AT&T's Stephens: We'll meet our FTTH goals by extending fiber from existing builds

AT&T (NYSE: T) is not afraid of meeting its ambitious goal to bring its 1 Gbps FTTH service to an additional 11.7 million locations it agreed to meet as one of the tenets with the FCC to get approval of its DirecTV acquisition.

Speaking to investors at the Bank of America Merrill Lynch 2015 Media, Communications & Entertainment Conference, John Stephens, CFO of AT&T, said that the telco has already built out the foundation from its Project VIP initiative to take fiber to more homes and businesses.

As part of the Project VIP initiative, the service provider rolled out its fiber-to-the-node (FTTN)-based IP broadband service already to 57 million U.S. locations.

"We now have more knowledge about the cost efficiencies and the structure so we can extend locations where we have fiber-to-the-node to make them fiber-to-the-premises and accomplish these goals," Stephens said. "Now that the mindset of the cities and states and localities have changed it's much easier to work with them today."

Under its proposed Build Plan, AT&T said the FTTH build will be completed within four years after the DirecTV merger closes.

This 11.7 million FTTP buildout goal is more than the initial plan it revealed last June to upgrade 2 million homes to the fiber-based Gigapower broadband service, while expanding overall broadband coverage overall to 13 million locations.

At the same time, AT&T's ability to meet its FTTH ambitions won't require a large amount of additional capital because it will fall within the existing 15 percent of its service revenues.

"We have laid the foundation for this with all the Project VIP, so much of this capital has been built. So overlaying this is very, very manageable," Stephens said.

Stephens said he has seen the process of migrating the existing FTTN network to FTTH in his own Dallas neigborhood being well underway, for example.

"I would suggest to you in my own neighborhood back in Dallas, we had fiber-to-the-node for a couple of years so putting fiber through the alley that's behind my house and attaching the fiber from the telephone pole to my house was not a very expensive completion of a fiber to the prem project," Stephens said. "It was very efficient, and what we built with IP broadband via Project VIP made it very easy to do."

Outside of the initiative related to the DirecTV deal, AT&T continues to expand FTTH service into new markets. Among some of the new targets are Durham, N.C., Dallas-Ft. Worth and Chicago areas as well as the Florida market.

But this is not just a pure consumer play. The service provider also agreed to make its 1 Gbps service available to additional E-rate eligible schools and libraries in its wireline footprint.

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