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AT&T Expands Fiber-based Broadband


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AT&T, Inc. (T - Analyst Report) announced that it has installed fiber-based broadband in additional 450 office buildings bringing the total to 16,000 business customer locations. The company’s efforts to develop its broadband services remain highly accretive to profits in the wireline segment, which has registered continues lows due to loss of voice customers. We believe the efforts to introduce wirline data services will bode well for the company’s revenue growth.

AT&T remains focused on its Velocity IP initiative, which targets expansion of its business. The initiative focuses on the expansion of broadband services to 57 million users, covering 75% of the company’s wireline footprint by the end of 2015. In addition, the company is also seeking to expand its fiber network to 1 million additional customer locations by 2015. The plan also includes expansion of 4G LTE as well as U-verse services to 8.5 million new customer locations, and enhancing spectrum and network capabilities. This project underlines the company’s efforts to meet the growing demand for high-speed Internet. We believe that this investment program will provide AT&T with a high-potential growth platform for revenues and earnings.


We also believe that in the coming months, wireline growth will also be driven by strong business revenues and enhanced strategic services. Consistent subscriber growth in the U-verse segment is expected to continue in the coming days, leading to higher revenues. In terms of U-verse broadband speed, AT&T increased its speed up to 45 megabits per second, which is available to almost two-third of the U-verse customer base. The company is further trying to deploy speeds of up to 75 megabits per second and faster in the future. We believe the expansion of U-verse services will continue to boost data revenues and ARPU (average monthly revenue per user) in the wireline segment.

AT&T, which operates with carriers like Verizon Communications Inc. (VZ - Analyst Report) and Sprint Corp. (S - Analyst Report) and United States Cellular Corp. (USM - Analyst Report) has a Zacks Rank #3 (Hold).

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