AT&T (NYSE: T) has two ambitious missions in front of it: bring 1 Gbps FTTH service to an additional 12.5 million homes per its agreement with the FCC to get its DirecTV deal approved and scaling its satellite TV service.
But it faces the lingering question of how it will meet these goals.
Speaking to investors during the Goldman Sachs 24th Annual Communacopia Conference, John Stephens, CFO of AT&T, said that when it comes expanding FTTH, the telco has an ace in its hole: its existing fiber-to-the-node (FTTN) network.
"We have a lot fiber to the node and a lot of fiber deep into the neighborhoods," Stephens said. "To get fiber-to-the-premises in some situations like in my home where we have the company's lines on telephone poles on an aerial basis connected to my home, it's much less expensive and much quicker to bring fiber to my home."
Stephens said that what has enabled them to get to this point was laying a foundation with FTTN through its multi-billion dollar Project VIP initiative.
As of the end of the second quarter, AT&T converted over 90 percent of IP-eligible subscribers to U-verse IP Internet, up from the 80 percent it reported in the first quarter of 2015. The company now has less than 1 million eligible DSL subscribers left to transition to the IP-based platform.
"It's pretty easy to work down the alley and fiber up the whole neighborhood," Stephens said. "Those are the kinds of things we have done with VIP and made this base investment and built this network of extensive fiber out there getting fiber-to-the-premise becomes much more achievable."
It will also continue to enhance its existing FTTN network by increasing the amount of customers that can get 45 Mbps and above speeds. AT&T has committed to bring 45 Mbps or higher broadband speed services to nearly 26 million homes over the next four years.
"We have done about 20 million homes today with 45 Mbps speeds or better and getting to about 26 million is very achievable over a four year period," Stephens said. "The 12.5 million [subscriber] commitment is included in that 26 million commitment -- they are not separate."
But FTTH is only one area where AT&T is improving its installation methodology. No less important will be the installation of new DirecTV satellite TV customers.
The service provider is putting in place new methods to expedite the delivery of DirecTV service to more of its broadband customer base, the service provider is enhancing the installation process for satellite TV services.
A key goal of the new installation process is to reduce the cost and time a technician will take to activate new satellite and broadband services customers.
"We're going through a process now so we can take advantage of a one truck roll approach to installing broadband and satellite TV," Stephens said. "Once we get those technicians trained we can go to a simple truck roll we'll go forward."
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