AT&T Wants to Invest $42.5B to Expand Fiber-Optic Reach
AT&T released a bold plan to invest $42.5 billion to expand its fiber-optic cable network. This is part of a $42.5 billion plan by the federal government to expand broadband by handing out Monday to internet companies to expand broadband. The company aims to deliver faster internet speeds to all its customers, including those without broadband. It’s striving to improve internet connections for more than 30 million current customers and businesses by the end of 2025.
Teaming up with BlackRock, Inc., the two companies are combining efforts to fund this expansion with the aid of government funding. Previously, AT&T and BlackRock have already invested $1.5 billion to expand services and upgrade speeds for its Gigapower venture.
AT&T plans to be the anchor tenant of this network and allow other companies access to provide internet services through Gigapower, which is finalizing plans to install fiber optic connections in Las Vegas, parts of Arizona, Alabama, Florida, and northeastern Pennsylvania.
In 2022, AT&T invested $24 billion towards its fiber optic and 5G networks and sources estimate it will spend at least that much in 2023. This year, however, most of its investments will be explicitly dedicated to fiber optic development.
AT&T has reported massive gains and overall net losses in recent quarters, so this business strategy of pumping billions could turn things around for the company financially as easily as it could put AT&T in over its head debt-wise.
AT&T today announced the 1st quarter 2023 earnings with strong 5G and Fiber internet numbers. AT&T also announced that it should be able to expand its fiber internet service to over 30 million fiber locations by the end of 2025 compared to the 19.7 million residential and 3 million businesses locations it currently has.
“Ability to serve fiber to 19.7 million consumer and more than 3 million business
customer locations in more than 100 U.S. metro areas; remain on track to
pass 30 million fiber locations by the end of 2025″ AT&T said in its 1st quarter 2023 results.
In the 1st quarter of 2023, AT&T 5G added 542,000 new postpaid wireless customers. AT&T Fiber added 272,000 new customers. In total, AT&T saw mobility service revenues up 5.2% and broadband revenues up 7.3%.
“Our teams take pride in connecting more people to greater possibility through 5G and fiber,” said John Stankey, AT&T CEO. “We’re winning thanks to a proven and sustainable playbook that centers on simple, customer-centric experiences. As a result, we’re adding high-value customers, and when they choose AT&T, they stay with us. The work we’re doing today is establishing a foundation for durable, long-term growth, and we remain confident in our full-year guidance.”
AT&T even reported about $500 million in equity from net income of affiliates, primarily from its DIRECTV investment. AT&T no longer runs DIRECTV but still is the primary owner. AT&T no longer releases subscriber numbers or projections about DIRECTV after it spun off DIRECTV into its own company.