AT&T's Donovan: Fiber rollouts are targeted on a regional, bandwidth demand basis

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AT&T (NYSE: T) is finding that as the economics of building out fiber facilities to more cities and towns in its footprint improve, its rollout plans are increasingly becoming about how to  accommodate the demand for bandwidth over wireline and wireless facilities.  

Speaking at the Citi 2016 Global Internet, Media & Telecommunications Conference, John Donovan, senior EVP of AT&T's technology and operations, told investors that because it is an integrated wireline and wireless carrier, the investment plans are focused on satisfying multiple needs.

"We're now an integrated carrier so we don't look at it anymore like, 'so where's the neighborhood,' but 'where's the demand for megabytes?'" Donovan said. "When we look at that, fiber is not a point to point decision anymore, it's a point to a region kind of decision and we're saying it's going to make sense a year from now, because we're going to have a tower or there's going to be a small cell hotbed, and when you do that you have an integrated view of your returns."

The fiber that's being used for FTTH deployments in a particular metro region could then be used to provide business services and backhaul for a macro tower or one of its small cell deployments.

"We're finding an opportunity to lean in and invest a little more as you've seen with some of our plans we put out there," Donovan said. "We're optimistic that these cases now support one another and if it didn't make sense to get fiber to that neighborhood it might now, because of the business environment that's on the edge of the neighborhood or we know we're going to need a small cell setup for wireless."

Overall, the demand for higher speeds has continued to rise throughout all of AT&T's regions. This has driven the service provider to continually upgrade its copper network as well to support a range of speeds from 12 to 75 Mbps.

AT&T has also set an aggressive plan to roll out FTTH. The service provider announced in December that it would build out FTTH service to parts of 38 additional metro areas.

It currently offers 1 Gbps service in 18 metros. Upon completion of this latest build, the service provider will bring the amount of metro areas it serves to a total of 56.

Donovan said that consumers' desire for higher speeds to support multiple applications in the home has driven a refresh of its wireline network.  

"As the investment cycles started to ramp up for us and globally with people buying more speeds in more places, there was a rebirth if you will of the wireline franchise," Donovan said. "Our suppliers started to invest and get capabilities we didn't anticipate, like going from 12 Mbps to 25 Mbps and 40 Mbps on copper and at the same time the applications started to grow."

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