 billion of its $17 billion debt load by handing ownership to bondholders. It was the biggest telecom filing since WorldCom in 2002, reflecting years of decline in its business of providing internet, TV and phone service in 29 states.

When combined with legacy DSL losses, Frontier added 9K net new broadband subscribers. Frontier is currently on an aggressive fiber build strategy that aims to add a total of 6 million locations by the end of 2025, resulting in 10 million locations reached in total. Beasley reports the company added 600K new fiber locations in 2021, with a goal of adding another million locations by the end of 2022. Beasley reports that the much discussed supply chain challenges facing the broadband industry have not had a significant impact at Frontier.

“We’ve managed through supply chain constraints and been able to perform very well in our fiber build and continue to ramp that up for 2022,” he said.

  • This marked the first time in more than five years that the Company has posted total broadband customer growth in a quarter.
  • The Company expects to continue growing the total broadband customer base as its fiber build accelerates.

Source: Frontier Communications Q3 2021 earnings presentation

Frontier has completed ‘wave 1’ of this fiber expansion.  The company is now beginning ‘wave 2,’ which will take them through 2025, getting them to 6 million new locations. Build costs in wave 2 are a bit higher at $900 to $1,000 per fiber location.

Frontier envisions a ‘wave 3’ coming, but that’s outside the scope of their current committed-to fiber build. Beasley says Frontier will look to leverage government funding programs and other partnerships to help fund wave 3 fiber builds.

“There could be scenarios where we accelerate the build of some locations in wave 3 into wave 2,’ he said in discussing Frontier broadband growth. “That will likely be a destination of significant government funding as the roughly $45 billion of infrastructure bill funding that goes to broadband will be targeted at locations like wave 3.”

Asked about potential competition from fixed wireless access (FWA) and satellite broadband services, Beasley said neither presents a material threat just yet. While FWA may gain traction in some ultra-dense urban locations and satellite in extremely rural areas, Beasley asserted neither technology will be able to stand up against Frontier’s gigabit fiber offerings. The company already offers 1 Gbps and is planning the rollout of a 2 Gbps plan in the first half of this year as well as a 10 Gbps tier somewhere down the line.  “It’s a technology we’re watching closely but don’t think it can compete with our core symmetrical speeds in fiber,” Beasley said of FWA.

“Against our core gigabit plus offers, 1 gig symmetrical speeds now, we’ve said we’re going to launch 2 gig in the first half of 2022, eventually we’ll move to 10 gig, the core network is 10 gig capable now, we’ve trialed 25 gig successfully in certain parts of the network,” he said. “I don’t think fixed wireless has the capacity to compete with that core infrastructure. It will be competitive in certain niches of the market…but I don’t think it can compete with our core symmetrical speeds and fiber,” he added.

References:

https://kvgo.com/citi-apps-economy-conference/frontier-jan-2022

https://seekingalpha.com/article/4478155-frontier-communications-stock-subscriber-growth-higher-profits

https://www.fiercetelecom.com/telecom/frontier-adds-45k-fiber-lines-posts-first-broadband-growth-5-years-q4

With 45K New Fiber Subscribers, Frontier Sees First Positive Broadband Growth in 5 Years

AT&T Communications CEO optimistic about wireless revenue and fiber buildout

Speaking at Wells Fargo (Virtual) TMT Summit, AT&T Communications CEO Jeff McElfresh discussed momentum in AT&T’s wireless business, noting that AT&T’s consistent go-to-market strategy has driven improved market position supported by healthy wireless service revenue and EBITDA growth. McElfresh noted that over the past five quarters the company has delivered its best subscriber results in a decade, with nearly 4 million postpaid phone net additions, and 1.4 million fiber net additions. At the same time, wireless delivered its best-ever EBITDA in the third quarter of 2021, up 3.6% year over year.

McElfresh said his company added over 1.4 million fiber net adds in the last five quarters. That was based on AT&T’s conviction to reinvest in what they believe is a very future-forward technology in fiber that’s got superior advantages to any other kind of broadband connectivity offering (e.g. FWA, bundled copper pairs, cable, etc).

McElfresh told the audience that the company’s fiber expansion is “rekindling” its consumer broadband business and that he has a high degree of confidence that the company is hitting “game speed” when it comes to the number of homes passed with fiber that it is achieving every month.

AT&T had approximately 14 million homes passed with fiber as of year-end 2020 and is expected to increase that to 16.5 million homes passed by the end of this year. The company now has 5.7 million fiber to the premises/home customers, including Internet access, VPN, private line, virtual private line, etc.

McElfresh said that he believes AT&T has enough “weight” in the industry that it can work with vendors to overcome any supply chain delays (which the company warned about in July).  He added that he has no concerns about achieving the 30 million locations by 2025 goal based upon the company’s current buildout pace. “I have no concerns about hitting the pace that we need to reach that,” he said.

“What I am focused on more than penetration levels is that we are demonstrating that we can step up our net add performance quarter to quarter.”  In the third quarter, AT&T added 289,000 fiber customers which was down year-on-year from 357,000. However, the company also said that 70% of its net adds were new to AT&T.

To help entice consumers to switch to AT&T’s fiber network, McElfresh said that the company has a dedicated fiber team within its consumer wireline business that is working in neighborhoods to sell fiber optic based Internet access. He added that the telco is measuring the number of fiber net adds they can achieve in 30 days, 60 days and 90 days in those local markets.  The company sees those fiber net add numbers accelerating during each of those time periods.

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Looking forward, McElfresh is encouraged by underlying mobile industry trends and sees limited signs that suggest a near-term shift in demand levels.  He said he believes AT&T’s momentum is sustainable with the company’s simplified plans, targeted subsegment approach, improved customer experience and network performance all helping AT&T retain and attract subscribers, leading to lower churn and increased customer lifetime value.  Reiterating recent comments by CFO Pascal Desroches, McElfresh indicated that AT&T’s outlook for 2022 and beyond does not assume a continuation of outsized industry net adds.  Should recent mobile industry trends continue, he believes the changes made to AT&T’s go-to-market strategy puts the company in a better position to capitalize on healthier than anticipated demand.

McElfresh noted that AT&T continues to see postpaid phone ARPU stabilizing in 2022 with an improvement in international roaming and subscribers adopting higher-ARPU plans balancing the impact of amortization accounting for device promotions. McElfresh said that fewer than a quarter of gross adds and upgrades in the third quarter traded in newer devices for premium promotional offers.  As previously noted, only about 20% of AT&T’s postpaid smartphones are on Unlimited Elite – the company’s highest-ARPU and fastest-growing rate plan.

With postpaid phone ARPU stabilizing in 2022, AT&T expects higher wireless service revenues from a growing postpaid subscriber base. McElfresh also indicated that he believes AT&T can continue to profitably increase its wireless market share going forward and reiterated that the company continues to expect fourth-quarter EBITDA growth to exceed third-quarter levels.

When asked about fiber penetration levels, McElfresh responded, “What I am focused on more than penetration levels is that we are demonstrating that we can step up our net add performance quarter to quarter.”  In the third quarter, AT&T added 289,000 fiber customers which was down year-on-year from 357,000. However, the company also said that 70% of its net adds were new to AT&T.

To help entice consumers to switch to AT&T’s fiber network, McElfresh said that the company has a dedicated fiber team within its consumer wireline business that is working in neighborhoods to sell fiber. He added that they are measuring the number of net adds they can achieve in 30 days, 60 days and 90 days in those local markets and they are seeing those numbers accelerate.

References:

https://about.att.com/story/2021/mcelfresh-wells-fargo-conference.html

https://investors.att.com/~/media/Files/A/ATT-IR-V2/events-and-presentations/final-wells-fargo-transcript-11-30-21.pdf

https://www.fiercetelecom.com/broadband/atts-mcelfresh-company-hitting-game-speed-fiber-build

https://techblog.comsoc.org/2021/09/21/att-ceo-john-stankeys-30m-locations-could-be-passed-by-fiber/