AT&T Just Supercharged Its Fiber Business
Telecom giant AT (NYSE: T) is best known today as a leading wireless provider in the United States, but it's also investing heavily in fiber internet. The company now has 7.5 million fiber customers, up 19.2% over the past year, and it's gaining an average of just under 300,000 new customers each quarter.
One thing to know about fiber is that it's very much an "If you build it, they will come" kind of business. To expand it, a provider must start by laying down fiber in neighborhoods and near businesses -- a capital-intensive endeavor -- and then hope that enough customers sign up for the service to make its investments worthwhile. Right now, AT's fiber network reaches 19.7 million homes and 3 million business locations, but only a fraction of those potential customers have signed up.
It can cost something like $27,000 per mile to lay fiber, according to the Department of Transportation. Depending on the density of homes and a wide variety of other factors, passing a single home with fiber can cost in the ballpark of $1,000. And that doesn't include installation of the fiber connection to the home itself, a service that's often offered for free or at a subsidized price to potential customers to induce them to sign up. at has the advantage of already having infrastructure in its existing markets, so it can likely lay additional fiber at a lower cost compared to starting fresh.
Source Fool.com
