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5M U-Verse Homes on Hold
Thursday, 14 August 2014 22:06

Biggest current U.S. broadband build virtually stopped  I haven't confirmed Paul de Sa's suggestion that the AT&T/DIRECTV deal is a cause. 

"Prior to the DTV deal, Project VIP (announced November 12, 2012) planned to expand AT&T's U-verse video footprint from 24.5m customer locations as of 4Q12 to 32.9m by 4Q15.6 At the end of 1Q14, we estimate the project was ~45% complete, with ~28.2m locations offered U-verse video." 

    I have double confirmation that the AT&T neighborhood DSLAM (FTTN build) is barely moving forward. I've asked AT&T if they'd release the actual deployment figures for the last three quarters to get a precise measure of what's going on. 

    Instead, AT&T responded, “Our broadband build is on track. We expect the wireline IP network to reach approximately 57 million customer locations by the end of 2015. And we’ve already launched our plan to bring our fiber-based AT&T GigaPower network to up to 100 cities.” I remain skeptical without the figures but appreciate the help, on deadline, from the AT&T people.   

   5M homes were promised 45+ megabit U-Verse by the end of 2015. (Press release below.) Construction has mostly halted. The U.S. DOCSIS 3 buildout is nearly complete. The major cableco upgrades to 50+ megabits are mostly done. Verizon has done little since 2010 and the smaller telcos are still going slowly. AT&T’s 4%/year upgrades aren’t much but they are more than any other cableco or telco.

    While the tie to the DIRECTV deal makes sense, there are also major technology changes that could be the cause. Vectored DSL is delivering 50-100 megabits in Belgium, Switzerland and Holland. Vectoring needs shorter loops (500-1000 meters) than FTTN. The entire map would need to be withdrawn. But with Time Warner going to 300 megabits in Los Angeles, they may feel they need the higher speed.

     In addition, AT&T has been a major contributor to the work on G.fast. G.fast requires very short loops but delivers hundreds of megabits 50-150 meters. There's no actual gear to test yet but AT&T may be deliberately holding back until the results are clear. 

    I'll let the D.C. reporters following the mergers connect the dots. 

Sources: De Sa took over Craig Moffett's old job as telecom analyst for Bernstein. Craig's started his own firm and left big shoes to fill. Moffett is consistently rated the best on Wall Street. Paul has an unlikely background for an investment analyst. He has a physics Ph.D from Oxford. He was a senior planner at the FCC under Genachowski, where he worked with Bernstein's Internet analyst, Carlos Kirchner. 

    De Sa's work is remarkably original. He jumped almost immediately to the first group of analysts. Buy-side investors should definitely reach out for his reports. 

AT&T to Invest $14 Billion to Significantly Expand Wireless and Wireline Broadband Networks, Support Future IP Data Growth and New Services

Improved Capital Structure is Foundation for Investment and Accelerated Growth

New York, New York, November 07, 2012

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4G LTE network expansion expected to cover 300 million people by year-end 2014Wired IP broadband network expected to expand to 75 percent of customer locations in AT&T's 22-state wireline service area by year-end 2015Fiber deployment expected to reach 1 million additional business customer locations, covering 50 percent of multi-tenant office buildings in AT&T's wireline service area by year-end 201599 percent of customer locations in wireline service area expected to have high-speed
IP Internet access via IP wireline and/or 4G LTEInvestment expected to be approximately $14 billion over three years — $8 billion for wireless initiatives, $6 billion for wireline initiatives; Total capital spending expected to be approximately $22 billion for each of next three years

  

 

Last Updated on Friday, 15 August 2014 14:38