He who has more fiber wins. In other words, the service provider that has a fiber-rich network is more competitive in the business and wholesale services race.
In our new feature, From AT&T to Fatbeam: The top 10 (and more) biggest providers of fiber in the U.S., FierceTelecom looks at who has the most connected fiber.
Increasing the on-net fiber footprint has a number of advantages for wireline operators, particularly as they look to gain further share in the Ethernet market.
Respondents to a recent Vertical Systems Group (VSG) fiber connectivity survey said that fiber network expansion is a key priority.
Fiber availability in U.S. buildings has come a long way over the past decade. According to VSG, over 42 percent of U.S. buildings now have fiber in them. While there's still a long way to go until the U.S. can claim complete victory, it's quite an improvement over the less than 10 percent penetration that existed in 2004.
ILECs, CLECs and cable operators alike have been expanding their fiber network connections through a mix of organic network builds and, where necessary, acquiring other fiber players that add complementary assets to their folds.
Out of the ILEC group, AT&T (NYSE: T) is clearly the most aggressive when it comes to expanding its on-net fiber footprint. Through the fiber-to-the-business (FTTB) program as part of the broader Project VIP initiative, AT&T has passed over 800,000 buildings with fiber as of the end of the first quarter.
Tier 2 telcos like Consolidated Communications are being no less aggressive. By acquiring Enventis, Consolidated gained 4,200 route miles serving its facilities-based business and wholesale customers in Minnesota and into Iowa, North Dakota, South Dakota and Wisconsin. Over the past year, it has expanded its fiber miles by 5 percent to 13,038 and on-net buildings by 3 percent to more than 4,800.
Perhaps not surprisingly, Bob Udell, CEO of Consolidated, says that the company favors winning business service deals where it can provide on-net fiber building connectivity. The rationale is simple: Consolidated can conserve capital from not having to pay a competitor for special access circuits while controlling the customer experience.
"We're specifically focused in each market on identifying the best returns in that market and the sales teams are incented to pursue facilities-based opportunities in on-net buildings versus Type 2 or things we would have to rent," Udell said.
Fellow telco Windstream is leaning toward a similar approach. The telco plans to equip eight markets with on-net fiber in the next quarter.
But the telcos aren't the only ones being aggressive with their fiber rollouts. Competitive carriers are responding to the fiber thirst by making purchases and doing their own internal builds.
In just the past few weeks, two major deals were announced: Lightower said it will acquire Fibertech, while Crown Castle launched a bid for Sunesys. Other notable providers are Zayo and FiberLight, which both completed large builds in areas like Texas in response to a major wireless carrier's demand for backhaul.
Finally, there's the cable industry. While the Comcast/Time Warner Cable deal failed, cable remains a formidable competitor in the fiber race, offering a mix of Ethernet and IP-based services increasingly to larger businesses. As Charter proceeds with its plans acquire Bright House and potentially eyes others like Time Warner Cable, these new combinations could cause more disruption to the fiber and Ethernet services markets.
Each of the providers we chronicle in our report may differ in size and focus, but the desire to have a deep on-net fiber footprint is something they all set as table stakes to compete.
Check out our new feature, From AT&T to Fatbeam: The top 10 (and more) biggest providers of fiber in the U.S., and let us know what you think.--Sean