AT&T's $14B Project VIP: breaking out the business service, U-verse numbers
AT&T's (NYSE: T) $14 billion Project Velocity IP (or VIP) is one of the telco's most ambitious network buildout initiatives to date. Over the past year, it has been making continual progress in expanding both its U-verse and fiber to the building (FTTB) footprint.
In our special report, we're tracking the investments it has made throughout its service territories through this program.
After months of speculation, Project VIP gave the telecom industry an answer to how AT&T would handle its rural wireline network assets. With Project VIP, it aims to upgrade much of its wireline network to an IP-based infrastructure and migrate some of its harder-to-reach copper customers to 4G LTE wireless services.
On the wireline side of its business, its goal is to upgrade and extend services 57 million customer locations (both consumer and SMB), including U-verse expansion, U-verse IP DSLAM, upgraded speeds, and bringing fiber to multi-tenant office buildings.
U-verse is a $12 billion revenue stream for the company, and the telco has been advancing on two goals: increasing speeds and building the reach of the service to more locations.
After being foreshadowed by company CFO John Stephens during the second quarter earnings call, it recently expanded the reach of its 45 Mbps U-verse broadband option to 40 additional markets. Initially, the 45 Mbps option was provided only in California and Nevada. Looking forward, the telco plans to also offer a 75 Mbps and even a 100 Mbps option at a later point.
Although it is sticking to a hybrid copper/fiber FTTN architecture to power these deployments, the telco has been rolling out fiber to the home services in some new housing developments via its Connected Community program, including most recently Dewhirst Properties in Knoxville, Tenn. Despite the nearly limitless amount of bandwidth, it is offering only a 24 Mbps data tier.
The telco is being no less aggressive in the business services arena via its FTTB program.
AT&T has held a top ranking in Vertical System Group's U.S. Ethernet Leaderboard report for over six years, and equipping more buildings with on-net fiber has become a key component to delivering higher speed cloud and Ethernet services.
By the end of 2013, it plans to pass 250,000 business customer locations and 1 million additional business customer locations by the end of 2015 with fiber.
"We're making substantial progress under our fiber to the building program, and, in fact, we're ahead of our build schedule so far this year," said Matt Beattie, executive director for AT&T's FTTB program, in an interview with FierceTelecom. "We've installed fiber and electronics to thousands of multi-tenant buildings, making fiber services available to tens of thousands of business customer locations, across our 22-state wireline service area."
Beattie added that as it looks entice more businesses with higher speed services, the telco has dedicated 100 sales representatives to the FTTB program across its 22 state footprint, with plans to add more over the coming months.
The investments AT&T is making in its each of the states and cities where it provides services varies widely, so we're ranking each investment according to dollar amount. Topping the list are California and Texas, two states where the telco allocated $1.15 and $1 billion in the first half of 2013, respectively, respectively, to fund consumer and business service buildouts.
Updated chart on Sept. 26 to reflect AT&T capex numbers.