FTTP
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.
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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
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) |
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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)
Frontier’s FTTP to reach 10M locations by 2025; +192,000 FTTP passings in 4Q-2021
Frontier Communications says it’s on track with a plan to add 1 million fiber-to-the-premises (FTTP) locations in 2022. Under the plan, Frontier expects to expand its FTTP footprint to 10 million locations by 2025, up from about 4 million today. However, fiber-related revenue growth has yet to match up to recent fiber subscriber and NPS gains. Frontier reported Q4 2021 fiber revenues of $675 million, down from $684 million in the year-ago period.
“We’ve got good supply resilience. We’ve expanded the number of vendors in every category, and we’ve got good forward cost visibility as well,” Nick Jeffery, Frontier’s president and CEO, said Wednesday on the company’s 4th quarter 2021 earnings call.
But he acknowledged that Frontier, which has taken on a “fiber first” posture, was “lucky,” in that the company started to accelerate its fiber build ahead of many other telcos and cable operators.
“We’re in relatively good and insulated position because, frankly, we got there first and we signed up the terms before anyone else had a chance to do so,” Jeffery said.
Supply chain constraints didn’t slow Frontier’s fiber build in Q4 2021, as the company added a record 192,000 FTTP passings in the quarter, improving on the 185,000 new fiber passings built in Q3 2021. Last month Frontier announced that it added a record 45,000 fiber broadband subscribers in the fourth quarter of 2021, beating its prior record in Q3 2021 by more than 50%. That was also enough to overtake subscriber losses from Frontier’s legacy copper broadband business, as the company posted a Q4 net gain of 14,000 consumer broadband subs. Frontier ended 2021 with 1.33 million fiber broadband customers, up 8% year-over-year. About half of Frontier’s consumer broadband sub base is now served by fiber.
Frontier, which launched a symmetrical 2-Gig fiber service on February 22nd, is seeing solid penetration in its existing “base” FTTP markets and positive signs in newer fiber buildout areas. Penetration in Frontier’s relatively mature base-fiber footprint rose to nearly 42%, and the company expects that to eventually increase to 45%.
In its FTTP expansion effort, Frontier is seeing penetrations of 22% at the 12-month mark, expecting that to rise to 25% to 30% at 24 months. In later years, the company expects the percentage to jump to a terminal penetration of 45%.
“We’re now, I believe, gaining market share in all of our fiber markets against every single one of our competitors,” Jeffery said. “That is not a moment in time or an aberration. That’s the result of strong operational execution across many different dimensions, and I think we’ll see that carry forward into the future.”
Frontier said its fiber-related net promoter score (NPS) went positive for the first time in November 2021, while fiber churn dropped to 1.32% in Q4 2021, improved from 1.56% in the year-ago quarter.
Scott Beasley, Frontier’s CFO, said Frontier expects fiber revenues to reach positive territory as 2022 progresses, driven by the growth of its consumer fiber segment and a stabilization of the company’s business and wholesale units.
MoffetNathanson analyst Nick Del Dio had this to say in a research note to clients:
“Large scale network upgrade projects take years to complete. Achieving targeted levels of penetration once the network in a given geography has been upgraded takes years, too. By our estimates, it will be about a decade before Frontier’s potential will be fully realized.”
“Frontier’s operating metrics continue to move in the right direction. Total consumer broadband net adds were positive for the first time in many, many years; copper losses were stable, while the company gained fiber subscribers in both new and existing markets. Fiber gross adds and churn both improved in Q2. Frontier’s fiber NPS scores have improved dramatically over the past year, going from -24 in January 2021 to +9 in December 2021, a 33 point swing, with NPS scores associated with new customers better than those associated with old customers. The company expects continued strength in fiber and better churn in copper in coming periods. Consumer fiber broadband ARPU declined about $1 sequentially, which management attributed to promoting autopay adoption and giving gift cards for new customers.”
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Frontier’s plan to bring FTTP to 10 million locations by 2025 includes what the company calls Wave 1 and Wave 2 builds. Wave 3 includes another 5 million locations that might be built out using supplemental government funding and partnerships, or could be tied to potential divestments or system swaps. Frontier’s analysis of the Wave 3 section continues, and the company should have some specific guidance in the coming months, said John Stratton, Frontier’s executive chairman of the board.
Q4 2021 was the last quarter in which Frontier received subsidy revenues from the Connect America Fund (CAF) II program. Yet they hope President Biden’s infrastructure bill passes and directs revenues to telcos to help them build out their networks.
“It’s complicated,” Stratton said with respect to government stimulus funding, noting that Frontier expects to be an active participant in the new infrastructure bill. “The rules of engagement, both at the federal and state level, are still being worked… Our thought process is that this a 2023 and onward in terms of it becoming something that starts to scale.”
References:
Cox Communications commits to symmetrical 10-Gig; many upgrade paths are possible
Cox Communications is the latest U.S. cable operator to formally announce a commitment to “10G,” the cable industry’s initiative focused on delivering symmetrical 10-Gig speeds over multiple types of access networks, including hybrid fiber/coax (HFC), fiber-to-the-premises (FTTP) and fixed wireless. Comcast is definitely on board that train, an executive told this author. Both Comcast and Charter Communications have announced lab tests of DOCSIS 4.0, and CableOne formed a partnership to pursue FTTP deployments and is preparing for DOCSIS 4.0 upgrades as it begins to boost the capacity of its HFC networks to 1.8GHz.
Cox estimates it has invested more than $19 billion in network and product upgrades over the past decade. The company promises to deliver on their 10G plan through a mix of upgrades to DOCSIS 4.0 on HFC and deployments of FTTP. The company has previously made some FTTP headway under a “Gigablast” initiative focused on extending 1-Gig capabilities across the bulk of its footprint. The privately held network operator said it will make a “multibillion-dollar annual infrastructure investment over the next several years to build a 10-Gigabit-capable, fiber-based network.”
“Connectivity is at the heart of everything we do. With new applications of technology from virtual reality classrooms to autonomous vehicles to the metaverse, people will require increased bandwidth to power their digital futures,” said Mark Greatrex, president of Cox Communications. “Included in this investment is our commitment to bring robust and reliable services to underserved communities and to be the internet provider customers count on to make those valuable connections a reality,” he added.
In addition to faster speeds, Cox also continues to provide secure and reliable WiFi connections covering the whole home. Cox’s Panoramic WiFi offers the latest gateway technology to deliver the most advanced experience with reliable speed, coverage, control and security that can be easily updated as technology changes. Customers also have personal control and security through the Panoramic WiFi app with Advanced Security, protecting every device connected to their network.
“Our intent is to remind the market that we are going to continue to aggressively invest in the communities we serve to maintain and build highly competitive networks,” a Cox spokesman wrote in an email to Telecompetitor.
Multiple Upgrade Paths are Possible:
A typical upgrade involves deploying XGS-PON equipment on the same infrastructure that supports widely deployed GPON technology. A key question for cable companies is whether to invest in DOCSIS 4.0 and in augmenting HFC infrastructure to obtain speeds that might reach 6 Gbps symmetrically, or whether it would be more prudent to deploy XGS-PON. All the major cable companies – including Cox – seem to be wrestling with that issue. XGS-PON can support speeds approaching 10 Gbps in both directions.
Supporting multi-gigabit symmetrical speeds is challenging for cable companies’ traditional hybrid fiber coax (HFC) infrastructure. Although the cable industry’s DOCSIS 3.1 and DOCSIS 4.0 specifications call for speeds up to 10 Gbps downstream, upstream bandwidth is more limited. DOCSIS 3.1 and DOCSIS 4.0 are just part of the CableLabs 10G initiative which aims to enable cable companies to support multi-gigabit speeds. Maximizing symmetrical speeds – and the number of customers who can obtain those speeds – will require other network upgrades, such as taking fiber closer to the customer and/or splitting nodes and moving to a DAA approach to reduce the number of customers served from each node.
It appears that not all cable operators will pursue DOCSIS 4.0 aggressively. Altice USA, as one example, announced this week it will accelerate its deployment of FTTP upgrades in both its Optimum and more rural-facing Suddenlink footprints. In Europe, Liberty Global will take multiple upgrade paths using both FTTP and HFC/DOCSIS 4.0, but building fiber overlays is the primary focus at Virgin O2 in the UK, Virgin Media (Ireland) and Telenet (Belgium).
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As a private company, Cox Communications does not publicize financial data, but the company has in the neighborhood of 6 million residential broadband customers, and nearly 7 million when business customers are included. A company official told Light Reading that Cox continues to grow total customers, with nearly all new customers taking broadband.
The Cox multi-gigabit press release references a “fiber-based network to more than 100,000 homes and businesses in communities near [the company’s] existing footprint.” In doing this, Cox said it expects to leverage federal funding opportunities – a potential reference to the BEAD program created in the infrastructure act adopted late last year, although the spokesman declined to confirm that.
Cox declined to say what percentage of its network will head down the road of D4.0 or all-fiber, but did note that its current investment commitment includes bringing broadband to underserved communities. Cox came away with a small piece of the first phase of the Rural Digital Opportunity Fund (RDOF) auction – about $6.63 million for 8,212 locations in nine states. The company said it hopes to partner with local cities and towns in pursuing these funding opportunities, but here, too, the spokesman declined to provide specifics.
This won’t be the first time Cox has pursued rural broadband opportunities. The company won funding in the 2020 Rural Digital Opportunity Fund to cover some of the costs of deploying fiber broadband in unserved rural areas, and the company received final authorization of that win in December.
About Cox Communications:
Cox Communications is committed to creating meaningful moments of human connection through technology. The largest private broadband company in America, we proudly serve nearly seven million homes and businesses across 18 states. We’re dedicated to empowering others to build a better future and celebrate diverse products, people, suppliers, communities and the characteristics that make each one unique. Cox Communications is the largest division of Cox Enterprises, a family-owned business founded in 1898 by Governor James M. Cox.
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References:
https://www.lightreading.com/cable-tech/cox-sets-path-to-10g-/d/d-id/775402?
Cox Plans Multi-Billion Dollar Symmetrical Multi-Gigabit Upgrade
Cable One joint venture to expand fiber based internet access via FTTP
Analysts: Increased Fiber internet services may force cablecos to alter pricing & deploy FTTP
Several analysts believe the increased availability of Giga bit/sec FTTP (fiber to the premise) service offerings (with flat rates) could force cablecos to rethink their pricing strategy. For example, Jonathan Chaplin of New Street Research stated in a note to clients that cable’s promotional pricing is generally competitive with fiber offers. The problem, however, is that cable service ends up costing consumers significantly more than fiber based broadband access once those introductory rates disappear. “We have hypothesized for a couple of years that 1) Cable’s pricing strategy contributes to high churn and low NPS scores and 2) that it is unsustainable. We don’t think Cable has to cut price to remain competitive; we suspect they do have to fix the pricing model.”
Recon Analytics founder Roger Entner agreed, telling Fierce Telecom his research has shown price is the number one reason people join or leave a service provider. While consumers find promotional pricing very attractive, they’re generally unhappy when their promotions end. “So, for the cable companies, it’s both a gross addition driver and a churn driver as well,” he explained. While cable’s pricing strategy worked well when there was no competition to offer similar broadband speeds or features, that is now changing as fiber is becoming more broadly available, Entner said.
Indeed, fiber based telcos are already seizing on the opportunity to lure customers in with the promise of more simplistic pricing. For instance, AT&T used its recent launch of multi-gig fiber broadband plans as an opportunity to introduce new “straightforward” pricing which promises a flat rate with equipment and other fees included.
Speaking on an episode of Entner’s podcast, AT&T’s EVP and GM of Broadband Rick Welday stated there is “significant” demand in the market for simple pricing. “It’s obvious that consumers are done with this intro pricing where you see a fun, attractive, low rate advertised on television, you go sign up with that ISP and then 12 months later your rate jacks up considerably. Frankly, this is the model that cable has chosen. It seems to align with their video business and annual increases in carriage fees,” he said. Welday argued AT&T’s new cost model is a “game changer in terms of an ISP really obsessing over how to be transparent and upfront with the market.”
Chaplin said a shift by cable to the flat pricing model fiber players use might “weigh on gross adds initially.” However, he predicted net additions would ultimately “land in a similar place” over the course of a couple years while reduced churn would yield “lower costs and higher margins.”
Despite the potential benefits, Entner said he doesn’t expect cable to change its approach right away. “The system is still working and so you have a lot of inertia in the system. Only when cable is actually losing customers will this change,” he concluded.
Source: https://kitz.co.uk/adsl/fttp.htm
In addition, cablecos are planning FTTP deployments in the near future. I’ve heard that directly from an anonymous Comcast executive who told me to look out for their upcoming 10G bit/sec service.
We previously reported that a Cable One joint venture (JV) with three private equity firms is seeking to speed its expansion of fiber based Internet access to underserved markets. Clearwave Fiber is a newly formed joint venture that holds Clearwave Communications and certain fiber assets of Hargray Communications. Cravath is representing Cable One in connection with the transaction. With the formation of the JV, Clearwave Fiber intends to invest heavily in bringing Fiber-to-the-Premise (“FTTP”) service to residential and business customers across its existing footprint and near-adjacent areas.
Meanwhile, CableLabs has developed technologies that fall under the platform’s key tenets including capacity, security and speed. Increasing the number of bits per second that are delivered to subscribers can improve download and upload speed, a primary objective for the 10G platform. As data demands increase, many operators are considering increasing capacity on the existing optical access network.
To help operators better meet that demand, CableLabs recently published its first set of specifications for a new device, called the Coherent Termination Device, that enables operators to take advantage of coherent optics technologies in fiber-limited access networks.
References:
https://www.fiercetelecom.com/broadband/analysts-fiber-could-force-cable-overhaul-its-pricing-model
https://www.fiercetelecom.com/operators/at-t-puts-cable-companies-notice-fiber-plan
https://kitz.co.uk/adsl/fttp.htm
Ziply Fiber deploys 2 Gig & 5 Gig fiber internet tiers in 60 cities – AT&T can now top that!
10-Gbps last-mile internet could become a reality within the decade from Futurology
WideOpenWest picks Seminole County, FL as its 1st greenfield area for FTTP deployments
MetroNet’s FTTP buildout in Florida; Merger with Vexus Fiber
Cable One joint venture to expand fiber based internet access via FTTP
Lumen Technologies Fiber Build Out Plans Questioned by Analysts
Lumen Technologies is one of a large and growing number of telecom companies counting on a broad expansion of its fiber network. The Fiber Broadband Association (FBA) recently reported that the fiber industry is entering its “largest investment cycle ever” thanks to the efforts of companies like AT&T, Verizon and Lumen.
Lumen hopes to build its fiber network to 12 million new locations over the coming years. But it won’t be easy, according to Lumen CEO Jeff Storey.
“Supply chains are stressed, and we continue working very closely with our diverse and valued suppliers to mitigate risk as we execute on our growth objectives,” Storey said this week during his company’s quarterly conference call, according to a Seeking Alpha transcript. Others have issued similar warnings.
“I don’t want to overstate the issue, but it’s something that we are really paying attention to and working with vendors. We are starting to see some companies hold off on taking new orders. And as we see that, then we are working to put in our mitigation plans to make sure it’s factored into our build plan. But it is an issue that I will highlight as a real one that we have to mitigate.”
Lumen Technologies reported fourth-quarter results and 2022 expectations that generally fell below the forecasts of some financial analysts.
“Lumen’s 2022 guidance will fuel concerns that the company will have no choice but to eventually let leverage rise to inappropriate levels, dial back on investment, cut the dividend, or choose some combination thereof,” wrote the financial analysts at MoffettNathanson. “In particular, 2022 EBITDA [earnings before interest, taxes, depreciation, and amortization] guidance was noticeably below expectations at a time when capex will be elevated.”
“Results at this stage don’t give investors confidence in the company’s ability to earn an adequate return,” wrote the financial analysts at New Street Research.
Lumen and other fiber providers like Frontier Communications and AT&T are moving forward with their fiber buildout plans. Some, like AT&T and Frontier, are reporting big gains in the number of their new fiber customers. But others, like Lumen, are not.
“The past few quarters have been relatively weak for broadband net additions for Lumen, even for its higher-speed fiber offering,” MoffettNathanson said of Lumen’s consumer broadband business. “This quarter’s broadband net adds were at the low end of what the company has reported over the past few years and were shy of consensus estimates.”
The financial analysts at Evercore wrote that Lumen’s business segment drives three-quarters of the company’s revenue, and that too remains stressed. “The jury remains very much out on the company’s prospects in this sector,” they wrote, noting that sales in the company’s business segment declined slightly in the fourth quarter when compared with the third quarter of last year.
New Street analysts say a key metric for Lumen will be the percentage of customers in a given area who opt to purchase its new fiber optic access. If Lumen gets 40% of potential customers to sign up, the company likely will generate profits. “At 30%, the company would likely destroy value,” they warned.
Lumen CEO Storey stated that the company has already managed to get an average of around 29% of customers in its new fiber markets to sign up for its service. And that, he said, is with relatively little marketing.
He expects that number to be above 40% in the months and years to come. “If you look at the quality of the product that we have, we have a very effective competitive product and even with the limited marketing, we are doubling our penetration rates in our traditional copper areas,” Storey said.
New findings from the financial analysts at Cowen are supportive of Lumen’s fiber optic build out plans. The Cowen analysts recently conducted a nationwide survey of more than 1,000 respondents and found that fiber-to-the-home (FTTH) “take rates” reached 56% among those surveyed.
“Take rate, or more specifically, market penetration, is a key driver of the FTTH business case,” they wrote. “We have previously noted that a penetration rate of 30-35% is the typical minimum break-even threshold when underwriting FTTH projects. When there is one broadband competitor, fiber penetration can approach high-50s and even 60% penetration levels in mature markets.”
Lumen CMO Shaun Andrews said: “One of the things that really differentiates us right now is our focus on fiber as part of the core infrastructure to an edge experience versus a distraction with 5G or content. And being able to look an enterprise in the eye and say ‘Not only do we have these capabilities, but we will build the fiber to you where you are.’ That resonates with customers, and I think that’s a differentiator.”
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Last month, Lumen reported that they secured a massive $1.2 billion contract with the U.S. Department of Agriculture (USDA), setting it up to give one of the biggest government agency networks a major makeover.
Under the contract, Lumen will “completely transform” the USDA’s network covering 9,500 locations across the country. It will provide a range of services, including SD-WAN, managed trusted internet protocol, zero-trust networking, edge computing, remote access, virtual private networking, cloud connectivity, unified communications and collaboration, contact center, voice-over-internet protocol, ethernet transport, optical wavelength, and equipment and engineering.
References:
https://www.lightreading.com/opticalip/analysts-fret-over-lumens-fiber-plans/d/d-id/775229?
https://www.fiercetelecom.com/telecom/lumen-reels-12b-contract-overhaul-usdas-legacy-network
Lumen’s big fiber roll-out push from 2.5M to 12M locations passed in the next few years
Lumen Technologies to empower customers to set up the wavelength subnetworks
CenturyLink rebrands as LUMEN for large enterprise customers; adds Quantum Fiber
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
WideOpenWest picks Seminole County, FL as its 1st greenfield area for FTTP deployments
Like so many legacy and regional telcos, cablecos, WideOpenWest (WOW) [1.] is pursuing aggressive fiber-to-the-premises (FTTP) deployments. The company is targeting a part of Seminole County, Florida located near Orlando, as the first area for its ambitious plan to deploy FTTP Internet access to greenfield areas. Cableco Charter Communications currently provides broadband internet service to Seminole County.
This new expansion is part of the company’s larger Greenfield initiative to build new markets non-adjacent to its existing network and bring its advanced fiber technology and award-winning customer service to customers across its growing footprint. WOW! already serves Pinellas County and Panama City in Florida and identified Seminole County as a new community ripe for innovation and growth. The company plans to reach more than 60,000 homes passed upon completion of the project.
Note 1. WideOpenWest is the sixth largest cable operator in the United States with their network passing 3,248,600 homes and businesses. The company offers landline telephone, and broadband Internet services, and IPTV. As of December 31, 2020, WOW! has about 850,600 subscribers. They offer up to 1 Gb/sec downstream fiber internet service in some areas.
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WOW estimates it will invest at least $60 million in the county for its FTTP deployment. The estimated cost of $1,000 per passing is consistent with prior expectations.
“We are excited to announce Seminole County as the first service area to kick off our Greenfield initiative,” said Teresa Elder, CEO of WOW!. “We are delighted to offer communities in Seminole County a better broadband choice so they can work, learn and be entertained using WOW!’s multi-Gig fiber-to-the-home network. Area residents and businesses will be pleasantly surprised by our reliable network, super-fast speeds and choice of exceptional products to meet their broadband usage needs.”
Work on the new all-fiber infrastructure in Seminole County has already begun. Once completed, customers will benefit from WOW!’s innovative technology and product suite that provides the best in choice, reliability, speed and value. Customers will have access to multi-Gig HSD service, WOW!’s fastest broadband speed available, home and business WiFi solutions to support streaming, remote work and small business needs as well as WOW! tv+, its premier IP-based video service.
“Investing in Seminole county is investing in its community, its people, and its growth,” said Kirk Zerkle, VP of Market Expansion at WOW!. “We are thrilled to give residents and businesses in Seminole County the service they deserve. We know how important it is to be connected in every aspect of our lives and look forward to WOW! becoming an integral part of this county.”
The selection of Seminole county comes almost two months after WOW announced that building FTTP networks to greenfield markets [2.] will play a big role in fueling growth over the next five years. WOW recently sold off a handful of systems for $1.8 billion to help fund this growth initiative. The company intends to build out fiber networks to greenfield areas passing at least 200,000 homes and businesses by 2027, with the potential to expand that to 400,000 locations.
Note 2. WOW has identified greenfield areas as those that are not-adjacent to its existing markets which have low density. The company expects to announce additional greenfield markets later this year.
WOW! continues to pursue expansion opportunities across the country and expects to announce additional markets later this year.
“We’ve reached an inflection point in the industry where fiber-to-the-home build costs have reached parity with HFC [hybrid fiber/coax],” Henry Hryckiewicz, WOW’s chief technology officer, explained at an investor day held in December 2021.
About WOW! Internet, Cable & Phone:
WOW! is one of the nation’s leading broadband providers, with an efficient, high-performing network that passes 1.9 million residential, business and wholesale consumers. WOW! provides services in 14 markets, primarily in the Midwest and Southeast, including Michigan, Alabama, Tennessee, South Carolina, Florida and Georgia.
With an expansive portfolio of advanced services, including high-speed Internet services, cable TV, phone, business data, voice, and cloud services, the company is dedicated to providing outstanding service at affordable prices. WOW! also serves as a leader in exceptional human resources practices, having been recognized eight times by the National Association for Business Resources as a Best & Brightest Company to Work For, winning the award for the last four consecutive years.
Source: WideOpenWest
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Please visit wowway.com for more information.
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WOW! Media Contact:
Jamie Mayer
[email protected]
References:
MetroNet’s FTTP buildout in Florida; Merger with Vexus Fiber
Continuing with the massive U.S. fiber to the premises (FTTP) movement, regional fiber carrier MetroNet (headquartered in Evansville, Indiana) said it will bring fiber-optic internet access directly to homes and businesses throughout the Deltona, FL and neighboring communities, including DeBary and Orange City.
Deltona marks the third community in Florida that will have access to MetroNet services through a fully funded $35 million investment in the community. The three-year construction project is set to begin in the summer of 2022, with the first customers able to receive service as early as the fall of 2022.
Once completed, Deltona will join the country’s internet elite as a Gigabit City. Only about 40 percent of households in the U.S. have access to symmetrical upload and download gigabit (1,000 mbps) speeds that only fiber optic networks can provide.
“MetroNet is thrilled for Deltona residents and businesses to have access to our future-proof services that will allow sparkling 4k video streaming, glitch-free gaming, crystal-clear virtual meetings, and internet experiences of the future that we can only begin to imagine,” said John Cinelli, MetroNet’s CEO. “MetroNet is proud to soon be able to add Deltona to our growing list of Gigabit Cities.”
MetroNet plans to hire local market management positions, sales and customer service professionals, and service technicians to support the Deltona area. Those interested in joining the MetroNet team can visit MetroNetInc.com/careers to search available positions and to submit applications.
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Last week, Metronet announced it has merged with fellow independent fiber based network provider Vexus Fiber. The combined companies will continue to operate under their existing brands and with their existing executive roster. Financial terms of the deal were not disclosed.
Vexus, based in Lubbock, TX, deploys and operates FTTP networks in Texas and Louisiana, with plans for expansion in New Mexico. Markets currently serving those states include Lubbock, Amarillo, Wichita Falls, Abilene and surrounding areas of Texas, as well as Hammond, Covington and Mandeville in Louisiana. New FTTP networks in the Rio Grande Valley are in various stages of deployment (see “Vexus Fiber to Build FTTH Network in Rio Grande Valley Region of Texas”), Tyler, Nacogdoches, and San Angelo, TX; Lake Charles, LA; and Albuquerque and Santa Fe, NM. Investors in the company included Pamlico Capital and Oak Hill Capital.
Metronet is operating or building FTTP networks in more than 120 communities in Indiana, Illinois, Iowa, Kentucky, Michigan, Minnesota, Ohio, Florida, North Carolina, Virginia, Texas, Wisconsin, and Missouri. It had received cash from KKR last April (see.) “KKR will take stake in Metronet as part of new funding round”) Oak Hill Capital is also an investor. Both companies provide gigabit or faster broadband services to their residential and business customers.
“We are very excited to welcome Vexus Fiber and their partners to Metronet,” said Metronet CEO John Cinelli. “Vexus has rapid growth and a high-customer-service mindset, similar to Metronet, and joining them allows us to expand our service area to even more Americans.”
“At Wexus, our mission is to bring our high-quality service to as many homes and businesses as possible in the Southwest,” said Jim Gleeson, president and CEO of Wexus. “With this merger, we can reach even more people faster.”
About MetroNet:
MetroNet is the nation’s largest independently owned, 100 percent fiber optic company headquartered in Evansville, Indiana. The customer-focused company provides cutting-edge fiber optic communication services, including high-speed Fiber Internet and full-featured Fiber Phone with a wide variety of programming.
MetroNet started in 2005 with one fiber optic network in Greencastle, Indiana, and has since grown to serving and constructing networks in more than 150 communities across Indiana, Illinois, Iowa, Kentucky, Louisiana, Michigan, Minnesota, Ohio, Florida, North Carolina, Virginia, Texas, Wisconsin, Missouri, and New Mexico. MetroNet is committed to bringing state-of-the-art telecommunication services to communities — services that are comparable or superior to those offered in large metropolitan areas.
MetroNet has been recognized by PC Mag as one of the Top 10 Fastest ISPs in North Central United States in 2020 and Top 10 ISPs with Best Gaming Quality Index in 2021. Broadband Now has recognized MetroNet as the Top 3 Fastest Internet Providers and Fastest Fiber Providers in the Nation in 2020, and #1 Fastest Mid-Sized Internet Provider in two states in 2020. In 2020, MetroNet was awarded the Vectren Energy Safe Digging Partner Award from Vectren. For more information, visit www.MetroNetinc.com.
Media Contact: Katie Custer [email protected] 502.821.6784
References:
Ziply Fiber deploys 2 Gig & 5 Gig fiber internet tiers in 60 cities – AT&T can now top that!
Ziply Fiber has launched two multi-gigabit, symmetrical broadband Internet tiers– at 2 Gbit/s and 5 Gbit/s – in 60 cities and towns in parts of Washington, Oregon, and Idaho. The two new fiber Internet service plans will initially be available to nearly 170,000 physical addresses in those three states. This comes after Ziply conducted a successful small market test in Kirkland, Washington. Customers in Montana will gain access to the multi-gig options later this quarter, with availability expected across most of the company’s existing footprint by the middle of the year.
Pricing for the 2-Gig tier runs $120 per month while the 5-Gig tier costs $300 per month. Both multi-gig tiers will require users to get a special router that includes WiFi 6 compatibility, a 10G WAN port and either a 2.5G LAN port for the 2-gig plan or a greater than 5G LAN port for the 5-gig option.
Ziply is the first among regional and national residential providers — those with a customer base of more than 1% of the US population — to deliver these speeds. By doing so, Ziply has become the fastest major internet provider not only in the Northwest, but across the entire U.S.
Ziply Fiber, formed in 2020 via the acquisition of Frontier Communications’ operations in Washington, Oregon, Idaho and Montana, expects to launch the new multi-Gig tiers to the rest of its footprint by the second quarter of 2022, and to make them available in every new fiber market launched thereafter, said Harold Zeitz, Ziply Fiber’s CEO.
Zeitz told Fierce Telecom that more than half of Ziply’s customers already take its 1 Gbps plan, “so we already have customers who seem to want faster speeds compared to others.” He added the December trial covered five markets across Washington and Oregon and included a sample group of “tens of customers” who proactively sought access to the faster speed tiers. “There were no problems whatsoever,” Zeitz said of the trial. “We were able to demonstrate measured speed and it gave us confidence to go ahead and launch it broadly.”
Ziply Fiber’s new uncapped and no-contract tiers follow the company’s ongoing deployment of a 10-Gig capable XGS-PON access network and underlying core network. Zeitz said the launches prove that consumers don’t have to live in a big city to get big speeds. “It’s a revitalization opportunity,” he said. “It demonstrates the future-proof element of the technology.”
The company also sells a 50Mbit/s tier for $20 per month and a 200Mbit/s service for $40 per month. Zeitz estimates that “well over half” of Ziply Fiber’s broadband customers choose the 1-Gig tier.
Zeitz said offering broadband without a cap or a contract puts welcome pressure on the company. “Yes, we think it’s a differentiator, but I also think it helps motivate us to make sure we’re delivering great service, he said.
Other Gig FTTP Internet competitors:
Ziply Fiber’s 5-Gig service appears to raise the bar on a fiber-to-the-premises (FTTP) residential broadband offering offered in multiple states. With the exception of Google Fiber and Xfinity, none of the top internet providers have dared to push the internet speed limit past a single gig. Google Fiber offers a 2-gigabit plan throughout most service areas while a limited few Xfinity customers can sign up for 3 gigs, but no 5 Gig yet. Among smaller regional players, EPB of Chattanooga, Tennessee, currently offers a residential 10-Gig service starting at $299 per month in select areas.North Dakota’s MLGC debuted a 5 Gbps service tier in 2020, while TDS rolled out a 2-gig offering and Dobson Fiber launched a 10 Gbps offering last year.
Here’s the current competitive status from nationwide FTTP providers:
- Comcast’s targeted residential FTTP service, Gigabit Pro, was recently upgraded to deliver speeds of 3 Gbit/s for $299.95 per month (with a two-year contract).
- Google Fiber has been expanding the availability of a fiber-based service that delivers 2 Gbit/s down by 1 Gbit/s up.
- AT&T has hinted that a multi-gigabit service is in the works, but has not announced pricing or launch timing.
Analysis:
The burning question this author has is how will Zipply customers use even a fraction of their allotted 2 Gig or 5 Gig upload and download speeds? I have over 10 connected WiFi devices in my home where my 100 Mb/sec download speed is sufficient.
“This is for people to develop new use cases, et cetera,” Zeitz concluded. “I think we don’t know all the things that people will do and so we’re an enabler.”
Also, the extra gear needed won’t be cheap. To open up any potential in-home bottlenecks, Ziply Fiber is recommending an Asus AX6000 Wi-Fi 6 router or a similar device. Customers will also need an SFP+ (enhanced small form-factor pluggable) with an RJ-45 connector that’s compatible with the router to deliver up to 5-Gig. Ziply Fiber is also selling such products online – an Asus router for $449.95, and the SFP+ for $42.99, or both bundled together for $492.94.
For the full 5-Gig, customers will need a wired Ethernet connection to the router. Depending on the performance capabilities the computer, a customer on Ziply Fiber’s multi-gig service will likely need an Ethernet adapter/dongle that supports 2.5-Gig or 5-Gig.
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24 January 2022 Update: AT&T can now equal 2 Gig and 5 Gig FTTP speeds
AT&T has boosted its existing fiber in parts of more than 70 metro areas around the U.S. to offer 2-Gig and 5-Gig symmetrical upload and download speeds.
“Where we’re launching 2-Gig and 5-Gig, we previously had 1-Gig speeds available,” said AT&T’s SVP of Broadband Product Development Cheryl Choy. The upgrades announced today affect about 5.2 million people out of about 16 million households that AT&T currently passes with gigabit speeds.
Asked why AT&T isn’t increasing speeds for all 16 million households that it passes with fiber, Choy said it’s because the company is “on a PON evolution.” It is in the process of moving from GPON to XGS PON via card upgrades and software improvements. These upgrades allow it to boost speeds above 1-Gig. Choy said that since 2019 all of AT&T’s newly laid fiber has been capable of multi-gig speeds.
Although the news of multi-gig fiber today did not require any new fiber to be laid, the company is also laying new fiber, and its goal is to cover 30 million customer locations with fiber by year-end 2025.
Pricing:
AT&T also announced it’s rolling out “straightforward pricing” across its AT&T Fiber portfolio. The 2-Gig fiber service costs $110 per month plus taxes with autopay; and the 5-Gig service costs $180 per month plus taxes with autopay.
Prices are a little higher for businesses at $225 per month for 2-Gig; and $395 per month for 5-Gig.
The company will not charge any equipment fees, nor will it require an annual contract or implement any data caps. The service also includes Wi-Fi.
Choy said, “We’ve amped up our Wi-Fi technology.” In late 2020 AT&T launched its Wi-Fi 6 enabled gateway, which provides more capacity for more connected devices. Those Wi-Fi devices will be able to take advantage of the new multi-gig speeds. AT&T’s Wi-Fi currently uses 2.4 Ghz and 5 Ghz spectrum.
According to a survey conducted in 2021 by Recon Analytics on behalf of AT&T, the average consumer has 13 connected devices in their home. But that’s expected to boom in the coming years, which will require more bandwidth.
Finally, as part of today’s news, AT&T said it has achieved up to 10-Gig speeds on fiber in its labs.
https://www.fiercetelecom.com/broadband/att-upgrades-its-fiber-network-offer-2-gig-5-gig-speeds
Ziply Fiber References:
https://www.fiercetelecom.com/broadband/ziply-debuts-2-gig-5-gig-internet-tiers-60-cities
https://www.broadbandworldnews.com/author.asp?section_id=733&doc_id=774718&
https://ziplyfiber.com/news/release/735
