AT&T revealed earlier this week it expects to miss its fiber deployment target for 2021 due to supply chain issues, but other operators thus far appear to be unafflicted by similar problems.
When he announced AT&T only expects to reach 2.5 million of its original 3 million target locations, CFO Pascal Desroches warned “if we’re feeling the pain of this, I can only imagine what others in the industry are experiencing.” But comments from operators including Frontier Communications, Lumen Technologies, Consolidated Communications and Windstream indicate they’re doing just fine.
Last week, Frontier increased its deployment targets, stating it plans to rollout fiber to 600,000 new locations in 2021, up from an original goal of 495,000. Speaking at a Cowen investor conference on Thursday, Frontier’s chief network officer Veronica Bloodworth stated it is “not experiencing supply chain issues” and has taken several steps to protect itself from labor and materials shortages as its build progresses.
“Materials and supply is one area you could run into a constraint, we don’t have that currently,” she said. “We have diversified our supplier base, we’ve put commitment contracts in place…and we’ve changed our inventory on hand appropriately to make sure that we are insulated against supply chain issues.”
Lumen’s Head of Mass Markets Maxine Moreaux made similar comments in an earlier Cowen session. “We have not seen any issues,” she said, adding “we have diversification not only in equipment and fiber but also in labor.” Like Frontier, Lumen recently said it plans to accelerate its fiber investments.
Likewise, a Windstream representative told Fierce it has “secured all of the supplies necessary to meet our current build plans."
Jennifer Spaude, SVP of investor relations and corporate communications at Consolidated, told Fierce it remains on track to achieve a target of upgrading 300,000 passings to fiber in 2021, adding “our partners are confident they can supply us with sufficient equipment to maintain our operational pace.” However, she acknowledged “inventory is limited on next-generation chips that deliver multi-gigabit speeds” and it is “evaluating alternative CPE” which can be used if necessary.
In April, Dell’Oro Group predicted supply chain issues could hamper fiber deployments, noting lead times for fiber cables, conduit and other optical distribution network infrastructure had already reached “anywhere from 12 to 18 months”.
Asked to weigh in on AT&T’s predicament, Dell’Oro VP and optical transport market analyst Jimmy Yu noted some players locked in supply agreements long ago. “Verizon (luckily) had a supply agreement in place a few years ago that assured supply with Corning. I don’t think AT&T did. Hence, AT&T doesn’t have a secured supply like Verizon,” he told Fierce.
Yu added neither Lumen nor Frontier “are investing in access (fixed and mobile) at the same pace as AT&T and Verizon. So, those two operators will not have the same demand level as AT&T.”