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AT&T (T) Expansion Plans on Track, 400G Prospects Bright
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AT&T Inc. (T - Free Report) has had a solid run so far in the U.S. Ethernet market, thanks to the company’s extensive Ethernet footprint expansion as well as higher demand for 40G and 100G services. Powered with high bandwidth, 40G and 100G services were initially popular in the financial, educational and healthcare industry and are now being adopted gradually by large corporations for their network infrastructure.
While AT&T is benefitting from the exceptional growth in 40G and 100G services, it is looking forward to the next gen Ethernet technology – 400G. The testing for the technology started in 2013 when the company claimed to transmit 400G signals over 100 Ghz spaced grid across a span of 12000 km.
Ethernet Expansion
Though the rollout of Ethernet services demand focus on speed, the company is also looking to widen the service’s reach through Fiber-to-the-Premises (FTTP) expansion. The company has already doubled its Ethernet footprint in 2015 and expects to forge ahead with its expansion plans through the laying out of more fiber and introduction of new services over the Ethernet. AT&T presently has 80 corporations of varying sizes that contribute to its Ethernet coverage while management expects to add more going forward.
The Bottom Line
The Ethernet market is now a major area of focus for the broader communication industry. As the segment gains further traction, and makes way for higher Internet speeds, increasing competition will induce price compression in the future. Although AT&T is a leading player in the domestic Ethernet market, other players like Comcast Corp. (CMCSA - Free Report) , CenturyLink Inc. and Level 3 Communications Inc. are not lagging far behind. Thus, it is a no brainer that AT&T is banking on 400G to fend off competition, going ahead. However, the technology in itself is in a very nascent stage, with no set standards as of now.
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AT&T (T) Expansion Plans on Track, 400G Prospects Bright
AT&T Inc. (T - Free Report) has had a solid run so far in the U.S. Ethernet market, thanks to the company’s extensive Ethernet footprint expansion as well as higher demand for 40G and 100G services. Powered with high bandwidth, 40G and 100G services were initially popular in the financial, educational and healthcare industry and are now being adopted gradually by large corporations for their network infrastructure.
While AT&T is benefitting from the exceptional growth in 40G and 100G services, it is looking forward to the next gen Ethernet technology – 400G. The testing for the technology started in 2013 when the company claimed to transmit 400G signals over 100 Ghz spaced grid across a span of 12000 km.
Ethernet Expansion
Though the rollout of Ethernet services demand focus on speed, the company is also looking to widen the service’s reach through Fiber-to-the-Premises (FTTP) expansion. The company has already doubled its Ethernet footprint in 2015 and expects to forge ahead with its expansion plans through the laying out of more fiber and introduction of new services over the Ethernet. AT&T presently has 80 corporations of varying sizes that contribute to its Ethernet coverage while management expects to add more going forward.
The Bottom Line
The Ethernet market is now a major area of focus for the broader communication industry. As the segment gains further traction, and makes way for higher Internet speeds, increasing competition will induce price compression in the future. Although AT&T is a leading player in the domestic Ethernet market, other players like Comcast Corp. (CMCSA - Free Report) , CenturyLink Inc. and Level 3 Communications Inc. are not lagging far behind. Thus, it is a no brainer that AT&T is banking on 400G to fend off competition, going ahead. However, the technology in itself is in a very nascent stage, with no set standards as of now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>