One of the issues that the telecom and IT industries follow closely is the state of capital investment. The thinking a few months ago was that capex was experiencing heavy weather. More recently, a less turbulent period was forecast.
A big reason that investors began to feel better about the state of capital investment is that AT&T is spending a lot of money on its GigaPower project, which features fiber-to-the-premises (FTTP) installations that carry data at speeds as fast as 1 Gigabit per second (Gbps).
Alan Breznick at Light Reading reports that AT&T is set to bring it to 35 additional metropolitan areas. Previously, 19 metros were targeted. The goal is to serve 14 million customers by the end of 2019. That is 1.5 million more than the Federal Communications Commission (FCC) mandated as a condition of AT&T’s 2015 acquisition of DirecTV.
That’s a lot of fiber and assorted equipment. While that project alone likely is not enough to turn the tides, it is a significant step in that direction.
A far smaller investment – but nonetheless another positive sign — came to light during Windstream’s first quarter earnings call last month. FierceTelecom reports that it is extending its last-mile fiber project in Charlotte, N.C. and is planning similar networks in Tennessee and Virginia.
During the call, CEO Tony Thomas said that the on-net business during the first quarter of 2016 was more than the year-ago quarter. In other words, a higher percentage of customers were reached by Windstream fiber, as opposed to third-party carriers working on Windstream’s behalf, during the first quarter of this year than last.
While some telecom companies are increasing their investments, others are staying the course. Last week, GovTech posted an update on Google Fiber builds in Atlanta, Nashville, Charlotte and Raleigh. The projects were announced in January 2015. Service has launched in Nashville and Atlanta and construction is ramping up in the other two cities. The piece provides particularly good detail on the situation in Charlotte. The bottom line is that the company, which at one point wasn’t taken very seriously as a competitor, indeed is moving aggressively.
Finally, another long-term project involves Charter Communications. The cable operator, as a condition of FCC approval of its acquisitions of Bright House Networks and Time Warner Cable, agreed to overbuild telecommunications systems serving at least 1 million homes. That’s another nice bit of business for the vendors.
Telecommunications is a capital-intensive business. A lot of construction goes on even in bad times. It seems, however, that the tide has turned on the poor landscape of the past few years.
Carl Weinschenk covers telecom for IT Business Edge. He writes about wireless technology, disaster recovery/business continuity, cellular services, the Internet of Things, machine-to-machine communications and other emerging technologies and platforms. He also covers net neutrality and related regulatory issues. Weinschenk has written about the phone companies, cable operators and related companies for decades and is senior editor of Broadband Technology Report. He can be reached at [email protected] and via twitter at @DailyMusicBrk.