Broadband Communities

JAN-FEB 2019

BROADBAND COMMUNITIES is the leading source of information on digital and broadband technologies for buildings and communities. Our editorial aims to accelerate the deployment of Fiber-To-The-Home and Fiber-To-The-Premises.

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J A N U A R Y / F E B R U A R Y 2 0 1 9 | w w w. b r o a d b a n d c o m m u n i t i e s . c o m | B R O A D B A N D C O M M U N I T I E S | 3 1 the big driver of fiber-to-the-home growth because when you take it or Verizon out, there are just so many small ones that are not that impactful." As AT&T completes its FTTH build in 2019, Randall Stephenson, CEO and chairman of AT&T, told investors during the recent UBS 46th Annual Global Media & Communication Brokers Conference that capital spending will level off. "Capital intensity in the business should decline over the next few years," Stephenson said. "We [will have] built out 14 million homes with fiber [by mid-2019]. So, we really taper that off in the second half of the year." After AT&T wraps its program, Render said, fiber deployment may experience a slight slowing. "We do expect that growth will moderate a little bit in the next couple of years," Render said. "We think it will go down a little bit primarily because AT&T is a big player and is getting close to finishing the build they committed to the FCC." Render added, "AT&T will continue to build, and it's possible they could continue to build in a big way because the results have been good with this build so far." Other providers, such as CenturyLink, are also pivoting toward fiber. After acquiring Level 3, CenturyLink increased its on-net building reach by nearly 75 percent to approximately 100,000 buildings, giving it a broader set of capabilities to advance its consumer and business broadband reach. Neel Dev, chief financial officer of CenturyLink, told investors at the UBS Conference its fiber-based service expansion will focus on areas where it has a likelihood of strong customer adoption. "I think our approach is going to be very, very success based," Dev said. "So, we're doing a lot of work around which neighborhood it makes sense to build given the nature of our plan [and] the competitive landscape in that neighborhood." But large providers aren't alone in driving future FTTH growth. RVA said that 1,000 smaller providers were responsible for the 29 percent of the fiber build not accounted for by the four major Tier 1 providers. "e other 1,000, as we sometimes call them, are important in terms of the money they are investing in the United States and North America [for] fiber-to- the-home," Render said. TELCOS TO TRAIL CABLE'S BROADBAND LEAD e battle between cable operators and telcos for new subscribers will continue. Analysts agree cable operators will maintain a lead. If recent history is any indicator, during the third quarter of 2018, cable operators again outpaced telcos in net broadband additions. Leichtman Research Group (LRG) revealed in its third-quarter broadband report that cable operators added 730,000 subscribers, up from 540,000 in 2017. Comcast added 363,000 broadband subscribers in the third quarter – the most net adds in a third quarter since 2008. e top telcos collectively lost 150,000 subscribers, down slightly from a net loss of about 155,000 a year ago. AT&T and CenturyLink lost another 26,000 and 60,000 subscribers, respectively, and Verizon added only 2,000 new Fios subscribers. Bruce Leichtman, president and principal analyst of LRG, expects cable to exceed telcos in adding broadband subscribers. "We have seen telcos with nine quarters of net negatives. ey are Cable is still the most widely used broadband type in the United States, but FTTH is now second. RVA research found that 5.9 million homes were newly marketed for fiber services in 2018.

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