U.S. telecom behemoth AT&T, Inc. T announced the completion of buildout of fiber to 1 million additional customer locations, proceeding with its fiber-to-the-building (FTTB) program.

Details

Notably, in 2012, the company had initiated the FTTB program, under its Project Velocity IP (VIP) initiative, which primarily targets business expansion.

The company’s multi-billion-dollar Project VIP is an investment plan to augment IP broadband networks and provide high-quality, fast and reliable wireless and wireline Internet connectivity to customers.

Under this plan, the company intends to extend 4G LTE as well as U-verse services to 8.5 million new customer locations, enhancing spectrum and network capabilities further.

Meanwhile, the latest expansion extended AT&T's U.S. fiber network by another 76,000 route miles, taking the tally to roughly 500,000 miles. Notably, AT&T now provides high-speed Internet products to business customers on its fiber network in every important metro across the company's 21-state footprint.

Benefits

The company’s efforts to enhance its broadband services prove highly accretive to profits in the wireline business, which has been witnessing loss of voice customers for quite some time now.

Moreover, this expansion has helped the company bring a mix of symmetrical and asymmetrical speeds to customers varying from 25 Mbps to 300 Mbps, with plans to reach 1 Gbps.

Notably, AT&T is moving full steam ahead with its objective to roll out ultra high-speed Internet service across the country. Only recently, the company announced plans to expand its super-fast fiber optic broadband service – GigaPower – to 38 additional cities, reaching the total tally to 56 locations.

Bottom Line

The fiber optic network is becoming the most sought-after technology for secure and fast data transmission. Going forward, the wireline industry will largely evolve around fiber-based superfast gigabit data transmission networks.

AT&T believes that the ongoing fiber rollout will allow the company to offer services like cloud, Ethernet and Virtual Private Networking to small and medium business (SMB) customers, which have been traditionally offered to only large business customers.

Thus, we believe that such lofty expansion plans have lent AT&T an upper hand in the fiber arena against players like Verizon Communications Inc. VZ, Comcast Corp. CMCSA and Alphabet Inc. GOOGL.

AT&T currently has a Zacks Rank #3 (Hold).

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