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AT&T's Stephenson: We'll equip other markets with FTTH

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AT&T (NYSE: T) hasn't given an exact timeline when they will start offering consumers 1 Gbps-capable fiber to the home (FTTH) services in Austin, but the company is keen on replicating the model in other markets.

Randall Stephenson, AT&T

Stephenson (Image source: AT&T)

Speaking at the Goldman Sachs 22nd Annual Communacopia Conference, Randall Stephenson, the telco's chairman, CEO and president, said that the economics of FTTH equipment and deployment processes have become more favorable.

"In Austin we're deploying fiber very aggressively," he said. "The cost dynamics of deploying fiber have dramatically changed. The interfaces at the homes, the wiring requirements, how you get a wiring drop to a pole, and the way you splice it has totally changed the cost dynamics of deploying fiber."

Stephenson added that "the cost dynamics look good, the revenue implications look good, the market implications look good, so you're going to see more of this over time and I fully expect you'll see us doing markets like this over the next few years."

Besides seeing an improvement in equipment and rollout costs, the other factor making a broader fiber deployment possible in other markets is that municipalities are becoming more cooperative with service providers.

"When we began deploying U-verse back in 2000, we had to go convince municipalities to let us come in and invest and provide these kinds of services to their communities," Stephenson said. "All of a sudden Google comes along and invests in Kansas City, and they get the municipalities to do things that encourage them to invest."  

Later, Google Fiber (Nasdaq: GOOG) appealed to the city of Austin, one of AT&T's key markets, with a similar model. Interestingly, AT&T announced its intention to deploy a 1 Gbps pilot only hours after the Internet search giant named the city as one of its FTTH destinations.

Stephenson added that they are seeing more municipalities asking service providers to invest in their communities.

"Cities and municipalities are saying we'd like you to come in and invest and they are beginning to accommodate and tailor terms and conditions that make it feasible and attractive for us to invest," he said. "That being the case, you'll see us do more cities around the country, and I fully expect that to happen."

FTTH may be the ultimate end-game for AT&T and other players, but the telco continues to aggressively upgrade its existing copper network with VDSL2 to support higher speeds.

In other markets where AT&T has not yet deployed FTTH, the service provider continues to up the speeds of its existing U-verse service.

After initially launching the service in California and Nevada, AT&T announced in late August that it would bring its 45/6 Mbps bandwidth U-verse Power Internet service option to an additional 40 markets across 15 states.

The telco also has plans to launch a 75 and 100 Mbps tier over the copper network as part of its Project VIP initiative sometime later this year as well.

In addition to data services, video has become a big factor. Today, the telco is deploying four simultaneous HDTV channels over its existing copper network.

"Even in those markets where not yet deploying Gigabit technology and fiber to the home, what we're able to do over our existing infrastructure continues to impress me," Stephenson said.

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Special report: AT&T's $14B Project VIP: breaking out the business service, U-verse numbers

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