McElfresh: AT&T has a laser like focus on expanding fiber offerings

AT&T will continue to expand its fiber footprint and fiber-based services over the next several years. (Pixabay)

Speaking at an investor event on Tuesday, AT&T's Jeff McElfresh outlined how fiber underpins the telco's wireless, broadband and streaming video services.

AT&T has more than 1.3 million fiber route miles globally with plans to add more fiber going forward. For the fourth-straight year, AT&T topped Vertical System Group's U.S. Fiber-Lit Buildings Leaderboard, which was released in early April

During Tuesday's Bank of America Merrill Lynch TMT Conference, McElfresh, who is CEO of AT&T Communications, said that it takes a lot of fiber and physical site locations with high densification in order to realize the full potential of the wireless spectrum the company owns.

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"I can assure you that we will continue to invest in our wireless network," McElfresh said, according to a Thomson Reuters transcript. "We will continue to invest in feeding that network with lots of fiber, and we will invest for market momentum market by market in this wireless business.

"I can tell you, densification of our wireless network and an increased footprint expansion of our fiber offerings is in the making for AT&T over the next several years."

In its most recent first quarter, AT&T added 209,000 broadband subscribers in its fiber-based footprint. Currently, AT&T has more than 14 million homes passed with its fiber network, so there's plenty of headroom for growth.

Late last year, AT&T offered a 1-Gig broadband resediential service paired with AT&T TV on its fiber network for $39.99 per month. McElfresh said AT&T has seen a "nice volume" with that bundled offering.

"That (fiber) has proven to be very competitive against the cable players in that space we compete with and, as well, brings with it a myriad of other products and services, such as our pay TV, our over-the-top SVOD offering as well as our wireless services," McElfresh said. "So connectivity has proven to be really core and central to the cash flow performance of the company."

McElfresh credited Randall Stephenson, who will step down as CEO next month, for AT&T's decision to invest in fiber and wireless spectrum. AT&T's John Stankey will take the CEO reins once Stephenson steps down.

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"If you go back in time prior to the DirecTV acquisition, our scale of fiber-based services were limited," McElfresh said. "Our pay TV subscriber base was limited. And as we've made our way through our transactions, we've generated substantial cash flow that's enabled us to invest aggressively into connectivity products like our fiber networks."

McElfresh said AT&T now has multiple fiber networks that serve and connect its wireless services, enterprise customers and residential broadband subscribers.

"As we drive deeper fiber penetration in our wireless expansion and as we string out more C-RAN or small cells to densify our signal throughout our key markets, we passed a ton of small businesses," he said. "We passed a ton of houses. And what might have been thought about in the past as a consumer-based residential broadband offering and a business case and investment plan, now today is viewed as one integrated network.

"One set of fiber strands that serve enterprise—dedicated and shared—residential shared, backhaul, front haul for our cellular network and even up to wholesale offerings. And it's with this integrated planning approach that we have put in place since last October that gives us a really good efficient spend on an ability to expand further our fiber footprint."

McElfresh said the densification of AT&T's wireless network and an increased footprint expansion of its fiber offering will continue to take place over the next few years as AT&T looks to deliver $6 billion in cost savings by 2023.

"We are laser-like focused on finding the most efficient path to expanding the footprint of our fiber offerings," McElfresh said. "It's a great business. It's got great margins. It's got great returns. There's nothing not to like about it, and we're going to lean into it."

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